Category: Economics

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Economics Environment

[489] Of a day before Kyoto Day

It took almost a decade to ratify the pact that tries something to mitigate the biggest environmental issue of our time. Now, time is at hand. The real fight begins in less than a day.

While the treaty will come into force tomorrow, the facilities for emission trading have been set up. One of them is the Chicago Climate Exchange, the CCX. It is the world’s first greenhouse gases exchange. The existence of this exchange will allow companies to buy and sell quotas set forth by the Kyoto Protocol. The market looks thin to me for the moment but I’m sure as time goes by, it will thicken. In Europe, agreements between firms and countries on quota transfer have already been signed upon. I’m unable to provide a link or two on this as the news came out some weeks ago. Wikipedia, the Oracle of the Internet, however does provide some example.

While the implementation of the Protocol takes place, some already fail to prepare themselves for oncoming treaty. The European Union, possibly the green’s current best of friends, has sued a few of its members for such failure.

The target of the Protocol is anything but easy and that is why some have failed to comply despite ratification. The pact asserts that by the year 2012, the worldwide level of six greenhouse gases needs to be comparable to 1990 level. I simply believe it is almost impossible to reach that goal. The time frame is simply too short for such grand achievement – economy will grow somehow and so will the emission of the gases.

Yet, this constraint imposed by Kyoto may overcome that skepticism. It has been said that the mother of all inventions is necessity (I say laziness is the father of invention). With the expensive protocol in place, there will come a time to find a cheaper way to implement Kyoto. My take on the solution is technology; in particular, energy efficiency. A breakthrough such as the mass production of fuel cell is highly needed for the 1990 target to be possible.

And of course, future participation by China and India is important. The US and Australia on the other hand are possibly lost in their own reality. Concerning the US, a few states, notably of New England and the Pacific, have taken their own initiative to reduce carbon emission despite the diverging stance by the federal government.

Whatever it is, an ode to Kyoto and the Earth Summit at Rio de Janeiro, the place where it all begun. Kyoto might be imperfect but it is bringing us into the right direction, however short that step really is.

Categories
Economics

[488] Of Malaysia rules the world

This Gamespot article says it all. We are even outperforming China! w00t!

Special thanks to Bigstig for the lead. LOL!

Categories
Economics

[487] Of selling the gold bullions

Reuters reports that US Treasury Secretary John Show has proposed to sell the US gold reserve so that the country may finance the debt relief it has given to poor blocks. According to the same article, the US is the world’s largest stock of gold bullions. I’d imagine the plan sounds extremely reasonable to the poor debtors since it may encourage future debt relief. There is however opposition coming from the US states that produce gold.

The reason for such opposition is simple. Any move to sell the gold reserve by the US will bring the price of gold down as quantity increases. Producers of gold obvious don’t like the idea of seeing the price of the commodity going down.

I’m in the position of supporting the sale. While the sale of bullions will negatively affect the producers of gold, I see benefit outweighing the cost. Few benefits that I can think of are, one, of course, lower liability for the poor nations; two, providing the US with liquid asset that may be used for higher return investment – the bullions probably merely sits in the bank doing nothing; three, environment.

The sale of the bullions will force the producers of gold to cut down its production if they want to preserve the price of the gold. With lower production, polluting material used in the mining of gold such as mercury and cyanide will be reduced.

Let’s see who will win this one. I bet the proposal will be shot down almost effortlessly.

p/s – the Fed wants to rework the way the Federal Open Market Committee announces any of its intention. The powerful independent central bank wants to drop the usage of the magic word “accommodating” and, the better known “measured”. The article suggests that the interest rate might increase at a greater rate in the near future.

Already, upon that announcement, the price of T-bills is heading down – reason for such fall is that any hike in interest rate makes other investments offer better return than bond. With lower return relatively to other investment option, demand for current bond fall and, with falling demand, comes falling price.

And that happens because the Fed wants to drop the word “accommodating” and “measured” while the real hike hasn’t been done or even announced yet.

Feel the power of Alan “Invisible Hand” Greenspan’s Fed.

The federal fund rate right now and past rates, thanks to Wikipedia:

GNU Free Documentation License, Wikipedia

The rise has been steep for the past few years and if the hunch is true, the rise will be steeper soon. But nobody will do a Volcker, that’s for sure. Inflation is still in check despite the arising fear a year ago.

Categories
Activism Economics Environment Photography Politics & government

[486] Of kicking Coke off campus

Earlier today, a rally to kick Coke off campus was held at the Diag. The effort has been going on for a few weeks now and it is being organized by a coalition of student groups. The core members of the coalition are Amnesty International, Environmental Justice and SOLE. There are other supporters like the Student Greens and the Indian Student Association but I can’t remember all of them.

Fair use

The members of the campaign are trying to make the University administration to force Coke to act more responsibly on matters concerning the environment and human rights. In Colombia, a number of labor union leaders that were troublesome to the bottling plants administration have been killed by paramilitary and Coke is alleged to have a connection with the murders. Union members have also been forced to quit their union if they want to keep their jobs – the right to free association being taken away forceful.Pertaining to the environment, in India, Coke is draining an aquifer and in effect depriving the poor local residents of precious water supply. Concurrently in India, there is a major movement to force Coke (and Pepsi too) entirely out of India. Here is a old article from BBC concerning Colas and India.

At the moment, the coalition is trying to get the Michigan Student Assembly to pass a resolution to condemn Coke. The first reading was read yesterday during the MSA weekly meeting and the motion will be up for voting next week. As I understand, heavy lobbying is happening within MSA. Despite the lobbying, I don’t see how the motion won’t go through since most of the board members seem to be from the left side of the political spectrum. With possible support from MSA, it is hoped that the University administration will be pressured to at least renegotiate its contract with Coke. A copy of the resolution can be found here.

While this is going on here in Michigan, other campuses are running the same campaign too. This is actually part of a nationwide protest against Coke. Some of them have managed to convince their schools to quit Coke.

Finally, next week, a few speakers, one of them is from Colombia, will be speaking on how bad the situation is in Colombia.

And now, some photos.

Environmental Justice people made that bottle-link and I helped them with it. It’s 125 feet long and we spent almost two hours trying to get it done. We didn’t buy any of them of course. Buying them to make the link rather defeats the purpose of boycotting Coke.

And this is somebody with the campaign poster. I don’t know him but he is probably from Amnesty.

And this probably somebody from the Michigan Daily, taking a shot at the bottle-link. We at EJ are hoping it gets into the front page tomorrow.

The aftermath. It’s going to be recycled of course.

And an explanation why the bottle-link is 125 feet.

More info on the issue is at Killer Coke.p/s – I’ve learnt that the Daily editorial endorses our effort. w00t! The piece could be read at the Michigan Daily. There is also some hope that the New York Times catches this…

pp/s – today in World of Warcraft, I helped a few others, about 10 players, defending Astranaar, a town in the game, from Orcs’ raids. It feels great to kick orcs’ ass.

Categories
Economics Environment Politics & government

[482] Of State of the Union 2005

Are you folks ready for our annual laugh?

I hope Bush has finally learnt his past mistakes, or else. Five more minutes and oh, I can’t wait to listen to him.

p/s – alright. I take that back. It was good, at least to me and especially how he brought the social security issue to the table. I understand how the social system is flawed but I’m not sure privatization is the right solution. Regardless of that, I prefer one, instead of letting somebody else or the government to finance one’s own future. The current system put the unnecessary burden on the wrong generation.

The environment though, received scant attention. Bush wants to encourage hydrogen fuel – something that he said in his last address. I’m not sure if he is actually trying anything at all though.

He also mentioned about cutting down spending while making tax cut permanent. Heh! Reagan wanted that too. I don’t think cutting down both taxes and spending simultaneously is easy, if impossible is not the right choice of word. It is easier said than done, still.

pp/s – Low Culture is having some fun on Bush. More should be coming, considering how the authors love Bush. I’ve been reading the blog for a couple weeks now and I like it. It’s now under blogroll.