global-warming

Does American Weight Gain Negate Improved Fuel Economy?

by James Gerken on January 1, 2012

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From Jim Motavalli and Mother Nature Network: ” Welcome to Wendy’s , how may I help you?” If you replied, “Make mine the Triple Baconator Combo Meal with small fries and a small Coke,” you’ve just agreed to pack on 1,850 calories, 106 grams of fat (43 of them saturated) and 2,780 milligrams of sodium. And we wonder why Americans are so fat. That calorie count was from a new book, ” 10 Worst Fast Food Meals in America ,” and you’d do no better with the Large Triple Whopper with Cheese Value Meal (with fries!) from Burger King (1,790 calories). It’s no wonder that, according to the Centers for Disease Control and Prevention , the average American male between 20 and 74 has a 39-inch waist and weighs 194.7 pounds (up 28.4 since 1960). The news isn’t much better for women: They weigh in at 164.7 now (with a 37-inch waist). As Automotive News (subscription required) recently noted , there’s a car angle to this. Automakers are bending over backwards to reduce the weight of their cars, using lightweight steel and carbon fiber whenever possible. It’s the quickest way to improve fuel economy. Ford cut 30 pounds from the automatic transmission in the Focus. The Chevy Cruze and the Hyundai Elantra have even done away with the spare tire. “But while engineers are removing one spare tire, their customers and passengers have each been adding one of their own,” writes columnist Larry Vellequette. It’s simple math: If the car loses 30 pounds, but the driver gains the same amount, we’re left with a wash in terms of fuel economy. With two big and talls in the car, you’re losing ground. The auto industry’s focus on losing weight is a welcome change . According to Christopher Knittel of the Institute of Transportation Studies at the University of California, Davis, “From 1980 to 2004, the average fuel economy of the U.S. new passenger automobile increased by less than 6.5 percent. During this time, the average horsepower of new passenger cars increased by 80 percent, while the average curb weight increased by 12 percent.” That’s awful. And, he adds, “[I]f weight, horsepower and torque were held at their 1980 levels, fuel economy for both passenger cars and light trucks could have increased by nearly 50 percent from 1980 to 2006; this is in stark contrast to the 15 percent by which fuel economy actually increased.” OK, so now we have the cars losing weight and people gaining. Well, they were gaining back then, too, but all that extra poundage is cumulative. Now, here’s where the cars and calories thing comes together. As the Los Angeles Times reports , “A new study finds that living in an area populated by fast-food restaurants and not having a car may make your weight climb.” This is sociology writ large: poverty equals pounds. Talk about a vicious circle. In this case, fast-food proximity erases the undeniable benefit of walking. The heavyweights making the springs sag down will actually melt some of the fat away through the very act of owning a car. The report, based on data from 2,156 adults in the Los Angeles Family and Neighborhood Study database and first reported in the Journal of Urban Health, reveals that car owners on average weighed 8.5 pounds more than pedestrians. But when those same non-car-owners lived in “lower middle socioeconomic status areas,” i.e., poor, neighborhoods, they weighed 12 pounds more than people living there with cars. Why is that? Because without a car you can’t drive to the affordable grocery stores that are usually located elsewhere, but you can walk to conveniently located Denny’s, Burger King and McDonalds. This is kind of obvious, but the study’s authors write, “Car ownership may reduce the local effect of fast-food outlets in the neighborhood, while lack of car access tends to exacerbate it.” The solution to all of this is either healthy fast food (fat chance of that!) or cheap green cars, so the urban poor can buy rides to take them food shopping. That would also help extend hybrid and electric vehicle ownership beyond the affluent early adopters to a broad — and I do mean broad — cross-section of all Americans. Here’s Natalie to give you the skinny on some popular fast-food choices. She’s a bit preachy, but she gets the job done:

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Does American Weight Gain Negate Improved Fuel Economy?

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Peter Gardett: Energy Politics Supercycle Falters

by on December 15, 2011

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Markets run in cycles; we are all at the mercy of ups and downs in the macro and micro. Commodities markets, including those for energy, are often held to the dictates of “supercycles.” Infrastructure for commodities is so expensive, development timelines are so lengthy and the underlying shifts in demand and supply occur over such long phases that energy prices and resulting investments rise and fall over decades, not months. The modern energy economy was born in one great supercycle around the middle of the 20th century, and we are still its heirs. In the wake of a privately sponsored boom in energy technology development and deployment in the 1920s, the U.S. government responded to the inequities of the Great Depression of the 1930s by investing in huge electrification projects, choosing technologies, firms and energy types by fiat as it went. World War II brought the federal government even further into the heart of the energy sector, a role it found nearly impossible to relinquish as the hot war ended and the Cold one began, making nuclear power development and energy security matters of national security. The U.S. federal government helped build today’s cheap energy overdraft, but the model by which regulators chose projects, technologies and fuels for favorable treatment to guarantee broadening access to power and transport is also reflected in today’s energy standoff, and contributes to a looming crisis in the sector . It is arguable that the upswing of the regulation-led supercycle began to end with the oil embargo of the 1970s. Nixon, Ford and Carter experimented with compelling both supply-side development and limiting growth in demand; their efforts met with mixed success at best. Reagan, Bush and Clinton tried selective deregulation to encourage investment, first in natural gas and oil, and then in electricity infrastructure. Americans under these administrations continued to enjoy the benefit of the huge availability of energy built up in preceding decades, and administrations tinkered around the edges, often extracting regulatory prices like tightened environmental standards in the same sectors where they walked back market and trading regulations. The inability to reconsider the energy market as a whole has hindered energy policy throughout its history in the U.S., but as the need for investment and modernization grows, pressing against the looming background of aging infrastructure, the chorus of industry complaint has grown into something like an emerging consensus. In recent weeks, AOL Energy reporters have again and again heard the phrase “the federal government should not pick winners and losers.” We have often heard it from the same executives and firms who have often benefited from a federal policy of picking favorites, and many of whose very business models have become dependent on wrinkles in regulatory decisions rather than addressing supply and demand issues with greater innovation. Arguments persist over the details, over the extent to which research and the early stages of commercialization should receive support financial or otherwise, but the range of players pressing for what they see as an equal playing field is impressive. For decades, the cost of regulatory selection was the price of hugely expanded access, and technological innovation built on the underlying pace of change. That model no longer works, and businesses operate in a world of constant fear that changes in Washington, D.C. may leave their investments unable to access markets, whether they are wind power projects unable to link to transmission or oil refinery owners who still do not know when they might be able to process Canadian crude brought through the proposed Keystone XL pipeline. Everyone, regardless of political conviction, benefits from intelligently and economically designed energy infrastructure. With business decisions increasingly being made in Washington hearing rooms rather than corporate board rooms, companies are regretting the deals they’ve made that fail to reflect economic realities and regulators are adrift, defined by process and an understandable predilection for established ways of doing things. Consensus is elusive and easily challenged, but heading into the 2012 presidential campaign with a clear-eyed vision for what the energy policy future should look like is the industry’s duty. Without gathering around principles that can guide future decisions based on market realities as well as the inevitable role played by political perception, energy companies will have no one to blame but themselves if the status-quo regulatory system keeps them hidebound in the operating structures of the past. This AOL Energy Comment reflects the observations of the editorial staff and the author, in this case Managing Editor Peter Gardett. All views and comments are entirely the author’s own. Join the AOL Energy discussion on these and other topics on our Discussions Tab .

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Peter Gardett: Energy Politics Supercycle Falters

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Company Announces Major Decision In Controversial Pipeline Saga

November 14, 2011

LINCOLN, Neb. — TransCanada will move the route of its planned oil pipeline out of the environmentally sensitive Sandhills area of Nebraska, two company officials announced Monday night. Speaking at a news conference at the Nebraska Capitol, the officials said TransCanada would agree to the new route, a move the company previously said wasn’t possible, as part of an effort to push through the proposed $7 billion project. They expressed confidence the project would ultimately be approved. Alex Pourbaix, TransCanada’s president for energy and oil pipelines, said rerouting the line would likely require 30 to 40 additional miles. “We’re confident that collaborating with the state of Nebraska will make this process much easier,” Pourbaix said. The announcement follows the federal government’s decision last week to delay a decision on a federal permit for the project until it studies new potential routes that avoid the Sandhills area and the Ogallala aquifer. The proposed pipeline would carry crude oil from Canada to Texas Gulf Coast refineries. Debate over the pipeline has drawn national attention focused largely on Nebraska, because the pipeline would cross the Sandhills – an expanse of grass-strewn, loose-soil hills – and part of the Ogallala aquifer, which supplies water to Nebraska and parts of seven other states. Nebraska Gov. Dave Heineman called a special legislative session to seek a legal and constitutional solution to the pipeline debate. But the session’s stated goal – to enact oil pipeline legislation – has lacked a clear consensus about what, if anything, state officials ought to do. Environmentalists and some Nebraska landowners fear the pipeline would disrupt the region’s loose soil for decades, harm wildlife, and contaminate the aquifer. Business and labor groups who support the project say the criticism is overblown, and based more on opposition to oil than the project itself. They say the project will create construction jobs, although the exact number is disputed.

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China manufacturing eases for 3rd month, prices up

September 30, 2011

By Kevin Yao BEIJING (Reuters) – China’s manufacturing sector contracted for a third consecutive month in September, suggesting that the world’s second-largest economy is not immune to global headwinds, while factory inflation quickened. Growing signs of a slowdown in China have prompted concerns that the country that has been the motor of global growth in recent years will not be able to provide as much of a counterweight to faltering U.S. and European growth. The HSBC purchasing managers’ index (PMI), which previews business conditions in a range of industries before official output data, was at 49.9 in September, unchanged from August. The final PMI, released on Friday, was stronger than the flash reading published last week. “The PMI reinforces our view that the potential slowdown in China’s economy will likely be a gradual,” said Connie Tse, an economist at Forecast in Singapore. “The trade sector no doubt faces increasing risks, but recent export growth momentum is holding up decently. China is not facing a collapse in global demand yet, as witnessed in 2009.” The latest reading represents the longest period of contraction since the global financial crisis, when it came in below 50 for eight successive months from August 2008. In PMI releases around the world, the 50-point level typically demarcates expansion from contraction in factory activity. HSBC believes a PMI reading of as low as 48 in China still points to annual growth of 12-13 percent in industrial output and a 9 percent expansion in gross domestic product. “Although the lagged effects of credit tightening will continue to cool industrial activity in the months ahead, there remains little need to worry about a growth meltdown,” said Qu Hongbin, China economist at HSBC. Qu expects China’s economic growth to hold up at around 8.5-9 percent in the coming years, despite the global slowdown. But analysts at Bank of America-Merrill Lynch said in a report that China faces some systemic risks such as a property-market meltdown, bad debt and capital outflows. The warning triggered some widening China’s sovereign credit default swaps. The China Enterprise index of top mainland firms listed in Hong Kong fell 4 percent on Friday, with banks and developers sold off on fears of a property market correction. There are also concerns in some quarters that, after an investment splurge, China does not have the fiscal flexibility it possessed in 2008 and is less able to shrug off weakness elsewhere — a factor cited by consultancy Capital Economics when it last week cut its 2012 growth forecast to 8.5 percent from 9 percent. FADING DEMAND Earlier this month the IMF warned that, without action, the debt-mired economies of Europe and the United States could lapse into recession, prompting it to cut its 2011 and 2012 global growth forecast to 4 percent. Underscoring the global slowdown, a Japanese PMI survey on Friday showed September marking the first contraction in manufacturing activity in five months, as a bounce following a March earthquake in Asia’s second biggest economy faded. China, which has become a factory to the world, is especially vulnerable to fading demand from the United States and Europe, still its two biggest export markets despite its effort to diversify. Recent weakness in China’s currency against the dollar, where the offshore yuan is trading at a rare steep discount against the onshore rate, is evidence of overseas investors’ concerns about the outlook, analysts say. The HSBC survey’s new export orders sub-index remained below 50 for a fifth straight month, while the sub-index for overall new orders hovered below 50 for a second successive month. China’s exports in August pulled back from a record high and the pace of expansion slowed from the 37.7 percent rate recorded in January, government data showed. China’s annual growth tumbled to 6.6 percent in the first quarter of 2009 as exports took a hit from a slump in global trade. This time the slowdown so far has been modest and gradual, due to resilient domestic demand. Analysts believe China’s annual economic growth in the third quarter will be above 9 percent, slowing moderately from 9.5 percent in the second quarter. China’s official PMI, which is due to be published on Saturday, may have edged up in September, after a rise in the previous month from a 28-month low in July, driven by seasonal factors and domestic demand. The official PMI, which is weighted more toward big state firms, generally paints a rosier picture of Chinese factories than that of HSBC, which includes small private firms that have been hit harder by credit curbs and weaker demand. INFLATION BATTLE To the discomfort of Chinese policymakers, Friday’s data showed input costs rising rapidly, which could imply upward pressure on consumer inflation. Factory inflation in China quickened markedly in September, with the sub-index for input prices climbing to a four-month high of 59.5 in September from 55.9 in August. China’s annual inflation pulled back to 6.2 percent in August from a three-year high of 6.5 percent in July, and is widely expected to cool steadily for the rest of 2011. “The upstream price rises could trickle down to consumer prices at some point, but the impact won’t be big as global commodity prices have been falling,” said He Yifeng, economist at Hongyuan Securities in Beijing. Chinese leaders have repeatedly emphasized that fighting inflation remains the top priority despite the global malaise. The central bank is holding off further policy tightening amid jitters about a global downturn. But at the same time, it is unlikely to ease policy soon for fear of reigniting price pressures and an investment frenzy by local governments. Since last October, the central bank has raised interest rates five times and banks’ reserve requirement ratios — the percentage of cash deposits they must set aside in their vaults — nine times. (Editing by Alex Richardson and Ken Wills)

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Ex-Googler Flees Groupon–Back To Google

September 24, 2011

‪ ‬ By Kara Swisher In a blog it just posted, Groupon said its recently hired COO, Margo Georgiadis, “has decided to return to Google (her former employer) in a new role as President, Americas.” She was only hired in April , just months before the company filed to go public. Georgiadis was previously VP of Global Sales at Google. (Interesting way to get a better title at the search giant, Margo!) Georgiadis was in charge of the company’s global sales, marketing and operations at the Chicago-based social buying service. Sources said that the hiring did not gel on either side. It might not be Georgiadis’ fault. She replaced Rob Solomon , who was in his job for one year. And here’s another: PR hire Brad Williams , a longtime Silicon Valley communications exec, who was there and then gone in what felt like 23 minutes. It seems Groupon does not like Silicon Valley types or, perhaps, vice versa. Since its IPO filing, in fact, it feels as if it has been a non-stop circus disaster at Groupon. That has included immense controversy about its sketchy accounting, huge slugs of venture funding going to its founders and a lot of worries about its growth. Today, in a Friday late afternoon dumping of bad news in hopes that no one notices (I do), Groupon also amended its S-1 public offering filing once again to change revenue metrics and also add a controversial internal letter that CEO and co-founder Andrew Mason sent to employees to counter its many and growing critics. There appear to be many more shoes dropping soon, said sources, so stay tuned. Until then, here’s the whole and very terse — for Mason — post : Update on the Groupon Team As a fast-growing company, we’ve done a lot of hiring this year, including on our senior executive team. Since the beginning of this year, we’ve made a total of 8 additions — that’s 57% of the total executive team. It would have been great if I could say that we batted 1,000%, but that’s rarely the case; after five months at Groupon, Margo Georgiadis, our COO, has decided to return to Google (her former employer) in a new role as President, Americas. We’ve built a fantastic team that has proven itself highly capable, so this change won’t have an impact on operations. In fact, we are using it as an opportunity to reorganize in a way that reflects our evolving strategic priorities. Sales, Channels, International, and Marketing will now report directly to me. Here’s a note from Margo: “Groupon is a great company and I feel privileged to have worked there even for a short time. It was a hard decision to leave as the company is on a terrific path. I have complete confidence in the team’s ability to realize its mission.” We wish her well. Via Uh-Oh: Groupon Loses New COO, Who’s Going Back to Google on AllThingsD . More from AllThingsD: More: Groupon Amends Its S-1 IPO Filing — Again! — Over Accounting Issues and CEO Letter Yahoo’s Dueling Internal Memos: Board, Followed by CEO, Spam Employees in Race to Explain From Cradle to, Well, You Know: The Creepy Factor of Facebook’s Timeline

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Buck Goldstein: Low Risk and High Return — Investing in our Best

June 27, 2011

Last spring I taught a seminar on innovation to 24 first-year honors students who could objectively be described as among the brightest teenagers in the world. Halfway through the semester I caught myself flashing back to my former life as a CEO and as a venture capitalist. I spent my entire career attempting to attract and invest in great talent, and I never successfully assembled a group as gifted as the students in that seminar. When I was fortunate enough to find even a few such individuals in my previous life, my response was always the same: invest in them. In the context of my company, that meant providing them training, mentoring and diverse experiences. As a venture capitalist, it meant deploying millions of dollars and expending an unlimited amount of time and energy to help an entrepreneur and his or her team succeed. Investing in the members of my first-year seminar would result in a healthy return, no matter what the metrics. The more interesting question is what form should that investment take and from where should it come? The answer lies neither in the halls of Congress nor in a think tank in Washington, D.C. or New York, but back in the seminar room with my students. Have a look at them and read a short biography for each by clicking this link . The first thing that strikes me about the students is their diversity. Even though they go to a state-supported, public university, over half of the students, or their parents, were born in a foreign country. They don’t mention it in their short biographies, but many of these students are recipients of merit scholarships and were the subject of intense recruiting battles. Although they are interested in innovation and entrepreneurship — the focus of the seminar — only a few plan to major in business. Instead most will study in the liberal arts. These students hope to make a difference in the world, and most are drawn to challenges such as global warming, gender inequality and extreme poverty. In my old life in the private sector, we would create a multi-year development plan for each of these students with an eye toward returns far in excess of our investment. If the university, or even the country, were to do the same, what would a plan look like? Based on the students’ biographies and my experiences with them, I’ll suggest four such plans. Cliff plans to go to medical school and is also interested in innovation. In college, a liberal arts education will help him explore alternatives and teach him to think critically and solve problems. He also needs some experience with applied scientific research — the kind that seeks to bridge the gap between the academic lab and the commercial marketplace. Spending one summer working in academic science and another working for a biotechnology company seeking to bring cutting-edge research to market would prepare him to make the most of his medical education. The synergy of those two experiences would encourage him to leverage his interest in innovation into a high-impact career focused on solving big problems and fostering new enterprises that create jobs. Courtney is a scientist and an innovator. In high school she was on the robotics team, but since arriving at UNC she has become interested in environmental issues. She also has a strong aptitude for math, which is a virtual prerequisite for serious science. To achieve her potential, she will need a global perspective which could be achieved by spending time in a lab abroad, as well as some time on the ground in the developing world. Such a combination would hone her quantitative skills, expand her horizons and fan her passion, preparing her to make a real difference in the world. Chenxi , known as”Chex,” left her landlocked town in China at age 11 to further her education. At 15 she journeyed to Singapore for high school, and after a year of university studies is deeply committed to social science research on global health issues. This summer she is doing research in India and China through grants she secured almost entirely on her own. Chex is remarkably industrious and self-sufficient having lived on her own from an early age. She will corral the resources to do big things. But what happens to Chex when she graduates? Perhaps she can extend her stay through graduate study, but gaining permanent residency is no easy task, even for someone with Chex’s tenacity. After recruiting and training this remarkable talent, we bear the risk of losing her to a competitor (China) just when she can make the greatest contribution. The plan for Chex centers on only one issue: keeping her in the United States. Arjun wants to start a business. This is no surprise because he has been an entrepreneur most of his life, undertaking everything from start-ups to day trading. In college it will be important for him to combine his academic work with real-world experience, meet and work with some entrepreneurs and have the chance to actually start something, even if it fails. Keeping the price of failure low and allowing Arjun to learn the lessons that only failure can teach is an important part of the process of preparing him to enter the fray once he graduates. What will be important for Arjun, when the time comes, is tapping financial and intellectual capital to start his enterprise. Policy incentives for new enterprise creation such as lower or no capital gains tax for investors in such enterprises and technical support for start-ups characterize the kind of climate that supports Arjun’s aspirations. Similar plans can be devised for the other seminar students as well. In some cases all that would be required is two to four sessions a year with a trained coach to help chart their path. For others, small research grants or summer stipends would also be necessary to allow for internships or practical research experience. If the grants further a commercial enterprise, they could be structured as loans. On average, this additional support would average no more than $10,000 over the student’s four-year career. Assuming 400 students per year would qualify, it would take around $1.25 million annually to fund such a program on one campus (including the overhead to support it). Scaling the idea to 100 campuses (or the equivalent) would require a national commitment of $125 million a year in investment. The return on that investment in terms of job creation, research accomplished, patents granted and companies created would result in the kind of returns that make a venture capitalist happy. Other steps must also be taken to ensure an outsized return on investment in students like mine. For those who are not U.S. citizens, we must find a way to keep them here once they earn their degrees. This involves immigration reform as well as creating a business and intellectual climate that welcomes their talents. University research must offer the opportunity to work on what students perceive as big problems where their efforts will truly make a difference. In the world we live in, they can go elsewhere if they think the impact will be greater. Thoughtfully improving the environment for start-ups of all kinds in both the commercial and social sector is also critical. One of this country’s strongest competencies is innovation and the best and brightest from all over the world want to be part of what they perceive as “start-up nation.” I don’t know of an opportunity around that is better than investing in my 24 students. The good news is there are hundreds more like them in colleges and universities throughout the United States. If we treat them like our most successful corporations would and create a development plan for each of them, the result is an investor’s dream — low risk and high return. Buck Goldstein is the University Entrepreneur in Residence at the University of North Carolina at Chapel Hill and the co-author, along with Chancellor Holden Thorp, of Engines of Innovation–The Entrepreneurial University in the Twenty-First Century .

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Global Warming Causing Food Prices To Rise

May 5, 2011

Over the last few decades, global warming has hindered the world’s food production causing prices to rise, new research reveals. The study, which NewScientist says is the first “to demonstrate a link between global crop yields and climate change,” not only tracks the link between rising temperatures and its effect on food production, but highlights the importance of finding new ways to adapt farming methods to the changing climate. From The Guardian : The drop in the productivity of crop plants around the world was not caused by changes in rainfall but was because higher temperatures can cause dehydration, prevent pollination and lead to slowed photosynthesis. According to David Lobell, a Stanford University scientist and an author of the report, “This is tens of billions of dollars a year in lost productivity because of warming,” The Washington Post reports. To conduct the study, Lobell and his colleagues gathered data dating from 1980 to 2008 for growing regions around the world, including their temperature, rain fall, and crop production. Then, they compared annual yields of four staple crops — corn, wheat, rice and soy beans — from every country in the world to what production would have been given precipitation and temperature remained the same since 1980, calculating the predictions with statistical models. Corn yields were 5.5 percent lower than the predictions showed they would have been if the environmental factors remained constant, and wheat yields were 3.8 percent lower. Wheat production in Russia showed the biggest drop, with yields 15 percent lower than what they could’ve been. Soy beans and rice were relatively unaffected due to being grown in areas not experiencing as much warming and thriving in higher temperatures, respectively. “Agriculture as it exists today evolved over 11,000 years of reasonably stable climate, but that climate system is no more,” Lester Brown, president of the Earth Policy Institute, told The Guardian . Not everyone agrees with the findings. Ken Cassman, a professor of systems agronomy at the University of Nebraska, told The Washington Post , “It’s not clear how well these analyses are capturing how well farmers can respond, and have been responding, to changing temperatures.” Kevin Trenberth of the National Center for Atmospheric Research in Colorado told NewScientist that the results were undermined by using a purely statistical model. Food prices have reached a record high this year , fueling unrest in regions like North Africa and the Middle East. A recent study presented at 2010′s UN climate summit in Cancun predicted that global warming could double grain prices by 2050 and leave millions more malnourished. This latest research, “Climate Trends and Global Crop Production Since 1980,” was published in Thursday’s issue of the journal Science .

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Mayors To Washington: ‘We Need Money’

April 30, 2011

CHICAGO — Near the end of a two-day summit here that brought together mayors and federal officials to talk about city design, the mood turned confrontational. It started when Philadelphia Mayor Michael Nutter , in the middle of a Friday discussion on the federal government’s role in city development, turned toward the Washington officials who were sitting with him on stage and expressed his disappointment. “Mayors could never get away with the kind of nonsense that goes on in Washington,” he said. “In our world, you either picked up the trash or you didn’t. You either moved an abandoned car or you didn’t. You either filled a pothole or you didn’t. That’s what we do every day. And we know how to get this stuff done.” That evidently hit a nerve, as cheers erupted through the Grand Ballroom of the Hilton hotel, where many in the audience were mayors. Manny Diaz, former mayor of Miami, who sat on stage with Nutter, gave an impromptu speech criticizing Washington lawmakers. Other mayors stood up and took the microphone during the question and answer session — not to ask questions, but to get things off their chests. The event, co-sponsored by the National Endowment for the Arts, the American Architectural Foundation and the U.S. Conference of Mayors, became, for a few minutes, a forum for mayors to express a difficult truth: Two-and-a-half years after the worst financial crisis since the Great Depression, the nation’s cities still struggle with chronic budget gaps that can’t easily be filled. Tax revenue has plunged as property values have fallen and payrolls have shrunk. Local governments, many of which are legally required to balance their budgets, have made cuts that a few years ago would have been unthinkable. Municipal budget woes stem partially from crises on the state level, which in turn aren’t helped by a lack of federal assistance. Federal dollars from the American Recovery and Reinvestment Act covered less than half of states’ combined budget shortfall during this fiscal year, according to a recent report from the nonpartisan Center for Budget and Policy Priorities . Come next fiscal year, which for many states begins this July, states’ combined shortfall will exceed $110 billion, with only $6 billion in federal aid available, according to the report. That leaves cities out in the cold, as states focus on solving their own problems. In Newark , aid from the state of New Jersey fell by 40 percent between 2008 and 2010, contributing to a budget crisis that eventually prompted the city, one of the country’s most dangerous according to FBI data, to lay off 13 percent of its police force late last year. In Milwaukee County , a community that has contended with a decade-long erosion of bus service, a transit cut in the coming state budget could deal a critical blow to the region’s public transportation. “We get the brunt of what the recession really entails. We’re also the last to come out of that,” Ed Pawlowski, the mayor of Allentown, Pennsylvania, said in an interview after the panel discussion. “While the economy is getting slowly better, cities are still struggling in a significant way.” Mayors want federal money. They say they can put it to quick and efficient use, creating jobs and helping improve the economy from the bottom up. Nutter gave an example: He closed Philadelphia’s crumbling South Street Bridge in 2008, initiating a two-year repair project that was completed on budget and a month early last fall, he said. But federal funds are running dry, as Washington lawmakers have become seemingly obsessed with a desire to cut the federal deficit. In April, lawmakers almost shut down the federal government as they argued over a few billion dollars in spending cuts. Now, some are saying they will not vote to increase the debt ceiling, and risk leading the nation into default, just to enforce budget austerity. The four federal officials who sat on stage during the discussion — Derek Douglas, special assistant to the president on the White House Domestic Policy Council; Roy Kienitz, under secretary for policy at the Department of Transportation; Salin Geevarghese, senior advisor at the Department of Housing and Urban Development; and Rocco Landesman, chairman of the National Endowment for the Arts — became punching bags. “You guys need to keep your day jobs. You’d make lousy mayors,” said Jennifer Hosterman, mayor of Pleasanton, California, addressing the federal officials as she stood on the ballroom floor. “To hear from the four of you all of your gyrations and concerns and discussion about how we communicate with local government — we at local government just have to make it happen.” The moderator, Carol Coletta, the former executive director of the NEA initiative the Mayors’ Institute on City Design, tried to ease the tension. “What are you asking them to do?” she said. “I mean, what is it that they’re keeping you from doing?” Hosterman talked about her efforts to come into compliance with California’s Global Warming Solutions Act. She described months of intense, focused efforts to make her city more efficient. She has specific goals in mind, she said, but she needs more resources. “Love the dialogue — thank you very much for that,” she said. “But we need money.” The audience laughed in assent, clapping loudly. The federal officials on stage were speaking in broad, theoretical terms. But the mayors wouldn’t stand for that. They knew what needed to get done, they said. What they wanted from Washington was the dollars to do it. “We should not be expecting or depending on top-down permission from the White House or Washington to have us advocate for this stuff,” said R. T. Rybak, mayor of Minneapolis, who stood up and addressed the other mayors. Earlier, Mayor Nutter had complained about the seeming hypocrisy of federal lawmakers who go to ribbon-cuttings and ground-breakings, even if they never supported the legislation for those projects. Rybak heartily commiserated. “I’ve seen those guys at the ribbon cuttings. And it pisses me off,” he said. “But I go out and organize at election time and tell people exactly who delivered and who did not.” Douglas, of the White House Domestic Policy Council, said federal officials are doing what they can to help. But political gridlock can muck up the process. “We do hear you,” he said. “If you look at the president’s budget proposal for FY12 and you go look at the transportation section that he proposed — this is what he’s asking for — the stuff you’re talking about is in there. That’s what he requested. Is he going to get what he requested?” “We can ask for everything under the sun,” Douglas added. “But just because we ask for it doesn’t necessarily make it so.” But the mayors were not satisfied. Diaz, the former mayor of Miami, said that the conversation in Washington is the opposite of what it should be. Instead of cutting spending, he said, lawmakers should be finding ways to support job-creation and help the economy grow. It’s the mayors, he said, who create jobs. But the mayors aren’t getting the federal support they need. “We’ve got to figure it out. All of us have very, very difficult budget times right now. But notwithstanding that, we have to figure out how to do it,” he said. “As a matter of fact, there’s a greater argument to move the country forward now, because we’re in the dumps, than when things were hopping five, 10 years ago.” Kienitz, of the Department of Transportation, suggested that Diaz run for U.S. Congress. “You could provide that leadership that we need,” Kienitz said. “Thanks,” Diaz replied, “but I don’t want a job in Washington.”

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Supreme Court Casts Doubt On States’ Global Warming Suit

April 19, 2011

WASHINGTON — The Supreme Court appeared deeply skeptical Tuesday about allowing states to sue electric utilities to force cuts in greenhouse gas emissions from power plants. Both conservative and liberal justices questioned whether a federal judge could deal with the complex issue of global warming, a topic they suggested is better left to Congress and the Environmental Protection Agency. The court heard argument over whether to end the lawsuit by six states, New York City and three conservation groups against four private companies and the federal Tennessee Valley Authority, the five largest emitters of carbon dioxide in the United States. The Obama administration has joined with the companies in asking the high court to throw out the lawsuit. The administration says EPA already is considering setting emission standards that would accomplish what the states are seeking. Why let the lawsuit go forward, when “the agency is engaged in it right now?” said Justice Ruth Bader Ginsburg. The lawyer representing the states acknowledged that the case was before the high court at a “peculiar moment,” but said the court should block the lawsuit only if the EPA actually issues regulations. In Congress, Republicans are leading an effort to strip EPA of the authority to regulate greenhouse gases, but that was not discussed at the court Tuesday. No statute or rule “currently regulates the emissions of existing power plants,” said Barbara Underwood, the New York solicitor general. Underwood said the plants operated by the companies and the TVA account for 10 percent of all carbon dioxide emitted annually in the U.S. “This court should not close the courthouse door at the outset,” Underwood said. Lawyers for the companies and the administration focused on the enormity of the climate change issue to argue against the lawsuit. “You have never heard a case like this before,” Neal Katyal, the acting U.S. Solicitor General, said. The term global warming, Katyal said, “tells you all you need to know.” The case is the second climate change dispute at the court in four years. In 2007, the court declared that carbon dioxide and other greenhouse gases are air pollutants under the Clean Air Act. By a 5-4 vote, the justices said the EPA has the authority to regulate those emissions from new cars and trucks under that landmark law. The same reasoning applies to power plants. Ginsburg was among the justices in the majority in 2007. Two others in that majority, Justices Stephen Breyer and Anthony Kennedy, also expressed doubts about the states’ case Tuesday. Breyer questioned whether a judge even would have the authority to issue the kind of order the states want. Until now, pollution cases in the federal courts typically have involved a power plant or sewage treatment plant that was causing some identifiable harm to people, and property downwind or downstream of the polluting plant. Peter Keisler, representing the companies, said global warming suggests a more complex problem in need of a comprehensive solution that includes an evaluation of the “way we use and pay for energy.” Courts are ill-equipped to make that determination, Keisler said. The private defendants in the suit are American Electric Power Co. of Ohio, Cinergy Co., now part of Duke Energy Corp. of North Carolina; Southern Co. Inc. of Georgia, and Xcel Energy Inc. of Minnesota. Eight states initially banded together to sue. They were California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin. New Jersey and Wisconsin withdrew this year after Republicans replaced Democrats in their governor’s offices. Justice Sonia Sotomayor, who was on the federal appeals court panel that heard the case, is not taking part in the Supreme Court’s consideration of the issue. A decision is expected by late June. The case is American Electric Power Co. v. Connecticut, 10-174.

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‘Death Panel’ For Elmo?

February 12, 2011

House Republicans called for cuts in hundreds of programs across the face of government Friday night in a $61 billion savings package toughened at the last minute at the demand of tea party-backed conservatives. From education to job training, the environment and nutrition, few domestic programs were left untouched – and some were eliminated – in the measure, which is expected to reach the floor for a vote next week. Among the programs targeted for elimination are Americorps and the Corporation for Public Broadcasting. In contrast, spending on defense and veterans’ programs were protected. U.S.News & World Report notes that liberal groups, along with public radio and television stations, are preparing for a showdown with House Republicans over the budget cut proposal. “Fans of Big Bird and All Things Considered ” are reportedly readying for battle as well. “They probably think that no one will notice these cuts in the midst of so many others. But the millions of listeners and viewers who rely on public broadcasting for Sesame Street, All Things Considered, and independent journalism will notice,” said MoveOn.org in an urgent E-mail just sent out. “We need to tell Republicans that cutting off funding was unacceptable last time they were in charge, and it’s unacceptable now,” said MoveOn. The New York Times reports : It blocks the spending of about $2 billion in unused economic stimulus money and seeks to prevent the Internal Revenue Service from enforcing the new health care law. The measure also cuts financing directly from the office of the president. The measure marks an initial down payment by newly empowered Republicans on their promise to rein in federal deficits and reduce the size of government. In a statement, House Majority Leader Eric Cantor, R-Va., called the measure “a historic effort to get our fiscal house in order and restore certainty to the economy. .This legislation will mark the largest spending cut in modern history and will help restore confidence so that people can get back to work.” Democrats harshly criticized the bill within moments of its formal unveiling, signaling the onset of weeks of partisan struggle over spending priorities. House Democratic leader Nancy Pelosi issued a statement calling the bill irresponsible, adding that it would “target critical education programs like Head Start, halt innovation and disease research, end construction projects to rebuild America and take cops off the beat.” But first-term Republican conservatives claimed victory after forcing their own leadership to expand the measure after rejecting an earlier draft as too timid. “$100 billion is $100 billion is $100 billion,” said Rep. Tim Scott R-S.C., referring to amount the revised package would cut from President Barack Obama’s budget request of a year ago. That was the amount contained in the Republican “Pledge to America” in last fall’s campaign, and when party leaders initially suggested a smaller package of cuts this week, many of the 87-member freshman class who have links to the tea party rebelled. In fact, even some Republicans acknowledged privately the legislation will cut about $61 billion from current spending on domestic spending. Some of the largest cuts would be borne by WIC, which provides nutritional support for women and infants, cut by $747 million, and training and employment grants to the states, ticketed for a $1.4 billion reduction. In addition, Republicans proposed a 43 percent cut in border security fencing and a 53 percent reduction in an account used to fund cleanup of the Great Lakes. The measure also asserts Republican priorities in several contentious areas. It prohibits the Nuclear Regulatory Commission from terminating plans for a nuclear waste site at Yucca Mountain in Nevada – a direct challenge to Senate Majority Leader Harry Reid, D-Nev. Reid dissented quickly, issuing a statement that said, “Any attempt to restart the Yucca Mountain project will not happen on my watch as Senate majority leader.” The Environmental Protection Agency would be banned from regulating greenhouse gases, linked to global warming, from fixed sources such as factories. The District of Columbia could not use federal funds to run a needle-exchange program for drug users. While a 48-hour revolt by tea party-backed conservatives roiled the party this week, its conclusion could mean an easier path to passage for the spending cut bill when it reaches the House floor. “The leadership responded to the concerns of those who are far to the right of the middle,” said Scott. The cuts will become part of a spending bill that is needed to keep the government in operation through the Sept. 30 end of the fiscal year. The current funding authority expires on March 4. Passage in the Republican-controlled House would send the bill to the Senate, where Democrats control a majority and are certain to support more generous funding levels. Barring a compromise before March 4, the two houses will be under pressure to agree on a short-term bill to keep the federal government operating without interruptions. Even that could prove difficult, though, and Democrats assert that Republicans will resort to a government shutdown to get their way. “It is time for the House Republicans to stop with the games and finally rule out a government shutdown once and for all,” said Sen. Chuck Schumer, D-N.Y. “Stop being coy about it and take it off the table.” Congressional Republicans were damaged politically in 1995 when a protracted dispute over funding with President Bill Clinton led to a government shutdown.

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Mike Lux: Obama’s Chamber Speech: The Debates About Regulation and the Social Contract

February 7, 2011

It was hard for this old progressive warrior to see President Obama go give a speech to the Chamber of Commerce. The Chamber was always conservative, but for the last 16 years (since a takeover in 1994 by a hard-right faction), it has become one of the worst institutions in America. With its tens of millions in anonymously funded and blatantly partisan attack ads; its far-right positions on health care, global warming, and taxes; and its blatant selling of its lobbying services for any company that wants to attack legislation but needs a front group, the Chamber has soiled its reputation almost beyond repair. Having said that, I also think the president is the president for the entire country, and I have no problem with him meeting with anyone, even his political opposition. If I have no problem with Obama meeting with Boehner and McConnell — which I don’t — I can’t see why he shouldn’t go give a speech to the Chamber. As long as he understands who they are, and how much damage they want to do to him in most other circumstances, speaking to them is no problem. The other thing is that speaking to them also gives him a chance to challenge them. Did he do that enough in his speech? Not to my tastes, of course. I wish he would have banged on them — directly challenging them on things like all the anonymous ads they ran in the 2010 cycle — a lot more than he did. And I couldn’t disagree more with Obama in his extended embrace of “free trade” deals that do damage to American workers and jobs. But there were two important times when Obama did make at least a nuanced argument in direct opposition to the Chamber’s ideology. On neither point did he say enough, but I thought both were interesting. The first is on the debate over regulations. Obama reached out to the Chamber on the issue of regulatory overhaul, but as in the State of the Union, he gave a relatively strong defense of some government regulations as being both necessary and actually helpful to the economy: So we were just talking about regulations. Even as we eliminate burdensome regulations, America’s businesses have a responsibility as well to recognize that there are some basic safeguards, some basic standards that are necessary to protect the American people from harm or exploitation. Not every regulation is bad. Not every regulation is burdensome on business. A lot of the regulations that are out there are things that all of us welcome in our lives. Few of us would want to live in a society without rules that keep our air and water clean; that give consumers the confidence to do everything from investing in financial markets to buying groceries. And the fact is, when standards like these have been proposed in the past, opponents have often warned that they would be an assault on business and free enterprise. We can look at the history in this country. Early drug companies argued the bill creating the FDA would “practically destroy the sale of… remedies in the United States.” That didn’t happen. Auto executives predicted that having to install seatbelts would bring the downfall of their industry. It didn’t happen. The President of the American Bar Association denounced child labor laws as “a communistic effort to nationalize children.” That’s a quote. None of these things came to pass. In fact, companies adapt and standards often spark competition and innovation. I was traveling when I went up to Penn State to look at some clean energy hubs that have been set up. I was with Steve Chu, my Secretary of Energy. And he won a Nobel Prize in physics, so when you’re in conversations with him you catch about one out of every four things he says. (Laughter.) But he started talking about energy efficiency and about refrigerators, and he pointed out that the government set modest targets a couple decades ago to start increasing efficiency over time. They were well thought through; they weren’t radical. Companies competed to hit these markers. And they hit them every time, and then exceeded them. And as a result, a typical fridge now costs half as much and uses a quarter of the energy that it once did — and you don’t have to defrost, chipping at that stuff — (laughter) — and then putting the warm water inside the freezer and all that stuff. It saves families and businesses billions of dollars. So regulations didn’t destroy the industry; it enhanced it and it made our lives better — if they’re smart, if they’re well designed. And that’s our goal, is to work with you to think through how do we design necessary regulations in a smart way and get rid of regulations that have outlived their usefulness, or don’t work. I also have to point out the perils of too much regulation are also matched by the dangers of too little. And we saw that in the financial crisis, where the absence of sound rules of the road, that wasn’t good for business. Even if you weren’t in the financial sector it wasn’t good for business. And that’s why, with the help of Paul Volcker, who is here today, we passed a set of common-sense reforms. The same can be said of health insurance reform. We simply could not continue to accept a status quo that’s made our entire economy less competitive, as we’ve paid more per person for health care than any other nation on Earth. Nobody is even close. And we couldn’t accept a broken system where insurance companies could drop people because they got sick, or families went into bankruptcy because of medical bills. That is not someone apologizing for the need to regulate just a wee little bit; that is a fairly robust argument in favor of an active regulatory role for the federal government. At a time in our country’s history when Republicans and most business executives think of regulations as the ultimate dirty word, and a time when one of the biggest bank’s spokesperson brags that “the bank CEOs have been collaborating with the Fed” on their regulatory policy, for the president to give that kind of vigorous defense in terms of the need for regulations in front of the Chamber is a very positive thing. By the way, in case you didn’t think you were reading that quote right because a bank spokesman couldn’t possibly be that arrogant, or that perhaps I was taking it out of context, you are wrong. The Bank of America and their CFO Charles Noski really did happily admit that the biggest bank CEOs “collaborate” with regulators on their regulatory policy, in this case on the swipe-fee issue, an issue I have been following closely while working with retailers and consumer groups. Hopefully the Fed will “collaborate” just as closely with all the small businesses and consumers impacted by swipe fees as they are doing with bank CEOs. This is the environment we are in right now, though; bankers feel no need to hide their blatant attempts to seduce and capture regulators. Given that environment, the president standing up for certain strong regulations is a very positive thing. The second area of the president’s speech that I loved was about the social compact. When I first heard that Obama would be speaking to the Chamber, as soon as I stopped cursing, my first thought was this: I hope he makes the case for the social contract, or as he called it, compact. That old but still central idea, totally rejected by the kind of selfishness-is-a-virtue, Ayn Rand conservatives who dominate in too many corporate board rooms and the modern Republican Party, is that there is contract between our country’s citizens, government, and private sector, that much is given to each of us but much is required in return. As President Obama said: But we have to recognize that some common-sense regulations often will make sense for your businesses, as well as your families, as well as your neighbors, as well as your coworkers. Of course, your responsibility goes beyond recognizing the need for certain standards and safeguards. If we’re fighting to reform the tax code and increase exports to help you compete, the benefits can’t just translate into greater profits and bonuses for those at the top. They have to be shared by American workers, who need to know that expanding trade and opening markets will lift their standards of living as well as your bottom line. We can’t go back to the kind of economy and culture that we saw in the years leading up to the recession, where growth and gains in productivity just didn’t translate into rising incomes and opportunity for the middle class. That’s not something necessarily we can legislate, but it’s something that all of us have to take responsibility for thinking about. How do we make sure that everybody’s got a stake in trade, everybody’s got a stake in increasing exports, everybody’s got a stake in rising productivity? Because ordinary folks end up seeing their standards of living rise as well. That’s always been the American promise. That’s what JFK meant when he said, “A rising tide lifts all boats.” Too many boats have been left behind, stuck in the mud. And if we as a nation are going to invest in innovation, that innovation should lead to new jobs and manufacturing on our shores. The end result of tax breaks and investments can’t simply be that new breakthroughs and technologies are discovered here in America, but then the manufacturing takes place overseas. That, too, breaks the social compact. It makes people feel as if the game is fixed and they’re not benefiting from the extraordinary discoveries that take place here. So the key to our success has never been just developing new ideas; it’s also been making new products. So Intel pioneers the microchip, then puts thousands to work building them in Silicon Valley. Henry Ford perfects the assembly line, and then puts a generation to work in the factories of Detroit. That’s how we built the largest middle class in the world. Those folks working in those plants, they go out and they buy a Ford. They buy a personal computer. And the economy grows for everyone. And that’s how we’ll create the base of knowledge and skills that propel the next inventions and the next ideas. The president didn’t challenge the Chamber, or the American business community, enough in his speech. I sure would have banged on them some for sleazy anonymous attack ads paid for by secretive, and possibly foreign, corporations. I would have been more direct in my criticism of too many companies not creating more jobs while making record profits last year, and in outsourcing jobs and escaping taxes through phony offices in foreign countries. But it was good to see him make a strong case for the role of regulation, and for the importance of the social contract. To go before a group like the Chamber and make those arguments required some guts, and I appreciated that he did it.

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Daniel Dicker: SOTU Misses on an Easy Win: Natural Gas

January 26, 2011

Disappointingly missing from President Obama’s State of the Union address was any real talk about energy policy. Aside from his mentioning a goal of 80% electric power from renewables by 2035 — a difficult if not impossible task — nothing was mentioned about global warming or an abandoned cap and trade bill in the Senate. Most disappointing was a failure to follow up on what is so clearly the easiest energy choice this president can make today to stimulate the economy and free us from imported oil — natural gas. I’ve been consistently talking about the many advantages to be gained from conversion to natural gas and I’ve hardly been alone; just this morning, T. Boone Pickens on Morning Joe again discussed the importance and inevitability of domestic natural gas and the need for leadership and government incentives to jumpstart the process. Natural gas is inarguably cleaner, greener, cheaper and entirely domestic. The US supply of proven reserves of natural gas is more than 200 trillion cubic feet and the estimated potential supply of natural gas from shale and other sources is more than 1800 trillion cubic feet. This makes the United States the single largest potential producer of natural gas on the globe and puts it close in potential supply to the entire supply in the Middle East or Asia. Such a massive supply just cannot be much longer ignored. We are yearly donating more than $200 billion to foreign nations that don’t much like us for crude oil imports, imports that could be replaced by fully domestic natural gas supplies. But Boone’s right — despite the fact that he has investments that would benefit from government incentives — the price of developing natural gas and technologies for vehicles, generation, storage and transport of this fantastic fuel will not come from the private sector alone with gas prices hovering around $4 dollars. If the president is convinced about “investment” — a major theme of last night’s SOTU — he will hopefully soon consider investment in federal incentives for natural gas. There are admittedly environmental hurdles to overcome, but for the sake of job creation, a recovering economy and frankly for national security, he couldn’t steer energy policy on a more positive course.

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Marian Salzman: Mad as Hell–and Only Getting Madder

November 29, 2010

This is the first in a series of 12 posts expounding on the 2011 forecasts in the annual trends report from Salzman, president of Euro RSCG Worldwide PR and an internationally respected trendspotter. Despite the relatively peaceable environment abroad–there’s a successful coalition, for now, in the U.K., and Australians still appear confident despite debt problems–the U.S. in 2011 is going to flash even red-hotter than the map of the country at midterm elections. Temperatures at home are pushing up the mercury, and not because of global warming or climate change. It’s a trend that extends from politics to domestic life: Expect men at home to be angry at their wives, working women to express ire over being their household’s sole wage-earner, and everybody to be furious about taxes, privacy, individual freedoms and more. Ordinary Americans will have their feedback loops set on tantrum. We maybe haven’t seen so much anger since 1976 when Peter Finch, playing anchorman Howard Beale in Network , came in from the rain to exhort his audience to express themselves. (“I want you to get up right now and go to the window. Open it, and stick your head out, and yell, ‘I’M AS MAD AS HELL, AND I’M NOT GOING TO TAKE THIS ANYMORE!’”) Headlines show banks once again making billions (and well-connected bankers aren’t doing so poorly, either), while the middle class have lost savings, homes, health care, jobs, prospects. The millennials can’t find jobs. The poor have less faith than ever about staying in school (1.2 million Americans drop out ). Washington talks about solutions, but for many Americans, government itself plays out as the problem. Listen in on Rand Paul’s acceptance speech in Kentucky, the new purple-grass state. His chorus of ” Deliberate upon this ” had the ring of a schoolyard heavy premeditating a rumble at the noon bell. During the race, even MSNBC liberal pundit Chris Matthews flashed plenty mad at Paul’s opponent , Democrat Jack Conway, whose attempt to smear Paul with an anonymous source in the “Aqua Buddha” ad toppled as hard in the heartland as the statue of Saddam Hussein once did in Baghdad. On Twitter, AT&T users get really upset at how frequently iPhones drop their calls . AT&T’s SoMe strategy– mapping angry tweeters’ locations to try to restore service and confidence–is, depending on your point of view, either another noxious example of “eavesdropping” or a positive response to a negative. The Gap felt the blowback of contagious wrath on SoMe after it tried redesigning its logo. Even though business press critics called the company ” spineless ” for backing down, the detractors asking for the old Gap back–in droves on social and digital media–won. Don’t doubt it: Consumers are mistake-intolerant for brands and causes. As for what used to be called “customer satisfaction,” Frances Allen, EVP and CMO of Denny’s, offers that “insight” and “innovation” are among the few things you can do when they’re losing it. You can also plan ahead. Before the urge to attack strikes, brands must know what “insightful” means, from extracultural preferences to all-American nostalgia, and anticipate the defensive game plan. You don’t want to wind up with fingers pointing every which way, as Samsung did when its Lebanese ad agency FP7 Doha took a creative prize for a spot the client had never seen. The trouble started when the public saw it–a robed Jesus snapping a picture of a group of nuns–and went berserk. Anger, it turns out, just isn’t that easy to unstrand even by the most evolved among us. The Dalai Lama tweets that the energy of anger feels like progress but is “almost always unreliable,” as emotions go. It’s Buddhist theology that it’s possible to have compassion without attachment and anger without hatred. But don’t try telling that to Rep. John Yarmuth, a Dem whose win of a House seat in Kentucky he called ” bittersweet ” because of the flavor of the harsh language heaped on Nancy Pelosi and President Obama all year. What is sure is that anger is the color of the zeitgeist now, and anyone who isn’t tapping it risks appearing out of touch. When MSNBC network star Keith Olbermann got suspended without pay earlier this month for making three Democratic political contributions, including against Rand Paul, one gloating headline read: “Time to Feast on a Delicious Second Helping of Schadenfreude.” After Election Day, pundits on the right weighed in about Olbermann and MSNBC’s commentators, while other sites noted that the staff of some defeated Democrats had talked to grief counselors after the election–a soft touch seemingly tailor-made for the very angry to dis. Indeed, this emotion–anger–which has been analyzed by everybody from Sigmund Freud to 12-step gurus as sublimation of fear, anxiety or grief, doesn’t feel the need today to get deeply in touch with its masks. Like Bill Clinton trying to parse what “is” is, anger is the new “it.” And being angry makes for dynamics. Seth Godin has noted that angry people grab attention because they are interesting, and interesting people will get more air time for their angry message, helping them in turn set agendas and get elected. In the new movie Skyline , futuristic warmongers descending on Los Angeles first appear as so many dropping points of light. They’re robotic cyberwarriors, metal hulks that first dazzle, then destroy. How ’bout this new phrase: light-rippin’ mad! Back in Prohibition (the era for the new HBO series “Boardwalk Empire”), shrinks thought angry people should dispel their emotion at the piano, by banging out “The Devil’s Sonata.” Not having any was boardwalk boss Enoch Thompson (Steve Buscemi), who skipped go (and did not go directly to jail) by setting his childhood house (and bad memories) literally on fire. With the casualties of voter anger feeling the chill winds of Alaska, and the Tea Party steeping those enmities as one serious kind of ” flippin’ fun ,” look for a kinder, gentler era to become itself an object of public ire. I expect, in the personal sphere, we’ll see more and bigger cases of domestic violence and the faceless menace that is cyberstalking . Meanwhile, expect the political arena to roil ever hotter. Barack Obama’s cool, calming rhetoric hit the spot for many Americans in panic-stricken 2008. In retrospect, his no-drama persona appealed just long enough to get him elected, but now it’s very two years ago. Tomorrow: “Talk to the Hands”

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Steven Hill: Reconsidering Japan, Reconsidering Paul Krugman

November 19, 2010

The New York Times is doing a series on Japan that it describes as an examination of “the effects on Japanese society of two decades of economic stagnation and declining prices.” Reading the series is about as cheery a task as rubbernecking at a car wreck on I-95. But unfortunately the Times series simply repeats the “conventional wisdom” about Japan put out by the same economic experts who missed an $8 trillion housing bubble in the United States, and in fact have been wrong on most of the big economic issues over the past two decades. Look at it this way: In the midst of the Great Recession, the United States is suffering through nearly 10% unemployment and 50 million people without health insurance. A new report has found over 14% of Americans living below the poverty line, including 20% of children and 23% of seniors, the highest since President Lyndon Johnson’s War on Poverty. That’s in addition to declining prospects for the middle class, and a general increase in economic insecurity. How, then, should we regard a country that has 5% unemployment, healthcare for all its people, the lowest income inequality and is one of the world’s leading exporters? This country also scores high on life expectancy, low on infant mortality, is at the top in literacy, and is low on crime, incarceration, homicides, mental illness and drug abuse. It also has a low rate of carbon emissions, doing its part to reduce global warming. In all these categories, this particular country beats both the U.S. and China by a country mile. Doesn’t that sound like a country from which Americans might learn a thing or two about how to get out of the mud hole in which we are stuck? Not if that place is Japan. During and before the current economic crisis, few countries have been vilified as an economic basket case as much as the Land of the Rising Sun. Google “Japan and its economy” and you will get numerous hits about Japan’s allegedly sclerotic economy, its zombie banks, its deflation and slow economic growth. This malaise has even been called “Japan syndrome”, sounding like a disease to warn policymakers, as in “you don’t want to end up like Japan.” No one has been more influential in defining this narrative than New York Times columnist and Nobel Prize-winning economist Paul Krugman. Throughout the 1990s, and still occasionally today, Krugman has skewered Japan’s economy and leaders. In the late 1990s, Krugman wrote a series of gloom-and-doom articles, complete with equations, theories and titles like “Japan’s Trap” and “Setting Sun”, bluntly stating: “The state of Japan is a scandal, an outrage, a reproach. It is operating far below its productive capacity, simply because its consumers and investors do not spend enough.” Krugman was commenting on Japan’s so-called “lost decade” of the 1990s, when the Japanese economy was considered sluggish and underperforming. But let’s look at some of the Japanese metrics during that time. Throughout the 1990s the Japanese unemployment rate was — ready for this? — about three percent. Not 30, that’s 3. About half the US unemployment rate at the time. During that allegedly “lost decade,” the Japanese also had universal healthcare, less inequality, the highest life expectancy, and low rates of infant mortality, crime and incarceration. Americans should be so lucky as to experience a Japanese-style lost decade. Reopening the case of Japan raises some important questions. How do economists such as Krugman decide what to value and prioritize, or what to measure? What is an economy for? To produce the prosperity, security and services that people need? Or to satisfy economists and their equations, theories and models? For too many economic Cassandras, if their spreadsheet columns don’t add up, if the surplus nations don’t balance the deficit nations and the supply doesn’t meet the demand, then disaster surely awaits. Krugman has gone on the attack again recently, this time in a debate over fiscal stimulus vs. deficit reduction as a strategy toward economic recovery. As a stimulus hawk, he has written that the Germans — one of the few economic bright spots in a struggling global economy — “seem to be getting their talking points from the collected speeches of Herbert Hoover.” He is criticizing Germany for the same thing he criticizes Japan — not spending or consuming enough to stimulate its economy. But what exactly are the Germans or Japanese supposed to buy more of? Surely Krugman has visited both countries, and it’s plainly evident that neither are lacking in any material goods or modern trinkets to speak of. Americans are the only ones who seem to think they need three refrigerators, four televisions and a car for everyone in the household. Too many economists have yet to figure out that it is this consumer-driven economic model that has crashed and burned. Japan’s economy has been and remains successful. So is Germany’s. Unlike the trickle down U.S. economy, Japan and Germany have reached an economic steady state in which they don’t need roaring growth rates to provide for their people, and here’s why: they are better at sharing the wealth produced by their economies to foster a more broadly shared prosperity among their populaces. But for the economic experts, apparently, it doesn’t matter if people’s needs are being met; what matters is whether their theories and equations balance. Similarly with the media like the New York Times , which has been getting it wrong for years — they also missed an $8 trillion housing bubble, as well as weapons of mass destruction in Iraq (prompting the Times to issue an unprecedented mea culpa to their readers). In the same way, the Times and the rest of the media have been missing the real story about what is occurring in Japan and Europe. As a result, there is a common sense aspect to this that gets lost amid the rhetoric and the headlines. Two lessons of our times are that economic bubbles eventually burst, and that the environmental consequences of unbridled growth in this age of global warming are severe. The world needs to figure out how advanced economies can provide for their people without having roaring growth rates driven by asset bubbles. If consumer-driven growth was the order of the day in the post-World War II era, going forward it is going to be steady-state economic growth — growing not too fast, but not too slowly — and learning to do more with less. Yet stimulus hawks like Krugman don’t seem to get this; they want to crank the “growth machine” into full gear with huge government stimulus spending. But the real game is no longer strictly about economic growth, it’s also about sustainability. The era of U.S.-style trickle-down economies is over for wealthy countries because trickle-down is neither economically sound nor ecologically sustainable. The developed nations must lead the way towards a different path of development. This is not an easy challenge, yet it is the course that Japan and Germany have chosen. If the U.S. didn’t have such a trickle-down economy that has produced so much inequality — if it was, in fact, better at sharing its wealth — perhaps it wouldn’t need so much fiscal stimulus and growth. At the recent G-20 meeting in Seoul, South Korea, German Chancellor Angela Merkel rebuffed President Barack Obama and Secretary of the Treasury Timothy Geithner’s appeals to go back to the toxic economics of Wall Street capitalism. Said Merkel, “It is essential to return to a sustainable growth path.” One cause of the crisis was that “we did not have sustainable growth. In many countries growth was built on debt and [speculative] bubbles.” Her finance minister, Wolfgang Schäuble, was even more blunt. He described American policy as “clueless” and said the American growth model is stuck in a deep crisis. “The USA lived off credit for too long, inflated its financial sector massively and neglected its industrial base.” Catch the irony: Germany — previously sneered at by U.S. pundits for its “weak and sclerotic” economy — is lecturing America about how to grow our economy. Given Germany’s 6.7% unemployment (compared to 9.6% in the US) and an impressive record at manufacturing things that the rest of the world wants to buy, the Obama administration as well as Paul Krugman should be listening attentively. Steven Hill is a political writer whose latest book is Europe’s Promise: Why the European Way is the Best Hope in an Insecure Age (www.EuropesPromise.org). He is blogging about his recent 12-nation, 20-city speaking tour in Europe at ” Dispatches from Europe ” posted by the Washington Monthly website.

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Hunt Ramsbottom: Prop 23: It’s About Our Future

October 27, 2010

The November 2 election is less than a week away. At the polls, voters will determine the fate of California’s leadership role in developing a clean energy economy. Proposition 23, an initiative on the ballot, aims to suspend landmark environmental laws in California. If Prop 23 is approved by voters, the implementation of the California Global Warming Solutions Act (Assembly Bill 32 or AB 32) will be suspended until the state unemployment rate drops to 5.5% or below for four consecutive quarters. Currently California’s unemployment rate is 12.4%. Jobs are being lost every day. Businesses are closing. Yet the one sector that is driving employment and growth in California is clean energy. The clean technology industry employs over a half-million Californians, and these jobs are growing at a rate more rapid than the statewide average. Since the implementation of AB 32, California has garnered over $9 billion of private investment capital and is the center for clean technology innovation. With the passage of Prop 23, California would lose its market leadership and thousands of clean technology jobs. Prop 23 would destabilize the investment market and prompt companies to reduce investment or relocate to other states and nations with strong environmental policies and incentives. In the race to lead the clean technology revolution, Prop 23 will stunt the growth of California’s green economy. AB 32 was enacted in 2006 with the support of businesses, labor, environmental and health organizations. AB 32 requires California’s greenhouse gas emissions to be reduced to the levels of 1990 by the year 2020. To meet these goals, AB 32 provides the authority for implementing California’s Low Carbon Fuel Standard (LCFS) and Renewable Portfolio Standard (RPS), both of which create immediate demand for large-scale, low-carbon and renewable transportation fuel and electric power. AB 32 also authorizes California to create a market for greenhouse gas reduction credits. As part of this program, the California Air Resources Board (CARB) would develop protocols for certifying the low-carbon and other pollution-reduction attributes of clean energy technologies. Once these protocols are in place, California’s clean technology companies will have a powerful mechanism to sell their clean energy technology and products in the broader U.S. and global marketplaces. Together, the RPS, LCFS and AB32, programs create the essential elements for California’s clean technology companies to invest billions of dollars in new equipment and technology, which will provide new jobs for California workers, enabling California to become a global leader in clean technology. A “Yes” vote on Prop 23 jeopardizes both economic growth and the improvement of air quality in California, and delays the reduction in the emission of detrimental greenhouse gases. Many businesses and organizations oppose Prop 23, Rentech, Inc. being one of them. Rentech is a Westwood-based company with domestically developed technologies that process waste materials into ultra-clean, renewable synthetic diesel and green base-load electricity. These products are direct substitutes for traditional diesel and power sources and have very low lifecycle greenhouse gas emissions. Rentech is a founding member of the Green Technology Leadership Group (GTLG), an organization committed to providing policy leadership for the clean energy sector. The GTLG launched an innovative new media campaign to oppose Prop 23. The GTLG “No on Prop 23″ campaign is producing a series of video shorts with SHFT.com , the environmental new media site founded by actor-activist Adrian Grenier and film producer Peter Glatzer. The videos are being disseminated to high-traffic websites to target over one million voters. The videos, viewable at www.greentechleadership.org , focus on the growth of jobs and economic investment as a result of California’s environmental policies such as AB 32, the Low Carbon Fuel Standard, and Renewable Portfolio Standard. Prop 23 will stop job creation, investment and innovation threatening California’s economy and environment. It’s about our future. D. Hunt Ramsbottom is President and CEO of Rentech, Inc. Rentech, which stands for Renewable Energy Technologies, is a global provider of clean energy solutions. The Company is developing projects for the production of certified synthetic fuels and electric power from carbon-containing materials such as biomass and waste resources. Please visit www.rentechinc.com for more information.

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A CONVENIENT TRUTH: Gearing Up For Climate Change Could Supercharge The Job Market

September 28, 2010

(This is Idea No. 5 in Huffington Post’s ongoing America Needs Jobs series; see the introduction .) Could one major crisis be solved…. by solving another? If we’re talking about the nation’s desperately poor job market on the one hand, and the dire threat of climate change on the other, then the answer is: Quite possibly, yes. The solution to both would be an enormous investment in green technology and green jobs — creating a robust “clean energy economy” while reducing carbon emissions; putting millions of Americans back to work while increasing our energy independence; rebuilding our manufacturing base while saving consumers money on their energy bills; and saving the planet. It certainly sounds a heck of a lot cheerier than the alternative. And it makes sense that to genuinely restart the American jobs engine, you’re going to need something really big. Here’s University of Texas economist James Galbraith putting today’s need in historical perspective: The illusion of stimulus was that the economy would “return to normal” with a little “fiscal boost.” The reality is that having exhausted (however imperfectly) the 1940s agenda of middle-class housing, the 1950s highways agenda, the 1960s health-care agenda and the 1990s information-technology bubble, the economy needs a new strategic direction. The clear and pressing priorities are energy and climate change. To address these challenges is a grand task, requiring decades of research, careful planning and many investments, if we are to pass on a livable planet and a decent living standard. Institutionally it will require new lending agencies to assure that the funds needed are available over the long term. And the work can provide jobs for millions, for many years. In a major report issued last year, John Podesta and colleagues at the Center for American Progress described the characteristics of a clean energy economy . Among its attractive qualities, it promises to revive the American middle class: Solving global warming means investment. Retooling the energy systems that fuel our economy will involve rebuilding our nation’s infrastructure. We will create millions of middle-class jobs along the way, revitalize our manufacturing sector, increase American competitiveness, reduce our dependence on oil, and boost technological innovation. These investments in the foundation of our economy can also provide an opportunity for more broadly shared prosperity through better training, stronger local economies, and new career ladders into the middle class. Reducing greenhouse gas pollution is critical to solving global warming, but it is only one part of the work ahead. Building a robust economy that grows more vibrant as we move beyond the Carbon Age is the greater and more inspiring challenge. Famed venture capitalist John Doerr is an evangelist for clean energy and one of seven business leaders (also including Bill Gates and Jeff Immelt) who make up the American Energy Innovation Council (AEIC). That group is calling for “both robust, public investments in innovative energy technologies as well as policy reforms to deploy these technologies on a large scale.” Here’s how Doerr explains the group’s thinking : Well, today, we are in a worldwide race for the next great global industry. And I believe, and my partners believe, the president and members of Congress believe that is the new clean-energy technologies…. [I]f you look at the top 30 companies around the world in new clean energy — that’s the top 10 in wind, the top 10 in solar, and the top 10 in advanced batteries, the sort that would power our electric vehicles — only four of those 30 are American companies. If I compare that to the Internet, it’s — it’s as if, gosh, Microsoft and Apple and Google and Intel and Yahoo! were all companies headquartered in Europe or Asia, and only Amazon was a company here in the United States. So, we have got to make choices, make decisions now about whether we want to be making our own energy future with American jobs, or if we want to be buying that future from China and other countries around the world. There are many different paths to a green jobs future. The AEIC’s plan, for instance, calls for $16 billion in annual federal government investment in clean energy innovation. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) is still pushing for a “Green Bank,” at a cost of $10 billion a year, that would facilitate “significant and sustained investment” in new clean-energy technologies. (Bingaman, however, will be lucky if he can win passage of his bipartisan Renewable Energy Standard bill , written with Republican Senator Sam Brownback of Kansas, which would require utilities to get 15 percent of their power from renewable energy sources like wind and solar by 2021.) So what may be the last, best hope for major federal clean-energy investment is a retooled green bank proposal that former FCC chairman Reed Hundt is pushing . Bowing to the political realities — that, as he puts it, “Congress won’t appropriate any money now for any cause, no matter how worthy” and that unemployment is a more urgent priority than clean energy — Hundt is advocating a nonprofit Energy Independence Trust (EIT) that he bills as a massive jobs generator, and that he says would not require appropriations because it would just be borrowing money from the Treasury. At the core of the proposal is Hundt’s embrace of one of the many facts that deficit hawks try to ignore: that despite concerns that high deficits will force the U.S. to increase interest rates, the Treasury is currently able to borrow money — i.e. sell Treasury bills — at stunningly low rates . “You want to take the astoundingly low interest rates that the government has to pay to borrow money, and you want to transfer that to the degree possible to productive, revenue-producing businesses,” Hundt told HuffPost. “There’s a huge unmet need for productive new investment, but the only way to really prime the pump is to put in really cheap capital.” The investments Hundt is talking about, however, need to generate returns. “You want to build toll roads, not roads; dams that produce electricity, where you get paid back after a long period of time; electric transmission lines, where the revenue comes in from carrying the electricity; wind farms, where the revenue comes in from selling the electricity.” The Treasury would sell securities at very low interest, lend the money at cost to the EIT, and the EIT would then turn around and lend it to private investors. Hundt calls this “really, really, low, wonderfully low, cheap capital for investors who will build these clean energy systems.” And everyone would eventually get paid back. “It’s really pretty simple. In fact, it’s what China does,” Hundt said. “And in fact China has used low-cost lending to stimulate about twice as much clean energy investing as we have in the United States.” But how many jobs would this create? “Roughly speaking, $1 billion in capital is 10,000 direct jobs and about 50,000 indirect jobs,” Hundt said. “So one way to do it is say: How many jobs to you want? “So if you tell me you want a million jobs, then I need $100 billion of investment, which means that I need probably about $30 billion of cheap capital, because the rest would come from other forms of capital.” Meanwhile, that $100 billlion would buy an awful lot of clean power. “Everyone knows that we need to build a clean energy system to replace a dirty energy system,” Hundt said. The plan also allows for private industry and the states to be the decisionmakers. “I don’t believe that we need some kind of federal, national comprehensive, Washington-dictated solution. Electricity is a very local business,” Hundt said. “But I do believe if we said to all the states and all the businesses: Here’s a once-in-a-lifetime opportunity for very cheap capital… then we would be opening the door to a variety of technological solutions that would be selected on the local level…. “If you want to rebuild the country, this is a golden opportunity.” ************************* NEXT IN THE AMERICA NEEDS JOBS SERIES: A Shorter Work Week (Want to learn more about the series? Read the overview . Got an idea you think we may have overlooked? Email froomkin@huffingtonpost.com . ) ************************* Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail , bookmark his page ; subscribe to RSS feed , follow him on Twitter , friend him on Facebook , and/or become a fan and get e-mail alerts when he writes.

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Dan Smith: Better Transportation Investment Creates More Jobs

September 16, 2010

With almost one in ten American workers currently unemployed, smart investment in infrastructure is an efficient way to create jobs right now. The job creation potential of infrastructure has been well-documented. Economists Mark Zandi and Alan Blinder, for example, explain in a report they coauthored that every dollar spent on infrastructure yields $1.57 in economic growth. To generate the most jobs, every study has shown that it is important to prioritize investments in public transportation. Academic analysis concludes that public transit generates 31 percent more jobs per billion dollars invested than similar spending on highways. Models developed with the Federal Highway Administration likewise show transit investments generate 19 percent more jobs. Similarly, an analysis of U.S. Department of Transportation data shows that 2008 stimulus dollars spent on public transportation projects created up to twice as many jobs as highway spending for the same amount of money. The consistent finding is clear: to create jobs, invest in public transportation. For spending on highways, it is important that money be directed to repair and maintenance rather than the construction of new highways. Too many roads and bridges across America remain in a state of disrepair that pose dangers and cause costly delays. Although investment in highway repair does not create as many jobs as public transit, it creates 9 percent more jobs per billion dollars than building new highway miles, according to the same studies. Additionally, the long-term development of a national high-speed rail network could be critical to rebuilding America’s declining manufacturing sector. Auto factories that were shut down during the last decade could be reopened and repurposed to manufacture the new railcars and bullet trains of the future. Better Transportation Investment Reduces our Dependence on Oil Our transportation system consumes more oil than the entire economy of any other country in the world, other than China, according to Department of Energy data. The disastrous consequences of our oil addiction were on full display last spring when billions of gallons of oil spilled into the Gulf. Our over-reliance on oil is also a national security concern, as it forces our nation to rely on foreign regimes which are often hostile or unstable. Investing in more and better public transportation is critical to reducing America’s oil dependence because it provides more energy-efficient ways to travel. Existing public transit reduced the amount of gasoline America used in 2006 by 3.4 billion gallons, according to an analysis of EPA data. The U.S. PIRG Education Fund calculated that this saved us over $9 billion in gas costs. Not surprisingly, metropolitan areas with better public transit systems accounted for most of these oil savings. To partially pay for the proposed investment, President Obama rightly calls for cutting government subsidies for oil companies. There is no reason why corporations, like Exxon-Mobil and BP, that make billions in profits should receive public handouts and tax subsidies. These unnecessary tax breaks and subsidies should be eliminated, and the savings should be used to pay for cleaner, more efficient transportation projects. Better Transportation Investment Reduces Congestion and Pollution In addition to creating jobs and reducing our oil dependence, investment in public transportation and high-speed rail would reduce traffic congestion and global-warming pollution. For instance, the Texas Transportation Institute’s 2007 Annual Urban Mobility Report calculated that public transit prevented over 500 million hours of delays in 2005, saving the country more than $10 billion. Also, our transportation system accounts for a full third of the country’s global warming pollution. The U.S. PIRG Education Fund calculated that public transit reduced emissions of harmful global warming pollution by 26 million metric tons in 2006. That is equivalent to taking almost 5 million cars off the road. Better Transportation Investment Means Less Earmarks, and More Results In addition to providing much needed funding for more public transportation, President Obama’s plan seeks to spend our transportation dollars more efficiently. Over 100 federal programs would be consolidated under the proposal, similar to a 2009 proposal by U.S. House Transportation and Infrastructure Committee Chairman James Oberstar. President Obama also proposes to allocate money based on performance, rather than earmark-driven politics. Such reforms are essential to ensuring that we get the biggest bang for our buck. With the economic recovery slow to pick up steam, President Obama’s call for a new transportation bill is a timely opportunity to spur job growth now while making crucial investments in America’s future. We strongly encourage you to write an editorial urging Congress to move forward with President Obama’s proposal for comprehensive reform and the reauthorization of the surface transportation bill.

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Marshall Goldsmith: What Is the Truth About Leadership? (Part 1 of 2)

September 7, 2010

My good friends Jim Kouzes and Barry Posner, best known for the classic, award-winning book, The Leadership Challenge , have written a new book called The Truth About Leadership . Recently I had the opportunity to catch up with Jim about his and Barry’s new book. Following is part one of the fascinating discussion I had with Jim recently during a conference he was giving in San Diego. MG: What will fans of T he Leadership Challenge find in The Truth about Leadership that may surprise them? JK: We’ve been traveling the world for three decades now, constantly researching the practices of exemplary leadership and the qualities people look for and admire in the leaders they would willingly follow. During and after our seminars and presentations, people ask us a lot of different questions, but there’s always one thing that they all want to know: “What’s new?” They want to know how things are different now compared to how they were five, ten, twenty, or thirty years ago. So we tell them. We tell them how the context of leadership has changed dramatically since we first asked people in the early 1980s to tell us about their personal best leadership experiences and about their most admired leaders. For example, we talk about how global terrorism has heightened uncertainty as political landscapes have changed. How global warming and scarcity of natural resources have made regions of the world unstable and created the need for more sustainable products and lifestyles. How the global economy has increased marketplace competition in the neighborhood and around the world and how financial institutions have exploded, imploded, and risen like Phoenixes from the ashes. How the always-on, 24/7, click-away new technologies have both connected and isolated people, as their capacity for speed cranks up the world’s pace. But we also tell our audiences something else, which usually surprises at least a few people. We tell them that as much as the context of leadership has changed, the content of leadership has not changed much at all. The fundamental behaviors, actions, and practices of leaders have remained essentially the same since we first began researching and writing about leadership over three decades ago. Much has changed, but there’s a whole lot more that’s stayed the same. We thought it was as important in these changing times to remind people of what endures as it was to talk about what has been disrupted. This is not idle theorizing on our part. We wanted to make certain that the lessons we included in The Truth about Leadership not only withstood the test of time but also withstood the scrutiny of statistics. So we sifted through the reams of data that had piled up over three decades and isolated those nuggets that were soundly supported by the numbers. This is a collection of the real thing–no fads, no myths, and no trendy responses–just truths that endure. MG: Do you still believe that effective leadership can be taught? JK: Let’s get something straight. Leadership is not preordained. It is not a gene, and it is not a trait. There is no hard evidence to support any assertion that leadership is imprinted in the DNA of only some individuals and that the rest of us missed out and are doomed to be clueless. The truth is that the best leaders are the best learners. Leadership can be learned. It is an observable pattern of practices and behaviors, and a definable set of skills and abilities. Skills can be learned, and when we track the progress of people who participate in leadership development programs, we observe that they improve over time. They learn to be better leaders as long as they engage in activities that help them learn how. Learning is the master skill of leadership, and our studies demonstrate that the more leaders engage in learning the better they become at leading. But here’s the rub. While leadership can be learned, not everyone learns it, and not all those who learn leadership master it. Why? Because to master leadership you have to have a strong desire to excel, you have to believe strongly that you can learn new skills and abilities, and you have to be willing to devote yourself to continuous learning and deliberate practice. No matter how good you are you can always get better. You have to have a passion for learning in order to become the best leader you can be. You have to be willing to put in the hours of daily practice over a period of years–the rest of your life, really. You have to be open to new experiences and open to honestly examining how you and others perform, especially under conditions of uncertainty. You have to be willing to quickly learn from your failures as well as your successes and to find ways to try out new behaviors without hesitation. You won’t always do things perfectly, but you will get the chance to grow. MG: Which of the ten time-tested truths do you personally think is the hardest to follow? JK: The hardest leadership practice to master is also the one that differentiates leaders from individual contributors. The truth is that focusing on the future sets leaders apart. The capacity to imagine and articulate exciting future possibilities is the defining competence of leaders. And, our data tells us that this is the most difficult set of skills to learn. Developing the capacity to envision the future requires you to spend more time in the future–meaning more time reflecting on the future, more time reading about the future, and more time talking to others about the future. It’s not an easy assignment, but it is an absolutely necessary one. It also requires you to reflect back on your past to discover the themes that really engage you and excite you. And it means thinking about the kind of legacy you want to leave and the contributions you want to make. None of this can be done by a pessimist. You must remain optimistic and hopeful about what is yet to come. You must truly believe that the future will be brighter and be confident that we’ll all get there together. A positive difference can only be made by a positive leader. MG: Explain the role of character in leadership? JK: The truth is that credibility is the foundation of leadership. This is the inescapable conclusion we’ve come to after thirty years of asking people around the world what they look for and admire in a leader, someone whose direction they would willingly follow. The key word here is “willingly.” It’s one thing to follow someone because you think you have to “or else,” and it’s another when you follow a leader because you want to. What does it take to be the kind of person, the kind of leader, whom others want to follow, doing so enthusiastically and voluntarily? It turns out that the believability of the leader determines whether people will willingly give more of their time, talent, energy, experience, intelligence, creativity, and support. Only credible leaders earn commitment, and only commitment builds and regenerates great organizations and communities. A leader’s credibility makes the difference between being an effective leader and being an ineffective one. Credibility determines whether others want to follow you or not. It determines how loyal they will be, how committed they will be, how much energy they will put into the cause, and how productive they will be. And the effect of personal integrity of leaders goes far beyond employee attitudes. It also influences customer and investor loyalty. People are just more likely to stick with you when they know they are dealing with a credible person and a credible institution. In business, and in life, if people don’t believe in you, they won’t stand by you.

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Jeffrey Rubin: Blame It On Sunspots

August 17, 2010

It’s a good thing we don’t care about carbon emissions. Otherwise we might be more than a little concerned when the Petermann Glacier in Greenland calves off a chunk of ice several times the size of the island of Manhattan. Or when record-breaking, scorching summer temperatures and prolonged drought have turned Russia’s parched boreal forest into a giant tinderbox, sending Moscow residents scurrying indoors to avoid the suffocating smoke and reducing the country’s wheat harvest by a third. Or when the worst monsoon rains in 80 years in Pakistan have caused unprecedented flooding and devastation in the country, leaving millions stranded. It might have been fun exposing overzealous claims about the imminent demise of the Himalayan glaciers, but it seems no one is laughing about global climate change now. And with good reason. According to a recently released study by NOAA (the National Oceanic and Atmospheric Administration), during the first six months of 2010, the combined ocean and land temperature was the hottest on record. This summer is continuing the record-setting trend. And just in case you thought this year might be an anomaly, the warming trend so far is consistent with what NOAA has found over the last decade across no less than 10 measures of global warming, running the gambit from land and sea temperatures to the decline in Arctic sea ice. Every year seems to furnish us with more and more graphic images of global climate change. And yet, other than the temporary reprieve we got during the world’s deepest post-war recession, there seems to be no let-up in the growth of global carbon emissions. Of course as long as emissions don’t cost anybody anything, why would we expect any halt in emissions growth? After all, the engine of global economic growth still runs on burning coal and oil. And we’re certainly no closer to putting a price on carbon emissions today than we were before the much-anticipated global environmental summit in Copenhagen last December. With most emerging market economies dreaming of emulating China’s carbon-spewing industrialization, don’t expect any multilateral breakthroughs on global carbon management anytime soon. Nor should we, given the huge disparities in energy consumption per capita between the developed and the developing worlds. But at the same time, we are no closer to seeing any unilateral steps to price carbon on the part of wealthy emitters like North America, for example. Carbon legislation is effectively dead-ended in Congress with the Waxman-Markey bill unable to pass in the Senate, while legislation isn’t even on the drawing board with the Canadian federal government. Like China, North America fears huge adverse economic consequences from pricing the carbon it emits into the atmosphere. As a result, carbon emissions continue to pose no cost to our economy. Unfortunately, it’s becoming harder and harder to say the same about climate change.

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Don Tapscott: We Need World-Wide Corporate Reporting Standards

August 11, 2010

It was many years ago that I first heard the optimistic adage, “you do well by doing good.” Back then, advocates of so-called Corporate Social Responsibility were trying to make a business case for good corporate behavior. Few were persuaded. The main reason for lack of success in winning support for the “being good,” is that the adage was not true. Many companies did well by being bad. Creative accounting, unfair labor practices, corporate secrecy, monopolistic behaviors, externalizing costs, and shady environmental behaviors could help beef up the bottom line. Not to mention that corporate executives themselves could “do well” by paying astronomical bonuses, even while their companies were struggling. But the collapse of the financial systems and the global economic crisis of 2009 were a wakeup call to the world. It’s become clear that business can’t succeed in a world that is failing. And the world has never faced greater challenges: Over-consumption of limited natural resources, the threat of global warming, and the need to provide clean water, food and a better standard of living for a growing global population. Decisions taken in tackling these issues need to be based on clear and comprehensive information, something which seems self-evident but there was no world-wide agreement on just what that information should look like. A coalition of representatives from around the world from major corporations, the Big Four auditors: PwC, Deloitte, Ernst & Young and KPMG, securities agencies, regulatory bodies, non-governmental organizations and standard-setting sectors have studied the issue. The group’s recommendation is the formulation of the International Integrated Reporting Committee (IIRC). Currently, publicly listed companies must file an annual report. These reports follow either the U.S. Generally Accepted Accounting Principles (U.S. GAAP) or the International Financial Reporting Standards (IFRS). Increasingly companies are also voluntarily producing corporate social responsibility or sustainability reports. But the relevance and quality of the information is all over the map. Some companies issue a two-paragraph statement while others produce weighty tomes. There is no global standard for measuring and reporting on environmental, social and governance performance. “To make our economy sustainable we have to relearn everything we have learnt from the past. That means making more from less and ensuring that governance, strategy and sustainability are inseparable” said Professor Mervyn King, Chairman of the Global Reporting Initiative. “Integrated Reporting builds on the practice of financial reporting, and environmental, social and governance — or ESG — reporting, and equips companies to strategically manage their operations, brand and reputation to stakeholders and be better prepared to manage any risk that may compromise the long-term sustainability of the business.” The IIRC wants a globally accepted framework that brings together financial, environmental, social and governance information in a clear, consistent and comparable format. The objectives for the framework are to: a) support the information needs of long-term investors, by showing the broader and longer-term consequences of decision-making; b) reflect the interconnections between environmental, social, governance and financial factors in decisions that affect long-term performance and condition, making clear the link between sustainability and economic value; c) provide the necessary framework for environmental and social factors to be taken into account systematically in reporting and decision-making; d) rebalance performance metrics away from an undue emphasis on short-term financial performance; and e) bring reporting closer to the information used by management to run the business on a day-to-day basis. In my mind, the creation of the IIRC is another manifestation of an old force with new power that is rising in business, one that has far-reaching implications for most everyone. Nascent for half a century, this force has quietly gained momentum through the last decade and is now triggering profound changes across the corporate world. Evidence suggests firms that embrace this force and harness its power will thrive. Those who ignore or oppose it will suffer. The force is transparency. Globalization, instant communications, organized civil society — and now a crisis in trust, have changed the rules of the game. Firms are being held to complex and changing sets of standards — from unrelenting webs of “stakeholders” who pass judgment on corporate behavior — to regulations, new and old, that govern and often complicate everyday activities. In an ultra-transparent world of instant communications, every step and misstep is subject to scrutiny. And every company with a brand or reputation to protect is vulnerable. Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge with one another. Powerful institutional investors today own or manage most wealth, and they are developing x-ray vision. Finally, in a world of instant communications, whistleblowers, inquisitive media, and Googling, citizens and communities routinely put firms under the microscope. I’ve produced a few “studies in bad timing” in my life. One stellar example was a book I co-authored with the brilliant business strategist David Ticoll — The Naked Corporation: How the Age of Transparency Will Revolutionize Business . As people researching how technology changes things, we became interested in how the Internet would change the use and communication of information. We defined transparency as “access to pertinent information by stakeholders.” By “pertinent,” we meant information that can help if you have it and hurt if you don’t. It’s been almost a decade since the book hit the streets. We argued that the corporation is becoming naked, and as a result will have no choice but to rethink values and behaviors — for the better. Our tag line was “you’re going to be naked, so you’d better be buff!” Reviewers either loved the book or hated it. Sales were modest. My deepest regret, in hindsight, was that clearly the book was not read and heeded by the leaders of our financial services industries. Lacking “fitness” they brought down the industry and with it the global economy. To paraphrase Victor Hugo, there is nothing so powerful as an idea whose time has come — again. To build trusting relationships and succeed in a transparent economy, growing numbers of firms in all parts of the globe are being forced to behave more responsibly than ever. Disgraced banks represent the old model — a dying breed. I say good riddance. Business integrity is on the rise, not just for legal or purely ethical reasons but because it makes economic sense. Companies need to do good — act with integrity — not just to secure a healthy business environment, but for their own sustainability and competitive advantage. Firms with ethical values, openness, and candor have discovered that they can be more competitive and profitable. Further, today’s winners increasingly undress for success. Our research suggests that open corporations perform better. Transparency is a new form of power, which pays off when harnessed. Rather than to be feared, transparency is becoming central to business success. Rather than be stripped unwillingly, smart firms are choosing to be open. Over time, what we call open enterprises — firms that operate with candor, integrity, and engagement — are most likely to survive and thrive. And any bank executives who think they can return to the old ways are mistaken. In the new business environment firms will do well by doing good.

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Bill Singer: Modern-Day Regulation: The Big Broom After the Circus Parade Passes

July 2, 2010

I watched with disgust the ravages of Hurricane Katrina. A city and region were devastated first by a storm and then victimized by a lack of preparation and response. Those in charge of the emergency response seemed little more than political hacks and friends of friends in high places. Clearly, the Gulf Coast region would learn some lessons. Now, amidst the BP oil leak — a calamity of epic proportion — the most charitable characterization of the so-called emergency response is that it is a deer caught in the headlights. You would think that there were some contingency plans on some shelf for this event. You know, maybe someone contemplated that another hurricane could topple an oil rig? Instead, in many ways, we are seeing a redux of the failed response to Katrina. In a time of crisis , those who should have drawn up earlier contingency plans are only now first setting up shop. You just get that sinking feeling in the pit of your stomach that everything is ad hoc . Of course, what has been thought out and thought through is how to best spin the bad news. Oh, no doubt about it — private enterprise and government always seem to have that knack for self-preservation. If I see one more self-serving television ad from BP, if I see one more politician in socks and shoes walking on the beach with his shirtsleeves rolled up, I’m going to throw my television remote through my screen. Don’t these idiots get it? Disasters are not wonderful opportunities for a photo-op! Having set in motion the causes of this ecological disaster, BP wants me to thank them for giving folks shovels to clean the beaches? Having failed to timely respond to the leak with an effective containment plan, government officials want me to applaud their televised hearings? I am not a fan of the time-wastin’ speechifyin’, masturbatory roundtablin’, and high-fallutin’ blue-ribbon panels that enervate our government. Sadly, we are saddled with legislators and regulators who belatedly cobble together ineffective solutions for yesterday’s problems, or opt for abject inaction that paves the way for tomorrow’s crises. In the end, we get neither an ounce of prevention nor a pound of cure. E Pluribus Unum has been replaced with Too Little, Too Late . Among the worst examples of institutionalized procrastination is the United States Securities and Exchange Commission (SEC). More often than not, my commentaries about the SEC are filled with pointed barbs — sharpened from frustration with the federal regulator’s inability to do its job. Consider my May 2010 blog: LOST: One Securities and Exchange Commission Regulatory Priority . We live in a world of limited resources and we are creatures with a limited time on this planet. We cannot do all things within in our limited lifespans — hence we need to have a sense of both history and a concern for the future. Professional regulators must always be aware of that ticking clock. Among the most difficult challenges facing them is knowing their priorities and allocating the most effective use of their dollars and staff towards preventing fraud and promulgating prophylactic rules. In this day and age, no one should be nominated to the SEC or any regulatory organization if that man or woman doesn’t have their priorities in mind and in order — and each candidate should be vetted on that point. Similarly, for the SEC to announce that it’s unsure of its priorities and needs to form some committee to figure out what’s important and what should be first, smacks of a gross lack of leadership and vision. Sadly, the legacy of the SEC is that too many Madoff-like schemes have flourished while the various commissioners seemed distracted by choosing china patterns. A harsh condemnation, but one that I believe is deserved. Effective leadership sets goals and makes choices. Too often, the SEC delves into the world of metaphysics and foolishly diverts its resources from meaningful prevention and enforcement towards efforts that seem solely calculated to pander to the public. A recent example of such silliness was the sideshow concerning global warming . Not only would the SEC not acknowledge that there was or wasn’t global warming (or climate change, if you prefer), but it wasted countless hours of staff time preparing a report and voting on new regulations. While the SEC’s attention was diverted to posturing over global warming, the “Flash Crash” overwhelmed Wall Street and, as usual, the federal regulator didn’t know what had happened and had no effective contingency plans with which to respond. The result was that Wall Street’s cop was forced to bring out the broom after the circus parade passed us by. The one saving grace of that incident was that the SEC actually moved quickly to institute single-stock circuit breaks, for which I complimented the regulator . On June 30, 2010, during an open meeting of the SEC, Commissioner Luis A. Aguilar gave a speech titled: ” Preventing Investor Harm Should be SEC Priority Number One .” It was with some surprise that I read Commissioner Aguilar’s comments because he offered a superb description of what constitutes effective regulation. Now, if only the astute commissioner could transform his vision into action, and drag his colleagues into the 21st Century! I commend his words to you: Regulatory oversight functions best when we have a regulatory regime that prevents misconduct in the first instance — long before investors can be harmed. If the conduct is not affirmatively prevented, investors are harmed. It’s true that once investors are harmed and lose faith in the integrity of our institutions — irreversible damage has taken place. Enforcement actions are rarely, if ever, able to make investors whole, sufficiently punish all the fraudsters, and prevent a loss of investor trust in these financial institutions and the securities industry as a whole. The best course of action is to prevent the significant harm in the first place. Prophylactic rules, consistent and effective inspections, and strong enforcement must work together to protect investors. Read Commissioner Aguilar’s Entire Speech at: http://sec.gov/news/speech/2010/spch063010laa.htm

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Caroline Myss: Mother Nature Has Politically Come of Age

June 7, 2010

Continually in the backrooms of the power centers of the nations on this planet are information hubs stocked with people whose job it is to be “star gazers”. These “star gazers” are not astrologers as such; rather, they have their own more sophisticated methods of doing the same thing, more or less, which is they are in the business of predictions. Their job is to anticipate trends and movements in the marketplace, in other governments, in changing weather patterns and how that might effect crop cycles, in potential mega corporate mergers, in all forms of the brokerage of power. Financial and political power centers love this futuristic data. It converts to potential hedge fund activity, potential political moves, and potential mergers – in short, the management of potential power in all its expressions. I recall reading a book way back when entitled, “A Global Report Until the Year 2000″, that was initiated by then President Jimmy Carter, which was filled with exactly this type of data — predictions and anticipations of potential major changes in the theater of operations of Planet Earth. One of the conclusions that struck me in this book that I read decades ago related to the potential causes that might lead to global conflict: water rights. For all the many issues that faced the world then, and there were many, still, by comparison, terrorism had yet to come into its own and world markets had yet to become as fragile as my mother’s crystal. Nonetheless, one of the central themes of this report was that by the end of the 20th Century, the most likely cause of a global conflict would be over a lack of fresh water — an impending ecological disaster. As I look over the past decade of America’s history, without a doubt four of the most formative events that the “star gazers” did not see coming, no matter how sophisticated their mathematical formulas and calculations of probabilities and possibilities, were: 9/11, Hurricane Katrina, the subprime mortgage disaster, and now the oil catastrophe in the Gulf of Mexico. Of these four, two are environmental, which is to say, enterprises of Mother Nature. Obviously, the Gulf oil leak is the result of the carelessness of human technology brought about by deregulated safety procedures, just as the devastation brought about by Katrina was far greater than it had to be because of the carelessness of not repairing levees that should have been updated. But the lack of preparedness for a major catastrophe is itself a statement of how British Petroleum and other oil companies view environmental disasters: it’s not the environment that is at risk but the loss of oil dollars. The environment for hardcore oil profiteers is just a place from which to “drill, baby, drill.” It’s not an alive ecosystem of which they, also, are an integral part. Had BP really valued and respected the environment, it would have prepared far more safe guards on its oil platform, and at the very least, disaster plans that parallel every action they undertake in drilling. Had the government cared about the environment, regulations demanding better safety procedures would have been in place. One could say, perhaps, that this is a type of cooperative disaster – one that was initiated by the carelessness of business and government but it’s Mother Nature that is revealing to everyone what the cost to everyone and everything is when her eco-system is so blatantly treated with disrespect. But this disaster does not just reveal how BP interacts with nature. I suspect that BP is no different than any other oil company. They are, after all, in the business of sucking the oil out of the earth at any cost — and now cost us all it will. Anticipating the actual cost of this disaster is virtually impossible because there is no end in sight to this leak. And now the brain trusts that got us into this disaster have even suggested the use of nuclear weapons to get us out – nuke the leak. Right. Hmm. Seems to me that would be the same as a physician offering to shoot the cancer growing in a patient because the chemo wasn’t working as planned. Brilliant, BP… Hurricane season has yet to begin and who knows how many hurricanes the Gulf will have, how intense they will be, and how far the winds and rain will distribute the toxic oil that now covers the once gorgeous waters of the inland areas around the Gulf. If we follow this latest hair brained plan, not only will we have to anticipate oil covering miles and miles of inland territory; now we will also have to worry about water contaminated with nuclear waste. This is a genius solution in the making. Even if they tossed out this suggestion by now, the fact that it would even be placed on the table for consideration is a measure of their detachment from “ecological reality”, not to mention their responsibilities as a company that drills for oil in gulf waters. Then there’s the loss of sea life which is yet another incalculable figure. And of course, we have the drop in value to coastal property and a dramatic drop in the coastal vacation industry. And I haven’t even mentioned the fishing industry – do I even have to? The Gulf is headed toward becoming a mortuary. And finally, we can only wait to see how sick the people will become who are now forced to breath the fumes from all of this unrefined oil, with all its toxins and gas. It was only a matter of time before the Republican’s began to call this “Obama’s Katrina”. That’s not surprising. While Obama is hardly responsible for the loose regulations that allowed for the possibility of accidents on oil rigs, he is the President in the hot seat. It’s now up to him to respond to this situation both in terms of demanding the most out of BP and future legislation that insures such a disaster can never happen again. He is also no doubt aware that Katrina was indeed a turning point for Bush in that respect for his administration — what little there was left to respect by the time Katrina hit — took a sharp nose dive, never to repair itself. Further, while the nation refused to evaluate Bush’s incompetence as a war leader, his inability to lead when it came to a natural disaster crisis on the home front was just too obvious. Staring at the ruins of New Orleans from his safe, clean little airplane, like a little boy on a carnival ride, revealed to all Americans that this former President should never have been allowed near the White House except as a tourist. While he knew how to start a crisis, he had no idea how to assist in a crisis unless he could bomb it, threaten it, or misspell it. In the end, the legacy of George Bush was greatly influence by the disasters of war and the power of Mother Nature. Even Obama must realize that like the presidency of George Bush, this crisis has the potential of becoming a political game changer for him if a successful outcome is too long in coming or worse, nowhere to be found. It’s just that one extra disaster added to a list of disasters breaking the back of America that has what it takes to reshape the destiny of this president, and thus this nation. If any of those hired “star gazers” had any real vision at this point, they would get the picture that Mother Nature has what it takes to swing an election, to influence politics, to do great damage to the economy, and to call the shots on what a country does next in terms of its own survival. Mother Nature is not some passive hunk of earth to be dynamited for resources and left to repair itself for the next round. The Katrina disaster revealed that Mother Earth has enough clout to influence a national election and for that reason alone, even the most ecologically heathen of politicians who cannot imagine that global warming is anything but hype should yield to the fear of losing votes. Let’s face it: Mother Nature has politically come of age. We are only at the beginning of this Gulf oil crisis — just the beginning. If the idiots who suggested that the underwater leak be nuked in order to seal it actually get their way, the crisis will catapult to a mega-disaster and who knows how long it will take to recover from a nuked oil spill. It is all too apparent that the time has come for environmentalists to be recognized as power brokers on this planet, spokespeople for the force and voice of nature. The days of treating environmentalists as if they were “liberals” or supporters of Al Gore or people who lacked the scientific wherewithal to know what they are talking about is over. That hype is pure greed talking. A well-educated environmental scientist is exactly that – a scientist. Environmentalists (not on the pay roll of any oil company or any special interests groups) need to sit at Global Summits and at meetings at which major environmental policies are formed that affect the quality of life locally, nationally, and globally. The argument of financial impracticability no longer stands as valid given the Gulf oil crisis. Nothing is more financially impracticable than a disaster that could have and in fact, should have, been prevented. The argument that environmentalists are imagining the potential harm of off shore drilling or, say, global warming — that, too, is off that table. The offshore drilling catastrophe has now happened, suggesting that the warnings of environmentalists are not laden with emotional hysteria. They are the result of research and a bit of wisdom. With any luck, we might be able to prevent a global warming catastrophe. And if any politicians can’t handle warming up to Mother Nature as a type of “living” force worth protecting, then they should simply tell themselves that becoming an environmentalist is likely to improve their chances of getting re-elected these days. That should make even the most hard-core anti-environmentalist among them a treehugger.

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Obama Says Oil Company Tax Breaks Must Be Rolled Back in Wake of BP Spill

June 2, 2010

By Kate Andersen Brower June 2 (Bloomberg) — President Barack Obama said the Gulf of Mexico oil spill should send an urgent signal to Congress to complete work on energy legislation, including rolling back “billions of dollars in tax breaks” for oil companies and fostering investments in alternatives to fossil fuels. “The catastrophe unfolding in the Gulf right now may prove to be the result of human error — or corporations taking dangerous short cuts that compromise safety,” Obama said in a speech prepared for delivery in Pittsburgh today. “But we have to acknowledge that there are inherent risks to drilling four miles beneath the surface of the Earth.” The spill began after an April 20 explosion aboard the Deepwater Horizon rig, which London-based BP Plc leases from Switzerland’s Transocean Ltd. The blast killed 11 and triggered leaks that, according to a government panel, spew an estimated 12,000 barrels to 19,000 barrels of oil a day into the ocean. In his prepared remarks, Obama called for an ‘unprecedented effort” to develop clean energy and renewed his call for Congress to approve legislation imposing a cap and trade system that would place a ceiling on carbon emissions and let companies swap permits to release greenhouse gases. “The only way the transition to clean energy will succeed is if the private sector is fully invested in this future — if capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed,” he said in the speech excerpts released by the White House. “And the only way to do that is by finally putting a price on carbon pollution.” Global Warming Legislation that would put a price on carbon dioxide emissions blamed for global warming has stalled in the Senate. A climate-change bill introduced last month by Senator John Kerry , a Massachusetts Democrat, lacks the bipartisan support it would need to pass. The House of Representatives approved legislation to limit greenhouse-gas pollution last year. In his prepared remarks at Carnegie Mellon University , Obama signaled he is assigning energy legislation a higher priority than immigration overhaul. The president said he may lack the votes in the Senate to pass an energy bill, and then added: “But I intend to find them in the coming months.” Obama hasn’t set such a firm timeline for Congress to act on immigration legislation. Obama also criticized Republicans for opposing his efforts to increase employment, improve health care and regulate Wall Street. Government’s Role Republicans believe government has “little or no role to play” in solving the nation’s economic problems, he said. The Republican agenda “basically offers two answers to every problem we face: more tax breaks for the wealthy and fewer rules for corporations.” Those policies were proven failures over the past decade, Obama said. “Now we have a choice as a nation. We can return to the failed economic policies of the past, or we can keep building a stronger future,” he said. “We can go backward, or we can keep moving forward. I don’t know about you, but I want to move forward.” To contact the reporter on this story: Kate Andersen Brower in Pittsburgh at Kandersen7@bloomberg.net

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Gilbert B. Kaplan: The Manufacturing Sector as Sacrificial Lamb

May 27, 2010

The outcome of today’s Security and Economic Dialogue (S & ED) talks in Beijing is discouraging for those of us who want to see an immediate effect on Main Street. No specific movement has taken place on currency issues. China’s President Hu says he will take action on currency, but he doesn’t say what action he will take or when he will take it. China’s currency is undervalued by about 40%. It is unlikely that anything he is even contemplating would close that gap. And while we wait for him to make up his mind, more jobs in the U. S. will be lost to China. The United States is playing defense everywhere in the world. Militarily we are losing influence and appear to be losing wars. Diplomatically our powers of persuasion are waning. And in international trade, jobs are moving off-shore, we have no sustained manufacturing policy, and the production sectors in other countries’ economies are growing faster than ours. There is certainly a great effort to solve the military and diplomatic problems, but what are we doing on trade? President Obama is aware of the issue, but the solutions are hard to find and are not being articulated. To me, a large part of the problem is that industrial growth in this country, indeed what used to be called industrial policy, takes a second chair to almost every other policy in Washington. The biggest example of that right now is this failure to address currency undervaluation in China, in a forthright and immediate fashion. It has now been years since the problem has been identified. When I served in the United States government, I heard regularly that we could never deal with the Japan trade issues aggressively because we needed our military bases in Japan in order to stand up to the then-Soviet Union. Now we hear we can’t stand up to China because we need their help on Iran and North Korea or on global warming issues. But we can’t keep paying for military and diplomatic victories–assuming we are even achieving these–by trading away our economic prowess. Put simply, the cost is too high and we don’t have enough chips left. As Clyde Prestowitz puts it in his new book, The Betrayal of American Prosperity , “the United States fell into the habit–and the addiction continues today–of making economic concessions in order to obtain geopolitical objectives.” He also notes that the blind adherence to laissez faire economics and trade policy was not the way we became a great power and world technology leader. Indeed, the time when America emerged as a world leader–broadly the beginning through the middle of the twentieth century–was when the U. S. government intervened in the economy and actively supported U. S. manufacturing. Why aren’t we able or willing to do that today? I think the biggest single reason is the failure of the policy community to come up with a sustained and powerful rationale for doing so. There are voices out there calling for this renaissance: Prestowitz, many elected representatives on Capital Hill, Leo Gerard and other union leaders. But for every one of these there are more on the other side, repeating stale mantras calling for more work on the Doha Round, saying we should only talk softly to China while they continue to engage in mercantilist policies, and standing up for a trading system that is not reciprocal. What we need is a renaissance of American production. We need to make things in this country and balance the terms of trade or our future, and even more our children’s future, will be very dim. As a country we will go further in debt and we will not have the productive capacity to work our way out of it. How do we create this renaissance? First, we need to create a sustained policy dialogue that will challenge the current assumptions and develop alternatives. To this end, I plan to sponsor a Conference calling for the revival of American manufacturing which will meet in early fall, bringing together the key players on the issue, companies in the U. S., trade associations concerned about this issue, labor leaders, and policy and legal thinkers. This will be under the rubric of the Committee to Support U. S. Trade Laws, an organization devoted to keeping American trade laws strong, of which I am the President. As part of this effort, we are coming up with new legislation which will strengthen the U. S. trade laws, particularly in the area of ending evasion and fraud. It is amazing that the U. S. has allowed foreign producers to take advantage of weaknesses in enforcement powers under these laws for so long. The conference and our policy analysis needs to lead into 2010 House and Senate elections, and make it clear that, quite simply, we are not going to take it any more. The loss of jobs and manufacturing needs to be an election issue. We cannot walk away from manufacturing and remain any kind of great power in the future. Candidates who support this goal of returning production to the U. S. should be supported by the American electorate. Those who soft pedal it should not. Indeed this was a key issue in the special election in Western Pennsylvania in which Mark Critz was elected to John Murtha’s seat, and where he stood up strongly against the off-shoring of U. S. jobs. Making manufacturing a sacrificial lamb has got to come to an end as part of the 2010 elections.

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BP Capturing 5,000 Barrels a Day From Gulf Leak as Oil Continues to Flow

May 20, 2010

By Jim Polson May 20 (Bloomberg) — BP Plc is capturing 5,000 barrels of oil a day from its leaking well in the Gulf of Mexico. A live video feed from the seafloor showed crude continuing to flow from the well. “That’s 5,000 barrels a day of oil that is not going onto the seabed,” said Mark Salt , a spokesman in Houston for BP. He couldn’t say what proportion of the crude was being captured. “We are continuing to optimize the flow.” The oil being captured is flowing through a mile-long tube up to a drillship equipped to store oil, decant water and flare natural gas. The ship is flaring natural gas from the well at a rate of 15 million cubic feet a day, said Salt. BP, based in London, estimated the daily flow to the ship yesterday at 3,000 barrels of oil and 14 million cubic feet of gas. The company and federal agencies have been estimating the spill rate as 5,000 barrels (210,000 gallons) a day since April 28. That figure is disputed by independent scientists, including Purdue University Associate Professor Steve Wereley, based on video of the leaking well. Scientists including Wereley testified yesterday to a Congressional subcommittee that the leak rate may range between 25,000 barrels and 100,000 barrels a day. “What they are capturing is a small fraction of the total leak,” Wereley said today in a telephone interview. “BP is in a position to provide us with evidence that they are capturing the lion’s share of the leak.” Live Video U.S. Representative Edward Markey , a Massachusetts Democrat and chairman of the Select Committee on Energy Independence and Global Warming, posted what his spokesman said was live video of the leak from BP on his panel’s website. The well is off the coast of Louisiana, about 5,000 feet (1,524 meters) below the water’s surface. It began leaking after an April 20 explosion aboard the Deepwater Horizon drilling rig, which caused it to sink and resulted in the deaths of 11 workers. BP leased the rig from Transocean Ltd. BP rose 5.3 pence, or 1 percent, to 528.8 at 4:35 p.m. in London trading. The shares have fallen 19 percent since the explosion. BP said on May 18 it has spent $625 million on the spill response. Cleanup of oil from the surface continued today, Salt said. There are 1,040 vessels and 24,700 personnel involved in the response, according to a BP statement today. Less Toxic Dispersant To prevent the oil from reaching shore, the company and the government have been using chemical dispersants to break up the oil slick into small droplets that can be digested by microbes. The Environmental Protection Agency today asked BP to find a less toxic dispersant to use on the slick. Oil recovered through the tube to the drillship, Transocean’s Discoverer Enterprise , will be processed at one of BP’s Gulf Coast refineries, Salt said. Piping more oil aboard the drillship may not reduce the extent of oil on the surface, Doug Suttles , chief operating officer for BP exploration and production, said at a press conference in Louisiana yesterday. The leak rate of 5,000 barrels a day “is highly, highly uncertain and not the estimate we’ve based the response on,” he said. BP is focusing on steps to plug the leaking well permanently, Suttles said. Engineers will try as early as May 23 to inject heavy drilling fluid and cement near the top of the well to seal it, a tactic known as “top kill,” he said. Relief Wells The company also is drilling two relief wells, each aimed at intercepting the damaged well about 13,000 feet (3,962 meters) below the ocean floor, an effort that may take about three months. Cement would then be poured into the well to plug it permanently. Heavy oil from the BP well has reached wetlands in the Pass a Loutre area of Plaquemines Parish, Louisiana, Governor Bobby Jindal said at a press conference yesterday in Venice, Louisiana, calling the pollution the most serious yet in nursery areas for fish and shrimp. “These are not tar balls, this is not sheen,” said Jindal, a Republican. “This is heavy oil we are seeing in our wetlands.” To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net .

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Cree LEDs, Ormat Geothermal Power Help Boost Pictet Clean Energy Fund 30%

May 5, 2010

By Randall Hackley May 5 (Bloomberg) — Ask Pictet Clean Energy Fund manager Philippe de Weck where he finds investment value in a world more concerned about the economic recession than reducing emissions and the short answer is in technology pioneers. LEDs, or energy-efficient light-emitting diodes, shine in de Weck’s investment universe as they are “ultimately how we are going to light the world,” he said in an interview at Pictet & Cie’s headquarters in Geneva. “Cree is really at the cutting edge of the LED chip technology.” Cree Inc. , based in Durham, North Carolina, is the fund’s largest holding among LED developers and has more than doubled in the last 12 months as demand grows for lighting that saves on power bills while generating fewer greenhouse-gas emissions. De Weck’s fund has risen 30 percent in the same period, a “respectable” return for a “volatile sector” that beat more than half his peers when adjusted for currency moves, Ben Guest , chief executive officer of the clean-tech investment manager Hazel Capital LLP in London, said in a phone interview. By comparison, the benchmark WilderHill New Energy Global Innovation Index gained 2.3 percent in 12 months, while the SAM Smart Energy Fund advanced 51 percent. De Weck’s performance was held back by Iberdrola Renovables SA , the biggest wind parks owner and his largest holding, which dropped 12 percent. Most clean energy shares have suffered since the United Nations global warming talks stalled in Copenhagen in December and as President Barack Obama ’s administration debates the shape of legislation aimed at cutting U.S. greenhouse gas emissions. Fund Holdings De Weck’s favored holdings for his Luxembourg-based mutual fund, which has about $750 million under management, include Clean Energy Fuels Corp., a Seal Beach, California-based operator of natural-gas fuel stations, and Westport Innovations Inc ., a Vancouver developer of natural gas engine technology. “You can really get bang for your buck in terms of cleaning up the energy supply by moving from coal to gas. Or oil to gas,” said de Weck, who is 36. Emissions can be cut in half combusting gas instead of coal and almost half as well for oil. Two of the fund’s better-performing stocks, Westport Innovations and Clean Energy Fuels, “are acknowledging this trend,” he said. Westport shares have surged 58 percent in 2010 while Clean Energy Fuels has advanced 17 percent. “These are companies that by growing their businesses they are contributing to a reduction in the emissions of CO2,” de Weck said. Technology Stocks The stocks de Weck and his team buy are considered best poised to gain from interest among governments and investors seeking growth from technology that limits greenhouse-gas emissions, including carbon capture and storage technologies. The European Union wants 20 percent of its energy to come from renewable sources such as wind and solar in 10 years. Half of the holdings in de Weck’s fund, which started in May 2007 and avoid oil, coal and nuclear power, are from North America with about 36 percent from Europe. He views the U.S. as a “swing factor,” with stimulus-related money not spent last year coming through in 2010 and 2011 for clean energy companies. De Weck favors the U.S. smart-meter company Itron Inc. , China High Speed Transmission Equipment Group and RusHydro. “We have one investment in Russia, RusHydro , which for us it’s very cheap,” de Weck said. “On a megawatt basis, it’s probably the cheapest hydroelectric generator in the world, very attractively valued.” ‘Up Tremendously’ With an investment theme that highlights clean energy, China “was nowhere when we launched this fund, zero. They’ve picked up tremendously,” he said. The Chinese last year installed more wind-farm capacity than in Europe or the U.S. De Weck’s fund attracted about 10 percent in net new money in the first quarter, he said. Also encouraging is the performance of stocks such as Cree, which says its TrueWhite technology uses 85 percent less energy than incandescent systems, he said. Cree benefits from demand for LEDs in TVs and computer backlit displays including Apple Inc. ’s iPad. LEDs also are gaining popularity among financially pressed municipalities for longer-lasting street signs and lights, de Weck said. “The commercial lighting people get that.” Ormat Technologies Inc. is a top holding. “What they do is very simple: They explore and identify sites for geothermal energy. Heat close to the ground. Drill holes, install the equipment. Capture the heat,” he said. Ormat creates “reliable renewable power.” So why invest in clean energy over other sectors? “The drivers here are quite significant: You have long-term issues of energy supply, i.e., we don’t know how long our hydrocarbons last. They aren’t infinite, that’s one thing we know,” he said. With the transition to a lower-carbon environment, de Weck said investing in “clean energy is an area which you can address this.” To contact the reporter on this story: Randall Hackley in Geneva via rhackley@bloomberg.net

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Greenland Oil Rush Looms as Exxon Eyes Cairn’s $400 Million Arctic Wager

May 5, 2010

By Marianne Stigset May 5 (Bloomberg) — Cairn Energy Plc is betting $400 million this year on striking oil off Greenland, a campaign that will be closely watched by producers such as Exxon Mobil Corp. and Chevron Corp. that hold rights off the island. The potential rewards may justify the cost of Arctic drilling: Greenland’s waters could hold 50 billion barrels of crude and gas, the U.S. Geological Survey estimates, enough to meet Europe’s energy demand for almost two years. More companies are on the way. Royal Dutch Shell Plc and Statoil ASA were among bidders in this week’s auction of offshore drilling rights. After six failed attempts by explorers in Greenland over the past 30 years the rush is on as global warming eases Arctic exploration and because of dwindling resources in areas such as the North Sea. For Greenland’s 56,000 inhabitants, largely dependent on shrimp exports, petroleum may also bring wealth and allow more independence from Denmark, which has held sway over the world’s largest island since 1721. “It’s an enormous acreage area and you’ve got to have stamina to see this through properly,” Simon Thomson , legal and commercial director at Cairn, which holds eight Greenland licenses, said in an interview. “Obviously we’re hoping for success, but the blocks are 10,000 square kilometers each.” ‘Serious Threats’ The far north’s potential is spurring exploration from Russia to Alaska. The Arctic may hold 27 percent of the world’s undiscovered gas and 13 percent of the oil, the USGS said in 2008. Areas off Greenland, including some shared with Canada, may hold 17 billion barrels of oil, 148 trillion cubic feet of gas and 9.3 billion barrels of gas liquids, the USGS said. Highlighted by the unfolding disaster in the U.S. Gulf of Mexico from a BP Plc oil spill, exploring in untouched , environmentally fragile waters home to whales and walruses isn’t without risk. According to the WWF , development and transport are “already serious threats” to the Arctic and has met opposition and kept areas off limits from Alaska to Norway. “Oil exploration in Greenland is very closely tied to independence, so there’s enormous local support,” said Truls Gullowsen, head of Greenpeace in Norway. “The area of the 2010 licensing round is very complicated, it’s very far up north, there’s lots of ice, lots of natural resources and very far away from any form of support should things go wrong.” Fishing, Hunting Greenland will in August announce the winners of 14 blocks in a 150,000-square-kilometer area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002. The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline. The government has financed seismic surveys to attract explorers. It has handed out 13 licenses since 2002 to Cairn, Exxon, Chevron, Encana Corp., Husky Energy Inc., Dong Energy A/S, PA Resources AB and Nunaoil A/S, the state-owned company. There was “fierce” competition in the latest round, Greenland’s Bureau of Minerals and Petroleum said in a statement on May 3. “We’re a fishing and hunting economy, just like Norway used to be,” Oil Minister Ove Karl Berthelsen said by phone from Nuuk, drawing a comparison with the world’s sixth-biggest crude exporter. “We want our industry to stand on several legs and oil is very important. The next 20 years will be vital.” Greenland gets about $600 million a year, or $10,700 a person, from Denmark. It was granted home rule in 1979 and increased local powers in 2009. The island’s $2 billion economy derives about half its exports from shrimp, according to Greenland’s statistics agency . With planned taxes and royalties, and the 12.5 percent stake held in each license by Nunaoil, the government will get about 59 percent of the revenue, according to Joern Skov Nielsen , head of the petroleum agency. Oil Seeps In November, seven companies including Chevron, Exxon and Dong Energy A/S formed the Greenland Oil Industry Association, to share data and hold talks with the local government on environmental and safety issues. For companies like Norwegian Energy Co., the licensing round this year and in 2012 may be the right time to get a share of the potential windfall, Chief Executive Officer Scott Kerr said in an interview. “A small company like us we need to go in now, because if someone goes in and a discovery is made, we immediately get priced out of the market If Cairn has success, there are going to be a lot of people looking at Greenland,” he said. Statoil Returns Spokespeople at Statoil, Shell, Norwegian Energy and Cairn confirmed that they had applied for licenses in this year’s round. Of companies with current licenses, Exxon and PA Resources decided not to bid, according to spokespeople. “We’re still considering other Greenland opportunities,” said Patrick McGinn , an Exxon spokesman. Spokespeople at Chevron, Dong, Husky and Encana weren’t immediately available for a comment. For Statoil it will be a comeback to Greenland after drilling a dry well off Nuuk in 2000, the first for any explorer since the late 1970s. “Arctic projects are very close to the capabilities of Statoil,” Helge Lund , chief executive of Norway’s largest oil company, said on April 26. “We are interested in Greenland and the prospects there.” Cairn, based in Edinburgh, is preparing to drill as many as four wells off Disko Island, a whaling and hunting community where icebergs and humpback whales can be spotted offshore. The company expects to invest $1 billion over three years. Cairn acquired “a large amount of seismic data” in the past two years and plans four more wells next year, Thomson said. Cairn is assuming a 10 percent chance of success. Investments Needed As many as 20 wells may be drilled in the next 10 years with potential production in a decade, said Skov Nielsen. Exxon, Chevron and Dong must decide on drilling in their licenses off Disko over the next four years. The costs per well is about $100 million and eventual production facilities may need investments of $5 billion to $6 billion, he said. “The first discovery has to be at least 250-300 million barrels but any subsequent discoveries could be smaller because then you have the infrastructure,” he said. Companies drilling in the area will be able to build upon experience from other Arctic exploration, said Cairn’s Thomson. Still, icebergs, water depths that reach 1,500 meters toward the sea border with Canada, and months of darkness are challenges, said Hans Kristian Olsen , chief executive at Nunaoil. The island will also need to build up the industry, said Olsen. “We are starting from scratch in terms of developing an exploration and production industry.” To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net .

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Greenland Oil Rush Looms as Exxon Eyes Cairn’s $400 Million Arctic Wager

May 5, 2010

By Marianne Stigset May 5 (Bloomberg) — Cairn Energy Plc is betting $400 million this year on striking oil off Greenland, a campaign that will be closely watched by producers such as Exxon Mobil Corp. and Chevron Corp. that hold rights off the island. The potential rewards may justify the cost of Arctic drilling: Greenland’s waters could hold 50 billion barrels of crude and gas, the U.S. Geological Survey estimates, enough to meet Europe’s energy demand for almost two years. More companies are on the way. Royal Dutch Shell Plc and Statoil ASA were among bidders in this week’s auction of offshore drilling rights. After six failed attempts by explorers in Greenland over the past 30 years the rush is on as global warming eases Arctic exploration and because of dwindling resources in areas such as the North Sea. For Greenland’s 56,000 inhabitants, largely dependent on shrimp exports, petroleum may also bring wealth and allow more independence from Denmark, which has held sway over the world’s largest island since 1721. “It’s an enormous acreage area and you’ve got to have stamina to see this through properly,” Simon Thomson , legal and commercial director at Cairn, which holds eight Greenland licenses, said in an interview. “Obviously we’re hoping for success, but the blocks are 10,000 square kilometers each.” ‘Serious Threats’ The far north’s potential is spurring exploration from Russia to Alaska. The Arctic may hold 27 percent of the world’s undiscovered gas and 13 percent of the oil, the USGS said in 2008. Areas off Greenland, including some shared with Canada, may hold 17 billion barrels of oil, 148 trillion cubic feet of gas and 9.3 billion barrels of gas liquids, the USGS said. Highlighted by the unfolding disaster in the U.S. Gulf of Mexico from a BP Plc oil spill, exploring in untouched , environmentally fragile waters home to whales and walruses isn’t without risk. According to the WWF , development and transport are “already serious threats” to the Arctic and has met opposition and kept areas off limits from Alaska to Norway. “Oil exploration in Greenland is very closely tied to independence, so there’s enormous local support,” said Truls Gullowsen, head of Greenpeace in Norway. “The area of the 2010 licensing round is very complicated, it’s very far up north, there’s lots of ice, lots of natural resources and very far away from any form of support should things go wrong.” Fishing, Hunting Greenland will in August announce the winners of 14 blocks in a 150,000-square-kilometer area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002. The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline. The government has financed seismic surveys to attract explorers. It has handed out 13 licenses since 2002 to Cairn, Exxon, Chevron, Encana Corp., Husky Energy Inc., Dong Energy A/S, PA Resources AB and Nunaoil A/S, the state-owned company. There was “fierce” competition in the latest round, Greenland’s Bureau of Minerals and Petroleum said in a statement on May 3. “We’re a fishing and hunting economy, just like Norway used to be,” Oil Minister Ove Karl Berthelsen said by phone from Nuuk, drawing a comparison with the world’s sixth-biggest crude exporter. “We want our industry to stand on several legs and oil is very important. The next 20 years will be vital.” Greenland gets about $600 million a year, or $10,700 a person, from Denmark. It was granted home rule in 1979 and increased local powers in 2009. The island’s $2 billion economy derives about half its exports from shrimp, according to Greenland’s statistics agency . With planned taxes and royalties, and the 12.5 percent stake held in each license by Nunaoil, the government will get about 59 percent of the revenue, according to Joern Skov Nielsen , head of the petroleum agency. Oil Seeps In November, seven companies including Chevron, Exxon and Dong Energy A/S formed the Greenland Oil Industry Association, to share data and hold talks with the local government on environmental and safety issues. For companies like Norwegian Energy Co., the licensing round this year and in 2012 may be the right time to get a share of the potential windfall, Chief Executive Officer Scott Kerr said in an interview. “A small company like us we need to go in now, because if someone goes in and a discovery is made, we immediately get priced out of the market If Cairn has success, there are going to be a lot of people looking at Greenland,” he said. Statoil Returns Spokespeople at Statoil, Shell, Norwegian Energy and Cairn confirmed that they had applied for licenses in this year’s round. Of companies with current licenses, Exxon and PA Resources decided not to bid, according to spokespeople. “We’re still considering other Greenland opportunities,” said Patrick McGinn , an Exxon spokesman. Spokespeople at Chevron, Dong, Husky and Encana weren’t immediately available for a comment. For Statoil it will be a comeback to Greenland after drilling a dry well off Nuuk in 2000, the first for any explorer since the late 1970s. “Arctic projects are very close to the capabilities of Statoil,” Helge Lund , chief executive of Norway’s largest oil company, said on April 26. “We are interested in Greenland and the prospects there.” Cairn, based in Edinburgh, is preparing to drill as many as four wells off Disko Island, a whaling and hunting community where icebergs and humpback whales can be spotted offshore. The company expects to invest $1 billion over three years. Cairn acquired “a large amount of seismic data” in the past two years and plans four more wells next year, Thomson said. Cairn is assuming a 10 percent chance of success. Investments Needed As many as 20 wells may be drilled in the next 10 years with potential production in a decade, said Skov Nielsen. Exxon, Chevron and Dong must decide on drilling in their licenses off Disko over the next four years. The costs per well is about $100 million and eventual production facilities may need investments of $5 billion to $6 billion, he said. “The first discovery has to be at least 250-300 million barrels but any subsequent discoveries could be smaller because then you have the infrastructure,” he said. Companies drilling in the area will be able to build upon experience from other Arctic exploration, said Cairn’s Thomson. Still, icebergs, water depths that reach 1,500 meters toward the sea border with Canada, and months of darkness are challenges, said Hans Kristian Olsen , chief executive at Nunaoil. The island will also need to build up the industry, said Olsen. “We are starting from scratch in terms of developing an exploration and production industry.” To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net .

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U.S. Gulf States Mobilize for BP Oil Spill Reminiscent of Valdez Accident

April 30, 2010

By Jessica Resnick-Ault and Jim Polson April 30 (Bloomberg) — U.S. Interior Department inspectors began boarding deep-water platforms in the Gulf of Mexico, and Louisiana asked for help from the National Guard as an oil sheen reportedly washed ashore in the worst rig spill in four decades. The U.S. will “use every single available resource at our disposal,” in response to the spill, President Barack Obama said yesterday. BP Plc , which owns the leaking well, is “ultimately responsible” for paying for the cleanup, the president said. A faint sheen washed ashore on the Louisiana coastline last night, the Associated Press reported. Oil may hit Mississippi tomorrow, Alabama in two days and Florida in three, according to a government forecast . Oil is escaping from the well at a rate of about 5,000 barrels a day, five times faster than previously estimated, according to the U.S. Coast Guard. At that rate, the volume of the leak will exceed Alaska’s 1989 Exxon Valdez accident by the third week of June, making it the worst U.S. oil spill. “This has a danger of becoming an utter ecological disaster,” said Ken Medlock , a fellow in energy and resource economics at Rice University’s Baker Institute for Public Policy in Houston. “This is going to result in remediation costs, and is going to be burdensome, to say the least.” Louisiana Governor Bobby Jindal declared a state of emergency and demanded extra oil barriers from BP and the U.S. Coast Guard to protect wildlife preserves that nurture a $1.8 billion seafood industry, the richest in the U.S. behind Alaska. National Guard Jindal also requested federal funding for 90 days of military duty for as many as 6,000 National Guard troops. Shrimpers and fishermen filed suit in federal court on April 28 against BP and Transocean Ltd., owner of the sunken rig. The lawsuits say Louisiana supplies 25 percent of the seafood for the continental U.S. Families of some of the 11 workers killed when the rig exploded and sank have also filed suit. Louisiana is training crews to remove oil from marshes and plans to use prisoners, adding hands to the cleanup effort, Jindal said at a press conference. BP, unable to staunch the leak that began when a drilling rig burned and sank a week ago, yesterday proposed injecting detergent 5,000 feet below the surface in an effort to disperse oil before it can form a slick. U.S. Coast Guard Rear Admiral Mary Landry said she was considering the “novel” request. Permanent Solution BP has a rig on site to drill to the base of the damaged well and plug the leak, the only permanent solution, according to the company and federal officials. Drilling may start within 48 hours, Doug Suttles , chief operating officer of exploration and production, said yesterday at a press conference in Robert, Louisiana. The work may take three months, he said. “It’s the biggest U.S. offshore platform incident in 40 years,” Dagmar Schimdt Etkin , a Cortland, New York-based oil spill consultant who has worked for BP, the Coast Guard and the National Oceanic and Atmospheric Administration, said yesterday. “Well blowouts are extremely rare events and usually when they occur it’s only a few barrels.” Oil from the leaking well is lighter than the Alaskan crude spilled by the Exxon Valdez, Etkin said. “There are going to be more toxic impacts than the heavy black oil you saw with the Exxon Valdez.” Florida, Alabama and Mississippi dispatched all their marine research vessels to begin sampling water for oil and fish for taint, Robert L. Shipp, chairman of the department of marine sciences at the University of South Alabama in Mobile, said yesterday. Shares Plunge BP summoned offshore experts from Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell Plc to devise other ways to halt the leak, Suttles said. BP also called in Anadarko Petroleum Corp., its partner in the Macondo field where the rig was drilling. BP’s shares fell for a second day, dropping 12.5 pence, or 2.1 percent, to 571.7 pence at 8:15 a.m. in London. The shares have declined 12 percent since the April 20 explosion, valuing the company at 107.9 billion pounds ($165.8 billion). Transocean Ltd. fell 7.5 percent to $78.51 in composite trading on the New York Stock Exchange yesterday, the biggest drop in more than a year. BP’s costs, now $6 million a day, will rise as it adds people and equipment, Neil Chapman , company spokesman, said in an interview in Robert. The company would welcome additional assistance, including from the U.S. Defense Department and from volunteers, he said. Interior, Homeland Security The secretaries of the Interior and Homeland Security departments will join the head of the Environmental Protection Agency to visit the site today, Obama said. The president has contacted governors of states that may be affected, he said. Sixteen federal agencies are responding to the spill. Minerals Management Service inspectors will immediately check testing records of blowout preventers at all deep-water rigs, moving to safety inspections of all deep-water oil and gas producing platforms, Mike Saucier, an agency spokesman, said at the press conference in Robert. Blowout preventers are stacks of valves intended to cut off any unexpected pressure surge from a well. BP doesn’t know why the blowout preventer failed to avert last week’s explosion and fire that destroyed the rig, Suttles said. Crew aboard the Deepwater Horizon activated controls that should have triggered it, he said yesterday. The spill may cost the insurance industry as much as $1.5 billion in claims, according to Transatlantic Holdings Inc. Oil Executives Summoned Chief executive officers of BP, Exxon Mobil, ConocoPhillips, Royal Dutch Shell and Chevron have been summoned to testify on the spill before the Select Committee on Energy Independence and Global Warming, according to an e-mailed statement from the chairman, Representative Edward Markey , a Massachusetts Democrat. Representative Henry Waxman , chairman of the House Energy and Commerce Committee, sent letters to the heads of BP and Transocean seeking inspection reports for the Deepwater Horizon. There are 90 rigs searching for oil and natural gas in the U.S. Gulf of Mexico, according to the Minerals Management Service, which oversees drilling in federal waters as part of the Interior Department. The Exxon Valdez caused the worst oil spill in U.S. history. The tanker dumped about 260,000 barrels of crude into the Prince William Sound, for which Exxon Mobil paid $900 million in fines. To contact the reporters on this story: Jessica Resnick-Ault in New York at jresnickault@bloomberg.net ; Jim Polson in New York at jpolson@bloomberg.net .

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Wen Says His Conscience Is Clear Over China’s Role at the Climate Summit

March 14, 2010

By Bloomberg News March 14 (Bloomberg) — Chinese Premier Wen Jiabao defended China’s conduct at the December climate-change meeting in Copenhagen, saying he skipped a leaders’ meeting because his delegation hadn’t been formally notified. “My conscience remains untainted,” Wen said at a press conference in Beijing today marking the end of China’s annual parliamentary meeting. Talks between 193 countries in Copenhagen broke down, failing to yield a binding agreement on curbing greenhouse gases. Wen, whose nation is the biggest emitter of the pollution blamed for global warming, said it remains “a mystery to me” why he received no formal notice of the leaders’ meeting, which included U.S. President Barack Obama . Vice Foreign Minister He Yafei went instead and protested that China hadn’t been notified, Wen said today. The Copenhagen results were “the best outcome that could have been achieved,” Wen said, adding that China “highly commends and supports the Copenhagen accord.” — Michael Forsythe , Eugene Tang , Li Yanping . Editors: Paul Panckhurst , John Liu To contact Bloomberg News staff on this story: Michael Forsythe in Washington at +86-10-6649-7580 or mforsythe@bloomberg.net

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Climate-Change Fervor Cools as Skepticism Mounts, Companies Quit Coalition

February 22, 2010

By Kim Chipman Feb. 22 (Bloomberg) — U.S. Representative Bob Inglis went from climate-change skeptic to believer four years ago as opinion leaders from Al Gore to General Electric Co. chief Jeffrey Immelt called for laws to curb global warming. Today Inglis, a South Carolina Republican, is a convert who’s watching the public become more doubtful. “I have many people saying, ‘Now don’t you see the problem with the science?’” said Inglis, who dismissed global warming until 2006, when scientists showed him evidence in the melting ice of Antarctica. Three years after former Vice President Gore won a Nobel Prize for sounding the alarm on climate change and GE joined a coalition of companies pushing for a cap on greenhouse gases, public concern is flagging, along with U.S. and global efforts to mount government responses. Polls find more Americans questioning whether human activity is leading to climate change, or whether the trend is so dire as to justify reshaping U.S. energy use during an economic slump, as President Barack Obama has proposed. Record snowfalls in the U.S. also are fueling doubts. “The consensus of anybody who studies American opinion has to be that there’s less concern, rather than more, on global warming,” said Frank Newport , editor-in-chief of the Gallup Organization Inc., a Washington-based polling company. The latest blow to those urging action against global warming came last week, when Yvo de Boer said he would step down as United Nations climate chief, two months after 193 countries meeting in Copenhagen failed to reach a binding agreement on curbing greenhouse gases. ‘Sad Day’ The resignation may reduce the possibility that a worldwide market aimed at reducing carbon emissions is within reach, said Trevor Sikorski , an emissions analyst for Barclays Capital in London. “It’s a sad day for the carbon market, and we’ll be lucky to get somebody with Yvo’s dedication and hard work as a successor,” Sikorski said. UN carbon credits have fallen 13 percent on the European Climate Exchange in London since the start of the Copenhagen meeting, which was aiming to set limits for emissions after 2012. The NEX index tracking shares of 86 companies involved in clean energy has tumbled 12 percent since the talks. Also last week, ConocoPhillips , BP Plc and Caterpillar Inc. said they will quit the U.S. Climate Action Partnership, a group of companies created in 2007 to push for legislation to reduce carbon pollution. GE Chief Executive Officer Immelt, who helped spearhead formation of the coalition, says legislation is needed so companies know how to proceed with long-term investments. Challenge to Obama ConocoPhillips CEO Jim Mulva said proposals in Congress “unfairly penalized” domestic refineries. Houston-based ConocoPhillips, the third-largest U.S. oil company, was the first oil producer to join the group. London-based BP, Europe’s biggest oil company, and Peoria, Illinois-based Caterpillar, the world’s largest maker of bulldozers, said they’ll focus on their own approaches to global warming. Both were founding members of the coalition. The defections underscore the challenge Obama and Democratic lawmakers face in getting a climate bill passed, said Frank Maisano , an energy specialist for Bracewell & Giuliani, a Washington lobbying firm. “One reason people signed on to USCAP when it was trendy was the notion that the train was leaving the station,” Maisano said. “Now that movement on legislation has slowed to a crawl, many of these companies don’t see a benefit in being involved.” Obama came to office last year pledging to enact “cap- and-trade” legislation that would limit carbon-dioxide emissions and establish a market in the trading of pollution allowances. A House-passed measure has stalled in the Senate. Leaked E-mails “The push to move very rapidly on new climate-change laws looks like it has hit a stone wall,” said Walter Russell Mead , a senior fellow with the Council on Foreign Relations in New York. An NBC/Wall Street Journal poll in December showed 54 percent of those questioned believe that action should be taken to deal with climate change, down from 64 percent in 2007. Skepticism also may be on the rise in the U.K. A poll conducted for BBC News this month found 25 percent of people surveyed didn’t believe in global warming, a rise of 10 percentage points from November. Public doubt has been fed by climate scientists’ e-mails obtained from computers at the University of East Anglia in the U.K. in November, Representative Inglis said. Scientists referred in the messages to a “trick” used to smooth out data showing an anomaly in the trend toward higher global temperatures, and wrote about blocking articles by climate-change critics from a report by a UN panel. Science ‘Debunked’ “Now we see that that science has been pretty well debunked,” Senator James Inhofe , an Oklahoma Republican who has called man-made global warming a hoax, said on CNN in December. The UN panel, which shared the Nobel Peace Prize with Gore, has been faulted for exaggerating the pace at which Himalayan glaciers are melting and for using reports by environmental advocacy groups as a basis for some findings. Peabody Energy Corp. , the biggest U.S. coal company, said in a court challenge Feb. 12 that the Obama administration’s Environmental Protection Agency relied on flawed science by the UN panel in its decision last year to regulate carbon-dioxide emissions. The EPA “needs to step back and begin a thorough review of the real state of scientific understanding of greenhouse gases,” Beth Sutton , a spokeswoman for the St. Louis-based company, said in an e-mail. “The opposition is trying to blow up a few mistakes in the science,” said former Senator Tim Wirth , a Colorado Democrat who heads the UN Foundation, a Washington-based philanthropy backed by billionaire Ted Turner . “It’s a conspiracy that simply doesn’t exist. The basic science hasn’t changed.” Economy, Snow Uncertainty about the economy also has made Americans wary about shifting from fossil fuels, said Anthony Leiserowitz , director of the Yale Project on Climate Change in New Haven, Connecticut. “Americans are frustrated and angry and scared about the current economic situation, and that has pushed a lot of other issues, including climate change, off the table,” he said. A harsh winter in some regions has added to skepticism that the world is warming. “It’ll keep snowing in D.C. until Al Gore cries uncle,” Senator Jim DeMint , a South Carolina Republican, said in a Twitter message on Feb. 9, as the Washington area was blanketed in record snowfall. Advocates for climate-change legislation say a single snowy winter doesn’t disprove the long-term trend toward warming and may even bolster the argument that weather patterns are growing more extreme. “Climate change doesn’t mean just global warming, it means climate disruption,” Wirth said. To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net .

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Raymond J. Learsy: $80 Barrel Oil. The Billion Dollar Day Extortion: A Somnolent Administration and Dysfunctional Congress’ Gift to the American People

February 21, 2010

At $80 a barrel, an excess of one billion dollars a day is being lifted from the pockets of the American consumer through higher gas prices, heating bills, lost jobs because of higher industrial feed stock costs, all going into the pockets of oil interests and most ominously to foreign suppliers, many of whose policies present us with grave national security concerns. Let me explain. First the math. We consume some 20 million barrels of oil a day in the United States. Without manipulation nor speculation, with rational government initiatives that are totaling lacking at present, the price of oil should be $30/bbl and probably less (doubters, please note the quoted price of oil was $33/barrel just about a year ago). The difference between today’s $80/bbl price and a $30 price is, of course, $50/bbl. Multiplied by 20 million brings us to a billion dollars a day or $365,000,000,000 a year. I leave it to your imagination what that sum could mean to our struggling economy. (As an aside, a functioning government could readily mandate other policies to reduce consumption of fossil fuels, necessary to confront the existential danger of global warming, rather than transferring billions upon billions of our dollars to oil interests and their allies worldwide) It has been the contention of this post that the price of oil is being grossly distorted by a combination of irresponsible if not collusive government policies in combination with feckless oversight of a corrupted commodity trading process. All this resulting in oil prices that have little or nothing to do with the market discipline of supply and demand. And especially at this moment where the world is awash with oil and supply is beyond industry’s capability to store it readily (super tankers are being chartered to stockpile oil because land storage is at capacity) and consumption is diminishing to the point that a number of refineries have shut down (please see “Obama Finally Takes on the Banks–Commodity Futures Trading Needs be Next” 0l.22.l0). Much of today’s price aberration can be attributed to the policies of the oil industry’s President in residence, George W. Bush. He carried the beacon of the oil patch’s priorities, from a policy coaxing Iraq back into the arms of OPEC, from lack of oversight and regulation of oil trading on the commodity exchanges, from tepid automobile gas mileage standards, from a Department of Energy almost totally wedded to and becoming an apologist for the oil industry and its interests, from a corrupted Department of the Interior filled with oil industry partisans ever happy to accord the industry cozy accounting in the determination of royalties, from coddling Saudi Arabia and OPEC policies, from blocking all Congressional initiatives for “NOPEC” legislation which would have ended the sovereign immunity under U.S. law extended to OPEC national oil companies precluding legal action against OPEC’s monopolistic conspiracy, and on. Of particular significance was Bush’s State of the Union address in 2007 pledging to double the nation’s Strategic Petroleum Reserve (SPR) to 1.5 billion barrels from its then 727 million barrels (for those counting, 727 million bbls is the approximate equivalent of Iran’s annual oil exports to world markets). The impact of that announcement, though little commented upon at the time, was cathartic. Prices had already risen to a then extraordinary $60/bbl weeks before and were in the process retreating toward $50 and below. Well Shazam! The President’s announcement changed all that to the consummate glee of oil producers and potentates. The turnaround was immediate. Prices jumped $2.45/bbl or 5% with the announcement to $55/bbl and never looked back for long until hitting $l47/bbl by the summer of 2008, price levels undreamed of, even in the wildest fantasies of the vested oil barons. Bush’s declaration doubling the SPR had a dual impact. First it stopped in its tracks the downward pressure on oil prices at the time. Doubling the SPR would take ever more expensive oil out of the market, at government expense, but would also reduce market availability of oil thereby putting additional pressure toward higher prices for oil and oil products. Most critically it sent a message to the oil barons and their flock that the sky was the limit and the government would be tolerant of whatever they construed, used, hyped, orchestrated, to raise the price of oil. This government was on their side and would worry about its impact on the daily lives of Americans some other time. As the price of oil escalated, the government and the media, extending to Nobel laureates, bent over backwards to keep us all in a trance, spinning the same old threadbare song, “It’s all about supply and demand,” and its all about the “weak dollar.” Please see: -”Paul Krugman and the New York Time’s Pious Pontifications At The Pump” 05.l6.08 -”Our Treasury Pumps For Opec,” 06.02.08 -”Oil’s Largest One-Day On Record:Thank You, Mr. Bernanke,” 06.06.08 -”A Short Tutorial on the High Price of Oil and The Falling Dollar,” 10.19.07 Until it all blew up. With hindsight quite a number of economists have found that it wasn’t simply spurious financial engineering, but the triple digit oil prices of the summer of ’08 that made a major contribution to the collapse of the financial markets. After all, how may spec homes in the suburbs can you sell with gasoline at over $4 per gallon and at $5 in some locations, with no end to the acceleration in prices in sight. Please remember, among others Goldman Sachs, was ‘helpful’ in ‘calming’ matters at the time by predicting $200/bbl oil. Well the financial collapse and the resulting economic downturn was so pronounced, money became so tight that even oil was impacted with prices retreating to just over $30/bbl in December 2008 . After a brief hiatus given the distorted pricing of the summer the SPR was put back into full operation in January 2009. Far be it for Bush and Energy Department to leave the scene without giving their oil patch buddies one last swipe at the SPR boondoggle. And then the Obama administration took over. During the campaign Obama had made statements about suspending the purchases and releasing oil from the SPR (please see “Obama Nails It: Calls For Release of 70 million Barrels From The Strategic Petroleum Reserve” 08.04.08). For the first 30 days of his administration lingered around $30plus/barrel. Then it became clear that Obama had neither the will nor ability totake on the oil interests and deal with escalating oil prices by releasing oil from the SPR let alone suspending oil purchases for the SPR, and oil prices went on their merry way. They are now more than l00 percent higher than they were a year ago. So much for realtime energy leadership. Well and good that windmills will be built, corn for ethanol will be planted, nuclear plants are on the drawing board, but the day to day economic problems caused by high and distorted oil prices are in the here and now and the economic bite taken out of the economy, given the jobs and income impacted by high oil prices are being felt by the country at large, now, at this very moment. There is not excuse for the current high price of oil. Saudi exports of oil to the U.S. are at the lowest levels in 22 years. And not because OPEC mandated export quotas have restricted shipments. There is just no call for more product. Nor because the Pacific Rim markets are pulling more crude. Russia has only recently initiated a pipeline for Siberian Oil shipping from the Russian Pacific port of Kozmino. It has already taken significant market share from such as Saudi Arabia and Iran in the Japanese, Korean and Chinese markets. But there are also other reasons. We continue to have dysfunctional oversight agencies such as the CFTC, that has only now, after much internal debate with commissioners who give the impression of being more focused on the post commission sinecures on Wall Street than the issues at hand, has finally proposed limits on energy speculation subject to a 90 day comment period. It was in August of last year that Chairman Gensler acknowledged that oil prices were being influenced by ‘speculative’ trading (please see “The Huffington Post Outs The Oil Price Speculators,” 08.02.09) and in near one year nothing of consequence will have been done . NOPEC legislation has not been introduced nor acted upon by this administration. Its Department of Energy, while working diligently on long lead time alternative energy issues, seems asleep at the switch on real time economic concerns related to the current high price of oil, And of course, there is the SPR still being dutifully filled to the happy cheers of the oil pooh-bahs both here and abroad at evef increasing expense to American pocketbooks. Ladies and Gentleman, this is an emergency. The economy in its current condition can not tolerate $80/bbl oil. It is time to release oil from the reserve as a signal that enough is enough and to make the oil speculators aware, finally, that the price of oil is not a one way street!

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Jacques Henri Taylor: Despite Economic and Political Hardships, I Still Say This is a Great Time to be Alive

February 3, 2010

After all of the talk about the severity of the economy, the lack of jobs, shrinking credit availability, poor housing market, rising deficits, heart-breaking wars, deplorable education trends for our children and youth, an embarrassing health care system, soul crushing poverty at home and abroad, devastating natural disasters, global warming, and the stifling grip of social, sexual, racial, and economic injustice, I still say this is a great time to be alive. I say this for several reasons. 1. For all that is upsetting about our time, we have finally manifested an environment where discourse is valued. It is even encouraged. Just a few years ago, if you to disagreed with the Bush administration, you were called unpatriotic. That potent label was attached to anyone who did not want to go to war. And it was un-American not to or support the economic or social policies of the day. In contrast, there is plenty of tough criticism for the Obama administration from the same people who supported his run for office. This is a good thing. It is healthy. Our voices of concern and the expression of our different ideas will help lift the best ideas to the attention our government. I am not so naive as to think that this process will be easy, smooth, or always satisfying. I do believe that having a president that is encouraging the expression of ideas and solutions and who takes the time to listen and discuss them with his advisors is a hope-filled situation. Criticism, especially from the ones who support you can be good. It can be inspiring, refreshing, and it can also protect you from harm that you can not see coming. This is a very auspicious time to be alive. 2. The response by our global community to the needs of the people of Haiti after the earthquake struck is giving us a chance to restore faith in humanity. And so far, I think our species is doing well. Sure there is room for criticism and for improvement; however, I am moved by the breadth and scope of our global community’s generosity. The use of technology as exemplified by the use of texting to make donations and the massive number of TV commercials and news items that continue to encourage us all to give what we can. This is an affirmation of the potential for compassion. Haiti continues to have top page placement in leading media such as the Huffington Post. Governments from around the world are contributing to the humanitarian effort. NGOs are providing the medical, structural, and basic needs to help the Haitians rebuild. There even seems to be the social and political pressure to say focused on Haiti to give the Haitian people every chance to create a society of prosperity as opposed to one of just mere survival. It is amazing to see large corporations – like Wells Fargo – pressured by we the people into dropping transaction fees for donations to help the Haitians. And all of this for a country that has no oil or diamonds. All of this for a country whose greatest resource is its people – Black people. I know that the work is anywhere near completion, but doesn’t the possibility for real commitment feel more real than it ever has? When focused, motivated, creative our global community can get it right and for the right reasons. 3. Everything that needs to happen in Haiti needs to be addressed, although on different scales, right here in the US. I understand that it takes political will and a movement by the people to reallocate the kind of money that we are spending on the wars in Iraq and Afghanistan towards healthcare, education, and infrastructure. And I think the time for this reshuffling of the nations resources is approaching. It feels to me that we are living in a time where we are becoming grounded, connected, and willing to open of hearts to an era of genuine compassion – and yes, change.

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Don Tapscott: Stephen Harper Defends the Status Quo

January 30, 2010

Although Prime Minister Stephen Harper’s speech on Thursday in Davos was received well, many of the delegates that I spoke with told me they thought Harper’s vision was too blinkered. With the conspicuous exception of global warming, Harper acknowledged that many challenges face the world, but told delegates that the two most appropriate arenas for discussion and decision making are the G8 and the G20. He described the latter as “the world’s premier forum for economic cooperation.” And each country should be guided by “enlightened self-interest” and a better “attitude.” But the consensus in Davos is that the planet is facing urgent, complicated, 21st century problems, and we need to craft 21st century systems to develop the answers. We should involve all of our planet’s best talent in the solution-seeking process, including the private sector, civil society and individual citizens. Doubtless Harper placed emphasis on the G8 and G20 because this year’s meetings will occur in Canada and he is the Chair. But that doesn’t mean he should be indifferent to the enormous contributions that could be made by others, or closed to the exciting new approaches to solving global problems. Following last year’s World Economic Forum at Davos, many delegates went on to participate in the Forum’s Global Redesign Initiative in meetings around the world. The Initiative brought together diverse stakeholders to develop fresh solutions to the many challenges facing our small and fragile planet. Much of this year’s Forum was devoted to discussing the proposals developed by the Initiative. The Initiative itself was driven by the belief of Forum members that our international collaborative processes are tired and too constrained to meet current needs. In Davos, the failed Copenhagen global-warming conference was frequently used by delegates as a metaphor for the inadequacy of existing processes. To be sure, no one is suggesting that nation states do not need to sit down and hammer out accords. But many Davos delegates believe that such meetings, while necessary, are by themselves insufficient to grapple with the many thorny issues confronting us. Had Harper come to Davos a day earlier, he would have heard French President Nicolas Sarkozy deliver a withering critique of how the planet’s issues are managed today. “From the moment we accepted the idea that the market was always right and that no other opposing factors need be taken into account, globalization skidded out of control,” Sarkozy said. Many systems in the world, including capitalism, were in serious need of reform. “Each of us must hold the conviction that the world of tomorrow cannot be the same as the world of yesterday.” A text of Sarkozy’s remarks can be seen here . Yes the G8 and G20 meetings will be important and they may even make some progress on issues such as climate change. But today there are collaborations involving millions of people, along with governments, private companies and civil society organizations that are actually doing something about climate change. Government leaders need to listen to fresh thinking about how to harness this power, rather than relying on old approaches that have the world stalled.

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Gary Hirshberg: Let’s Price Carbon Now, for Business’ Sake

January 18, 2010

Now that Congressional action on healthcare appears to be concluding, it’s time to attend to the other 500-pound gorilla in the Senate cloakroom: climate legislation. The good news is that when it comes to global warming, the only thing the U.S. has more of than culpability is opportunity. The most serious problem our species has ever created, climate change is not just coming, it is here. Its scale and impacts are not just increasing, they’re accelerating. Tipping points to irreparable damages are very close, and some may have been crossed already. With global warming now startlingly evident, fossil fuel interests are shifting from scientific to economic diversions – modeling the economic harm that will purportedly result from controlling greenhouse gases (GHGs). But we’ve seen these scare tactics before. Removing lead from gasoline was going to bankrupt the oil companies. Requiring seatbelts would cripple auto sales. Acid rain, smog, and mercury controls would cause blackouts. Such claims weren’t believable then, and they’re not believable now. Besides, Congress should be guided less by economic models and more by economic reality. The on-the-ground experience of companies already cutting GHG emissions illustrates the opportunity for our national economy. Stonyfield Farm is a good example. We started calculating our carbon footprint in the early 1990s. With little more than our mission and elbow grease, our employees raced up the learning curve. Contrary to conventional wisdom about “low-hanging fruit,” we found that our list of innovation opportunities grew rather than shrank. Even after over a decade of effort, recent accomplishments astonish: each cup of Stonyfield yogurt required 19% less energy than in 2007, saving more than $500,000 per year. Packaging innovations shed 600,000 pounds of plastic, saving $780,000. Transportation GHG emissions dropped 40% from 2006 to 2008, saving $2.5 million. Building a digester to treat our wastewater converted an environmental concern into a source of clean energy, saving another $500,000 over two years. Our Greener Cow project even discovered how to cut GHGs from cows 12% and boost Omega-3′s 29%. More natural feed produces fewer cow burps, healthier cows, healthier milk, and healthier consumers – a classic “win-win-win.” All of these efforts have created or saved jobs. Stonyfield’s experience isn’t unique. Companies across the U.S. are finding cost savings and competitive advantage through efficiency. Nike reduced GHGs from its operations and travel by 18% from 1998 to 2005, despite an increase in square footage. Sun Microsystems reduced its U.S. GHG emissions 23% between 2002 and 2007. Gap Inc. sought to reduce its stores’ energy use by 11% from 2003 to 2008, and cut it by 12% by 2007. Timberland has targeted a 50% reduction in absolute GHG emissions by 2010 from 2006 levels. Wal-Mart’s new stores are expected to cut energy use by 30-50% and save five million gallons of water per year. Some big companies, like Dow and DuPont, have saved billions of dollars through efficiency since the early 1990s. As good as these efforts are, they need to go broader and deeper throughout the entire economy if we are to keep the Earth’s climate in check. That won’t happen on its own, so Congress should hasten to impose a market price signal on U.S. heat-trapping emissions. If Congress can’t get its act together promptly, then the U.S. Environmental Protection Agency needs to move ahead with regulating GHGs under the federal Clean Air Act. It’s also a critical time for the global economy. Successful companies and economies “retool” during downturns to boost future productivity. A wave of innovation and jobs in energy technologies is emerging. The resulting energy transition will likely echo or exceed the tectonic decentralizations we’ve already seen in computing and telephony. The investments that will lead this charge are already being made, but many other nations are already way ahead of us when it comes to aggressive energy and emissions reductions. Washington’s best contribution would be to “just say no” to fossil fuel interests by putting an appropriate price on carbon – right now. Then it should get out of the way of businesses that are striving to help our nation meet the opportunities of the 21st century. Morphing our energy system from its historical fossil focus to a new emphasis on efficiency, innovation, renewables, and distributed generation will provide innumerable new revenue sources and businesses, save money (and keep it closer to home), create millions of new jobs, enhance our global competitiveness, boost national security, and improve public health. What on Earth are we waiting for? Let’s get on with it. Gary Hirshberg is CE-Yo of Stonyfield Farm, the world’s leading organic yogurt company. Ken Colburn, who directs Stonyfield’s environmental policy efforts, also contributed to this piece.

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Climate Deal Is Fading as Obama, Brown, World Leaders Gather in Copenhagen

December 16, 2009

By Alex Morales and Jeremy van Loon Dec. 16 (Bloomberg) — World leaders will arrive in the Danish capital of Copenhagen over the next three days to agree on a pact to fight global warming. There may be nothing to sign. Envoys from China, the U.S., the European Union and India, the world’s top polluters, have bickered, quarreled and walked out during talks among 193 nations. They’ve left presidents and prime ministers a choice between a fudge or a flop for the accord that the United Nations framed as the most comprehensive deal to curb global warming. “Countries and blocks of countries have come here with very hard positions,” Guyana’s President Bharrat Jagdeo said yesterday in an interview in Copenhagen. “You need some seismic shifts to really close a deal.” The angst in conference rooms has been reflected on the streets, with protesters fighting riot police as Denmark mounted the biggest security operation in its history. More than half of Denmark’s 10,500 police are providing security for the talks at Copenhagen’s Bella Center, which can hold 15,000 people. The difficulty for the police is 46,000 people have tried to get into the talks in the city dubbed ‘Hopenhagen,’ leaving thousands waiting outside in freezing temperatures and yelling at security. “We’re calling it Constipagen because the line’s not moving and the talks are not moving,” said Jasmine Hyman, who works for the Geneva-based Gold standard Foundation that certifies carbon offsets. She said it took her eight hours to get in. Arrivals Speakers yesterday included Prince Charles , the heir to the U.K. throne, former U.S. Vice President Al Gore , who’s won an Oscar and a Nobel Peace Prize for his efforts to publicize the issue of global warming, and California Governor Arnold Schwarzenegger . U.K. Prime Minister Gordon Brown arrived late Tuesday, while Obama will arrive later in the week. Developing nations accused industrialized countries of trying to kill off the Kyoto Protocol, the current emissions- limiting treaty. Developed nations, including the U.S. and Japan, want to replace Kyoto with another treaty. “The biggest obstacle to progress is that first it has to be clear that the Kyoto Protocol can’t disappear,” Mexican Environment Minister Juan Rafael Elvira Quesada said in an interview in Copenhagen. The U.S., the largest industrialized emitter, never ratified the Kyoto pact, which sets no binding emission targets for developing nations, such as India and China. Disputes The disputes in Copenhagen stem from the division of the UN talks into two tracks: one to extend Kyoto’s binding emissions targets beyond 2012 for all developed nations bar the U.S., and another to establish what the world’s biggest economy and developing nations will do to cut their emissions. The 27-nation European Union, which is bound by Kyoto, has called for the two negotiating tracks to be merged in favor of a single legally-binding treaty, a call rejected by poorer nations. Other developed nations support a single deal. “The fundamental position of our government is that we are seeking a bigger comprehensive agreement than the Kyoto Protocol,” said Makio Miyakawa , the deputy director for global affairs at the Ministry of Foreign Affairs, in an interview on Dec. 14. “But the developing countries are still sticking to the Kyoto Protocol. And their position is very firm.” Other issues dividing delegates include the size of emission reductions by developed nations, verifying emission reductions by developing countries and climate aid worth $100 billion a year from rich to poor nations. Rejection The U.S. has rejected the demands of developing nations and most developed countries that it cut emissions more than its current goal of 17 percent from 2005 levels. China and India don’t want their national commitments to become legally binding in an international treaty. Japan, the EU and other developed nations still haven’t come forward to say how much money they’re prepared to fork out past 2012 to help poorer nations adapt to the consequences of climate change and lower their emissions. “This remains a very, very difficult process, and it could still fail,” said U.K. Energy and Climate Change Secretary Ed Miliband . “It was always going to be the case that the most difficult bits would get left to the end. I hope ministers can sort them out. Some of them may be left to leaders.” To contact the reporter on this story: Jeremy van Loon in Copenhagen via jvanloon@bloomberg.net ; Alex Morales in Copenhagen via amorales2@bloomberg.net .

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UN Climate Envoys Clash Over Funding for Poor Nations

December 15, 2009

By Alex Morales and Jim Efstathiou Jr. Dec. 15 (Bloomberg) — United Nations negotiators failed to agree on financial aid that industrialized nations such as the U.S. and Japan will give to the developing world for coping with climate change, threatening a global-warming accord. With China and India seeking about $200 billion a year for developing states, envoys are bargaining over options for aid beginning after 2012, each without financial commitments, according to a draft agreement released today. The talks among 192 countries end Dec. 18, and developing nations say they’ll reject an accord to curb global warming that has no money. “This is eyewash — it’s a paper tiger,” Quamrul Chowdhury , a Bangladeshi envoy who coordinates the group of Least Developed Countries on finance issues, said in an interview. “There is nothing in terms of long-term finance.” Conflicts have deepened as the two-week summit progresses, with more than 110 world leaders due to arrive over the next three days. Delegates from developing nations caused several hours’ delay yesterday after walking out of discussions, citing an attempt by richer countries to kill off the existing global warming treaty, the 1997 Kyoto Protocol . U.S. President Barack Obama and Chinese Premier Wen Jiabao , are due to arrive in the Danish capital on Dec. 16 to 18 to help seal an agreement to rein in emissions. U.K. Prime Minister Gordon Brown is due to arrive two days ahead of schedule, and Iranian President Mahmoud Ahmadinejad and Venezuelan leader Hugo Chavez are scheduled to attend. ‘In Positioning Mode’ “The real discussions begin in the next two or three days,” Andrew Deutz , director of international government relations at the Nature Conservancy, an environmental advocacy group in Arlington, Virginia, said today in an interview. “The signals that negotiators are sending here are still very much in the positioning mode for when the bosses come in.” China and India have both said developed countries should contribute at least an annual 0.5 percent of their economic output to developing nations to help them lower emissions and adapt to the effects of global warming, such as more severe droughts and higher sea levels. That amounts to about $200 billion a year at current levels. China criticized the most industrialized countries today and said they are threatening the success of the negotiations. Rich countries “have put forward a plethora of unreasonable requests to developing countries,” Chinese Foreign Ministry Spokeswoman Jiang Yu told reporters today in Beijing. “We believe this has a negative impact on the negotiations and will hamper the Copenhagen conference from achieving positive results.” $100 Billion Aid UN climate chief Yvo de Boer has said $100 billion to $300 billion a year in climate aid is needed. Developing countries including China and India will need as much as 100 billion euros ($145 billion) a year in climate aid from 2010 to 2020, New York-based McKinsey & Co. said in a September report. That’s to help them adapt to the effects of global warming and develop clean technologies to limit their own emissions. Two years of talks have repeatedly stalled amid clashes between rich and poor countries over aid, emission-reduction targets in developed countries and commitments to be made by industrialized nations to lower their own greenhouse gases. Deforestation Target The toughest issues at the talks in Copenhagen have been handed from country negotiators up to ministers, said Elliot Diringer , who oversees international strategies at the Pew Center on Global Climate Change, in Arlington, Virginia. Those include whether the agreement should aim to keep the global temperature increase from pre-industrial times to within 1.5 or 2 degrees Celsius, and climate aid, he said. Another issue being debated in Copenhagen is how the funds will be managed. Developing countries are pressing for the UN to have oversight of the funding rather than international institutions such as the World Bank and its Global Environment Facility agency, which they say doesn’t favor them. Draft portions of text seen by Bloomberg show that envoys are debating delaying decisions on how climate funds will be named, how they will operate, and how the UN will work with the Global Environment Facility until the next UN climate meeting in Mexico at the end of 2010. “We don’t even have the name, the function or anything: we have nothing,” Bangladesh’s Chowdhury said. “This is not a tolerant outcome.” The new negotiating text also includes a target to cut the rate of deforestation in developing nations 50 percent by 2020. Microsoft, Dow Chemical “I’ve been doing forest issues in UN process for 15 years,” said Deutz, “We’ve never gotten agreement on a global target.” More than two dozen U.S. companies including Dow Chemical Co., and Microsoft Corp., today urged Obama to deliver a climate agreement that includes “significant” reduction targets and “substantial” climate funding for developing countries. The companies signed a letter they delivered to Obama, according to Peyton Fleming , a spokesman for Ceres, a coalition of investors and environmental activists. “We must put the United States on the path to significant emissions reductions, a stronger economy and a new position of leadership to stabilize our climate,” according to the letter. “The costs of inaction far outweigh the costs of actions.” To contact the reporter on this story: Alex Morales in Copenhagen via amorales2@bloomberg.net ; Jim Efstathiou Jr . in Copenhagen at jefstathiou@bloomberg.net .

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Envoys Clash Over Climate Aid in Denmark Before Obama, Ahmadinejad Arrive

December 15, 2009

By Alex Morales and Jim Efstathiou Jr. Dec. 15 (Bloomberg) — United Nations negotiators failed to agree on financial aid the U.S., Japan and industrialized nations will give to the developing world to cope with climate change, according to a draft document. The blueprint, released today in Copenhagen, outlines three options for long-term climate aid from developed to developing countries, none of which includes any financial commitments. Developing countries say aid is crucial to a global warming agreement that 192 nations aim to agree on by Dec. 18 at the UN climate change conference in Copenhagen. “This is eyewash — it’s a paper tiger,” Quamrul Chowdhury, a Bangladeshi envoy who coordinates the group of Least Developed Countries on finance issues, said in an interview in Copenhagen. “There is nothing in terms of long- term finance.” The talks, which began two years ago, have repeatedly stalled amid clashes between rich and poor countries over emission-reduction targets in developed countries, commitment to be made by developing nations to lower their own greenhouse gases and aid to poorer states. The toughest issues at the talks in Copenhagen have been handed from country negotiators up to ministers, said Elliot Diringer , who oversees international strategies at the Pew Center on Global Climate Change, in Arlington, Virginia. Those include whether the agreement should aim to keep the global temperature increase from pre-industrial times to within 1.5 or 2 degrees Celsius, and climate aid, he said. More than 110 world leaders, including U.S. President Barack Obama and Chinese Premier Wen Jiabao are due to arrive in Copenhagen Dec. 16 to 18 to help seal an agreement to rein in emissions of global warming gases. To contact the reporter on this story: Alex Morales in Copenhagen via amorales2@bloomberg.net ; Jim Efstathiou Jr . in Copenhagen at jefstathiou@bloomberg.net .

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Copenhagen Fools the Young Into Hoping for Jobs: Amity Shlaes

December 7, 2009

Commentary by Amity Shlaes Dec. 8 (Bloomberg) — Youth is what the climate change conference in Copenhagen is supposed to be all about. The advertising campaign for the United Nations Climate Change Conference on global warming that opens this week is even called “ Hopenhagen ,” to suggest that young people need to push their governments to save the Kyoto Treaty if they are going to prevent environmental apocalypse. One reason that Hopenhagen has caught on is that youth fashion these days is as green as it gets. Copenhagen, thrift and handbags made of recycled seatbelts all go together in the under-30 mind. At Williams College in Massachusetts, some 50 students and faculty started a hunger strike to show their support for a climate-change agreement. UCLA students who are attending Copenhagen with their professor have called the event a “rock concert for climate geeks.” The missing part of that message is that environmental accords like Kyoto can actually kill hope of a more mundane kind, like the hope for a job. And that’s especially true when it comes to the darlings of the UN campaign: the young. The reason this is so predates plans for Copenhagen or even the green movement. Employers tend to rehire or hire others before the young, and lay off or fire young workers when job- cutting time comes. There’s also an issue of hope, to use the Copenhagen lexicon. Employers doubtful of the economic future are reluctant to make a commitment to someone who expects to enjoy long-term employment at the workplace. Cutting Mode And what puts employers in lay-off mode? Recession for certain, but also any factor that makes production more expensive. Dozens of studies, for example, have demonstrated that just one such cost increase, the raising of the minimum wage, hurt hiring or employment of younger workers in the U.S. And that’s true elsewhere. In a multidecade survey of 19 countries, authors Juan F. Jimeno and Diego Rodriguez Palenzuela found that minimum-wage rules, along with high taxes, depress youth employment. High-tax Denmark’s joblessness is well below that of the U.S., but Denmark is also among the nations where youth unemployment ranges higher than unemployment of other workers. You can imagine that some Danes feel fairly hopeless about this. In economic terms, a mandate such as Kyoto’s isn’t different from a tax or a minimum wage. It hurts employment. The current cap-and-trade legislation is so structured that the pain comes not in the initial years, when the regime begins, but later, when restrictions for firms are more formidable. Prime Time The real blows come by 2030 — a period irrelevant for many older workers, but a prime earning period in the future of Copenhagen’s youthful attendees. Margo Thorning at the American Center for Capital Formation, a Washington policy research group, ran the numbers on the American Clean Energy and Security Act of 2009, sponsored by Democratic congressmen Henry Waxman and Edward Markey . She found that this legislation could kill as many as 2.4 million U.S. jobs by 2030, just about when today’s Copenhagen youth will be paying for their children’s college. That includes some jobs in Massachusetts, home to Williams College, and 220,000 to 300,000 in California, where UCLA is located. Countries such as Denmark are in many ways greener than the U.S., and the presumption of American college students is that that means such countries are inherently better. That confidence might be shaken by news that in Denmark, the low unemployment rate notwithstanding, the number of unemployed Danes who don’t find work for a year or more has been around two in 10 in the past decade, while in the U.S. the rate was about one in 10. Unfair Trade Defenders of cap-and-trade would argue that billions in revenue the government receives under the law can make up to the poor what they lose in jobs. But it’s hard to imagine the tax break of $359 per household, the proposal in one bit of legislation, compensating for a lost job. It is possible that forgoing those jobs is a social choice this country has made as a collective. When Americans elected Barack Obama , not John McCain , they might have been saying: we care less about improving the economy than we do about social or lifestyle improvements. Economists track such collective choices using something called the Environmental Kuznets Curve , which suggests countries choose to be greener as they become wealthier. Conscious Choice But the question this time is whether that choice is being made consciously. One senses that being green to college or high school students tends to mean buying that recyclable messenger bag, not doing without the salary that enables you to buy the bag. You can hardly fault them for being unaware of trade-offs, bombarded as they are by teachers, their government and YouTube with the message that the greening of America offers pure advantage. As Denmark’s own environmental skeptic, Bjorn Lomborg , has argued, the point here isn’t to say that carbon emissions don’t do damage. They do. The point is that Kyoto is, as Lomborg put it, “an incredibly bad deal” when you compare the pluses and minuses. The future can’t be all Hopenhagen. It has to be Hope- for-Jobs as well. ( Amity Shlaes , senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.) To contact the writer of this column: Amity Shlaes at amityshlaes@hotmail.com

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Carbon Dioxide Declared Hazard by U.S. EPA, Paving Way for Tighter Rules

December 7, 2009

By Jim Efstathiou Jr. and Kim Chipman Dec. 7 (Bloomberg) — The U.S. Environmental Protection Agency will declare carbon dioxide a health hazard today, paving the way for limits on emissions from sources such as power plants and factories, people familiar with the matter said. The move, on the opening day of an international climate summit in Copenhagen, arms President Barack Obama with new regulatory powers that could help forge consensus in efforts to curb global warming. EPA Administrator Lisa Jackson “will make a significant climate announcement” today, the agency said in a statement. The people requested not to be identified discussing the announcement in advance. Unleashing the EPA to set emissions rules will give Obama standing when asking other nations to make commitments for a new global climate treaty, said Kevin Book , a Washington-based managing director for analysis firm ClearView Energy Partners LLC. Obama now plans to visit Copenhagen at the close of the talks on Dec. 18, when other world leaders will be there, rather than this week. “It’s exactly what you would want to have in your bag on the way to Copenhagen,” Book said in an interview today. “You can’t go and argue for other nations to make changes if you haven’t made any yourself.” Autos, Factories The EPA rules will govern heat-trapping pollution that many scientists say may lead to disruptive and irreversible climate shifts. The Washington-based America Petroleum Institute , which represents oil companies, said today the EPA rules will be “inefficient and excessively costly.” The National Petrochemical and Refiners Association, also based in Washington, said the proposed new rules are based on “selective science.” “The implications of today’s action by EPA are far- reaching, Charles Drevna , president of the refiners group, said in a statement. “This is yet another example of federal policy makers failing to consider the long-term consequences of a regulatory action.” The first regulations under a finding that carbon dioxide is dangerous will be made final on March 10, and will cover emissions from cars and trucks beginning with model year 2012, said David Doniger , policy director for the climate center of the Natural Resources Defense Council, an environmental group based in New York. Automakers signed on to that plan, announced in May. After that, the EPA is expected to begin writing emissions rules for factories, power plants and other stationary pollution sources, Doniger said. The agency has said it would regulate only facilities that produce 25,000 tons of CO2 a year or more. Best Technology The rules are expected to require polluters to use the best available technology to limit emissions of CO2 and other greenhouse gases, Doniger said. The agency can take months or years to complete regulations. White House press secretary Robert Gibbs announced on Dec. 4 that Obama will show up for the conclusion of the talks in Copenhagen, when about 100 heads of government are going, and help guide decisions. Earlier Obama had planned to stop by on Dec. 9. “There is progress toward a meaningful Copenhagen accord,” Gibbs said. The U.S., the world’s second biggest emitter of greenhouse gases, is in the spotlight at the talks in part because lawmakers haven’t approved legislation to set a mandatory limit on carbon-dioxide gas that many scientists say could lead to dangerous climate shifts if left unchecked. “To have this come out now is another concrete sign that the Obama administration is joining the fight on global warming,” Doniger said of EPA rules. Chamber of Commerce The U.S. Chamber of Commerce, the nation’s biggest business-lobbying group, says EPA regulation of carbon would be “burdensome” to businesses and hurt the economy. Chamber President Tom Donohue has said the Washington-based agency, whose top administrator is chosen by the White House, was basing its proposed finding on “shaky, cherry-picked data.” The U.S. House passed legislation in June to cap carbon emissions and set up a market for the trading of pollution allowances. The Senate has yet to act. Lack of guidance from the Senate, the only U.S. body authorized to ratify treaties, left Obama’s negotiators in Denmark without firm guidelines on how to proceed. The administration’s use of the EPA to regulate greenhouse gases under existing law provides a “primary catalyst” for Congress to act, Book said. “The administration’s climate strategy has resembled a coordinated “good cop, bad cop’ routine where Hill Democratic Party leaders (the ‘good cop’) offer new law as a way to prevent EPA’s ‘bad cop’ from imposing economy-wide regulations on lawmakers’ constituents,” Book said in a research note. EPA officials didn’t return calls seeking comment. To contact the reporters on this story: Kim Chipman in Copenhagen at kchipman@bloomberg.net ; Jim Efstathiou Jr . in New York at jefstathiou@bloomberg.net .

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Pachauri Defends UN Climate Science as E-Mail Leak Raises Accuracy Concern

December 7, 2009

By Alex Morales and Kim Chipman Dec. 7 (Bloomberg) — Rajendra Pachauri , the top United Nations climate-change scientist, said the panel he heads is “transparent and objective,” dismissing allegations by global- warming skeptics that UN data were manipulated. The UN Intergovernmental Panel on Climate Change concluded in 2007 that global warming is “unequivocal” and rising human greenhouse-gas emissions were “very likely” the main cause. E-mails stolen from computer servers of the University of East Anglia in England and posted worldwide on blogs show climate researchers discussed keeping some scientific papers out of the IPCC’s report, which has formed the basis for two years of UN-led climate-treaty talks among 192 nations. The university has said the e-mails were taken out of context and that allegations about manipulation are unfounded. Speaking today during the opening session of the global summit in Copenhagen that aims to devise a deal to fight climate change, Pachauri said he had confidence in his panel’s work. The IPCC’s report is “based on measurements made by many independent institutions worldwide that demonstrate significant changes on land, in the atmosphere, the oceans and in the ice- covered areas of the earth,” he said. The study was subject to “extensive and repeated review by experts as well as governments,” with 2,500 expert reviewers, Pachauri said. Skeptics of man’s contribution to global warming, including former Senate Environment and Public Works Committee staff member Marc Morano , have cited the e-mails as evidence of a conspiracy to manipulate findings about climate change. U.S. Senator James Inhofe , a Republican from Oklahoma, has called for hearings to determine if taxpayer-funded research was altered. In one of the e-mails, Phil Jones , professor of the University of East Anglia’s Climatic Research Unit, talks about working to keep some scientific papers out of consideration for inclusion in the IPCC report, “even if we have to redefine what the peer-review literature is.” Jones has since stepped down from his role pending the outcome of an investigation. “The internal consistency from the multiple lines of evidence strongly supports the work of the scientific community, including those individuals singled out in these e-mail exchanges,” Pachauri, 69, said. The IPCC assessment process “is designed to ensure consideration of all relevant scientific information from established journals with robust peer-review processes,” Pachauri said. “There is full opportunity for experts in the field to draw attention to any piece of published literature.” To contact the reporter on this story: Alex Morales in Copenhagen via amorales2@bloomberg.net Kim Chipman in Copenhagen at KChipman@bloomberg.net

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Clean Power Defies Copenhagen Failure as Investment May Top $200 Billion

December 3, 2009

By Jim Efstathiou Jr. Dec. 3 (Bloomberg) — Renewable-energy investment may climb to a record $200 billion worldwide next year as companies from Hong Kong’s CLP Holdings Ltd . to American Electric Power Co. start projects that don’t depend on a new climate-change treaty. Private and public spending on technology such as solar panels and wind turbines will rise about 50 percent from $130 billion this year and top the previous high of $155 billion in 2008, according to Michael Liebreich , chairman of London-based New Energy Finance, a consulting firm whose data is used by the United Nations and Deutsche Bank AG . World leaders who meet in Copenhagen starting next week have said they’ll miss their goal of completing a treaty to limit carbon-dioxide emissions and foster clean-energy production. Companies and investment funds are increasing spending anyway in anticipation of an eventual accord and in response to government funding, regulations and public support. “Most of us are moving in that direction and it really isn’t dependent on Copenhagen,” Michael Morris , chief executive officer of American Electric, the biggest U.S. producer of electricity from coal, said in an interview. Government spending on green energy will more than double from this year to about $60 billion in 2010, Liebreich said. The U.S., China and 10 other nations have approved a total of $177 billion in stimulus funding for green energy over several years, he said. ‘Renaissance Time’ “It’s been a convergence of a number of drivers that are creating what we consider to be the renaissance time in the clean-tech sector,” said Ira Ehrenpreis , general partner with Technology Partners , a Palo Alto, California-based clean energy investment fund with about $700 million under management. “A clean-tech company has the world as its customer base.” CLP, Hong Kong’s biggest electricity supplier, is aiming to reduce carbon-dioxide emissions by about 75 percent by 2050. The company is building a $903 million offshore wind farm. “Regardless of the outcome at Copenhagen, we’re moving ahead to meet our intermediate target of having 20 percent of our generating capacity coming from non-carbon emitting sources by 2020,” CLP’s CEO Andrew Brandler said in an e-mail. Columbus, Ohio-based American Electric said this year it will buy 2,000 megawatts of wind power by the end of 2011, double its original goal, to meet state renewable-energy requirements and company targets, according to Bruce Braine , a vice president with the utility. One megawatt is enough to power about 800 U.S. homes. Paying a Premium “You’re paying a premium relative to alternatives like coal or gas, but once you get them in place, particularly for wind or solar, the nice thing is that the energy is almost free,” Braine said. European and U.K. requirements are shaping decisions by London-based National Grid Plc , manager of Britain’s power- transmission network, according to Nick Winser , the company’s executive director for transmission. “That work will go on, whatever happens in Copenhagen, but all of that worthy leadership that has been shown on this topic sooner or later has to be underpinned by global targets,” Winser said. About 190 nations will meet in Copenhagen from Dec. 7 to 18 to set a framework for a treaty to curb emissions of global- warming gases. Completion of an accord at the meeting is out of reach, U.S. President Barack Obama and other leaders said at a conference in Singapore last month. United Nations Secretary General Ban Ki-Moon said the sessions may lead to a completed treaty next year. Regulation Flurry “Country by country, state by state, regulations will continue to spur demand independent of what might happen in Copenhagen,” said Joe Muscat, director of clean technology at New York-based Ernst & Young LLP. Worldwide, 250 climate-change regulations were enacted from July 2008 to February, including 54 in the U.S. and 25 in China, Ernst & Young said in a Nov. 17 report . More than 30 U.S. states require utilities to include renewable energy in their power portfolios. Government policies alone won’t stimulate enough investment to avoid the worst impacts of climate change, such as higher sea levels and more severe droughts, the International Energy Agency said in a November report. Additional spending must reach $430 billion a year by 2020 to reach a 50 percent chance of keeping the increase in global temperatures within 2 degrees Celsius (3.6 degrees Fahrenheit) of pre-industrial times, the Paris- based agency said. NRG’s Wind Power Completion of a treaty would boost spending because companies and investors would gain certainty about penalties on polluting and incentives for alternative energy, said Christian Kjaer , CEO of the Brussels-based European Wind Energy Association. “You’re already seeing a shift, and with an international agreement that change in investors’ behavior will come faster,” Kjaer said. NRG Energy Inc ., the second-largest power producer in Texas, plans to spend $2 billion on renewable power over the next six years, according to CEO David Crane . Princeton, N.J.- based NRG, which has invested $400 million on wind power in Texas, will take advantage of government spending, he said. “The stimulus is just an enormous boost,” Crane said. Technology is lowering the cost of solar cells and wind turbines, said Jeffrey McDermott , the former co-head of investment banking at UBS AG who in 2008 started Greentech Capital Advisors LLC to advise and raise money for alternative- energy companies. A treaty “would certainly be helpful, but it is not going to stop capital from being put to work,” McDermott, managing partner of New York-based Greentech said. “Technological progress and the ability to scale and lower costs are surprising everybody in the industry.” China Tops U.S. Clean-energy development isn’t flowing to all countries equally, according to an October report from Deutsche Bank. Investment risks are lower in countries such as China and France that offer stronger incentives. Investors spent $16.7 billion on clean energy in China in 2008, excluding stimulus funds, topping the U.S. total of $15.2 billion for the first time, said Jesse Jenkins, director of energy and climate policy at the Breakthrough Institute , an Oakland, California-based consulting firm. Wind-energy producers in China get a premium for the electricity they supply to help make it competitive with cheaper power from burning coal or natural gas, he said. U.S. companies are falling behind in clean technology because the country lacks a binding limit on carbon emissions, as would be required under a global treaty, said Ralph Izzo , CEO of Public Service Enterprise Group Inc ., the owner of New Jersey’s largest utility. “We are in conversations about a range of carbon-friendly technologies,” Izzo said. “And the suppliers we talk to are from China, Japan and France.” To contact the reporter on this story: Jim Efstathiou Jr . in New York at jefstathiou@bloomberg.net .

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Reducing Long-Term Budget Deficit `Foremost’ in Obama’s Mind, Emanuel Says

November 17, 2009

By Mike Dorning Nov. 17 (Bloomberg) — A plan for reducing America’s long- term federal budget deficits will be “a key component” of President Barack Obama’s annual State of the Union address in January, according to White House Chief of Staff Rahm Emanuel . “It is foremost on his mind and the mind of the economic team,” Emanuel said of deficit reduction in comments yesterday at the Wall Street Journal’s CEO Council conference in Washington. The federal deficit for the fiscal year that ended Sept. 30 reached a record $1.4 trillion, or about 10 percent of the gross domestic product, amid falling tax revenue from the recession, a bailout of the banking and auto industries, and the $787 billion economic stimulus package Obama pushed through Congress in February. Projections of federal budget deficits as high as 4 percent of GDP in 2019 from the U.S. Office of Management and Budget have added to political and market concerns about the nation’s long-term finances. Emanuel predicted that even as the administration grapples with deficit reduction, Obama would succeed in winning congressional passage of key elements of what the president has called his “new foundation” for the country. “I think there’s no doubt they’ll achieve it,” Emanuel said. “All three: health-care, financial and energy-policy reform.” Nuclear Energy Emanuel also said nuclear energy would play a role in the country’s response to climate change. “You can’t get from here to there on global warming if you don’t have a theory of the case as it relates to nuclear power,” Emanuel said in answer to a question from the audience of business executives. “We’re in the middle of negotiations now on the loan agreements as it relates to what the United States government can do to help build nuclear power plants,” he said. “And hopefully in short order you’ll see some announcements in that space. That has not happened in recent times.” The Energy Department has narrowed a list of companies that would qualify for $18.5 billion in loan guarantees for nuclear plant construction to Atlanta-based Southern Co ., Baltimore-based Constellation Energy Group Inc ., Princeton, New Jersey-based NRG Energy Inc . and Cayce, South Carolina-based Scana Corp . The guarantees provide federal financial backing to build the facilities, which don’t cause emissions of greenhouse gases tied to global warming. To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net

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GE Enlightening China Regions Embracing Emissions Plants to Curb Pollution

November 17, 2009

By Bloomberg News Nov. 17 (Bloomberg) — The Ordos region of Inner Mongolia, home to one of China’s biggest deserts, is being transformed into the site of a pine forest that will stretch across its low hills as far as the eye can see. The local government’s tree-planting program is part of a plan to “assume our green responsibilities and build a civilized way of life,” Du Zi , the local Communist Party secretary, told energy executives at a conference last month in Beijing. Also on tap: the world’s biggest plant to convert sunlight to electricity, built by First Solar Inc. of Tempe, Arizona, part of a 12-gigawatt wind, solar and biomass power-generating zone. And General Electric Co. is helping China cut wastewater emissions into the Yellow River, which borders the region. “This shows what local leadership can do in China these days,” says Kenneth Lieberthal , head of the Brookings Institution’s China Center in Washington, which hosted Du and other provincial officials at the Oct. 21-23 conference. “They’ve gone flat out.” Regions are vying to outdo each other in a race to develop alternative-energy sources and cut pollution. Western China’s Gansu province is building a wind farm equivalent to about 20 nuclear-power facilities. In the east, Zhejiang province is installing solar panels on roofs. Beijing bans motorcycles from the city center in favor of electric bikes. Greenhouse Gases Their efforts demonstrate that China, the world’s largest producer of the pollution blamed for global warming, will continue to accelerate development of energy from renewable sources, even as it resists binding targets for reducing carbon emissions ahead of a United Nations summit in Copenhagen next month aimed at forging a new treaty to curb greenhouse gases. Some regional officials see environmental projects as a way to boost their economies after decades when companies were allowed to poison the air and water without penalties while expanding output. And First Solar surged $12.94, or 11 percent, to $134.41 on the Nasdaq Stock Market Sept. 8, the day Wu Bangguo , China’s second-ranking leader after President Hu Jintao , visited the company’s headquarters. The next day the company made the Ordos agreement public; it has declined to provide the value of the deal. First Solar has fallen about 11 percent since Dec. 31. Du, 54, cites a list of achievements in Ordos: increasing the portion covered by vegetation to 81 percent last year from 20 percent in 2000, closing 1,200 polluting factories and installing 100 megawatts of wind capacity. Biggest Wind Farm The 20-gigawatt, 120 billion yuan ($17.6 billion) Gansu project, set for completion in 2020, would be the world’s biggest wind farm. The Roscoe Wind Complex in Texas, currently the largest, generates less than one gigawatt — a billion watts — of electricity. China is under pressure from the international community to accelerate its push toward alternative energy. It has refused to accept binding restrictions on carbon pollution, saying controls will crimp economic growth. Instead, China has pledged to cut emissions voluntarily in proportion to gross domestic product, without committing to include the policy in a global agreement. Hu called climate change “a grave challenge to mankind” and pledged to work for “positive outcomes” in Copenhagen during a speech Nov. 15 at the Asia Pacific Economic Cooperation forum in Singapore. Hu-Obama Talks Collaboration between the U.S. and China on alternative energy is on the agenda for talks this week in Beijing between Hu and President Barack Obama . Such ventures are already under way in Ordos, Du says. Fairfield, Connecticut-based GE, the world’s biggest maker of power-plant equipment, is working with Elion Chemical Industry Co. of Ordos City to cut wastewater discharge in a project GE said is slated to be completed next year. The value of the contract isn’t disclosed, said Catherine Stengel , a spokeswoman for the Atlanta-based GE Energy Infrastructure unit, of which the water division is a part. First Solar, the largest U.S. producer of solar modules, is looking for more business following the planned groundbreaking next year of the new photovoltaic facility. Today in Beijing, U.S. Energy Secretary Steven Chu and Chinese Vice Premier Li Keqiang attended a signing ceremony with the company, which confirmed the June 1, 2010 start date for the Ordos project. ‘Very Rapidly’ The Chinese government seems “to be moving very rapidly,” First Solar President Bruce Sohn told reporters in Beijing. “We don’t see any roadblocks to prevent us from starting construction” in June. Sohn said a similar solar plant in the U.S. would cost between $4 billion and $5 billion. In China, the price will probably be “somewhat lower,” he said, without elaborating. The Bloomberg World Energy-Alternate Sources Index has risen 21.5 percent in the last year, compared with a 27 percent rise in the Standard and Poor’s 500 Index . Ordos, among the nation’s wealthiest areas, has the means to push big, government-backed projects. It claims one-sixth of China’s proven coal reserves and one-third of its natural gas, giving the region of 1.6 million people a per-capita income of 102,128 yuan, the third highest of any municipality. Hu is signaling he is serious about changing China’s energy mix. The goal is to produce 15 percent from renewable sources by 2020, according to a 2006 energy law . China will see an even greater push by provinces and cities if the Communist Party begins to reward and promote officials on the basis of their ability to promote alternative energy, says John Thornton , a former co-president of New York-based Goldman Sachs Group Inc. who’s now chairman of Brookings and co-hosted the October conference in Beijing. “China is really quite an impressive, well-oiled machine in its ability to do large-scale things decisively,” he says. — Michael Forsythe . With assistance from Rachel Layne in Boston. Editors: Melinda Grenier , Bill Austin To contact Bloomberg News staff on this story: Michael Forsythe in Beijing at +8610-6649-7580 or mforsythe@bloomberg.net

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Schumer Urges Obama to Block Stimulus Funds for Chinese-Backed Wind Farm

November 5, 2009

By Kim Chipman Nov. 6 (Bloomberg) — The Obama administration should bar a $1.5 billion wind-farm project in Texas from receiving U.S. government stimulus funds because most of the power turbines would be made in China, Senator Charles Schumer said. “The idea that stimulus funds would be used to create jobs overseas is quite troubling,” Schumer, a New York Democrat, wrote in a draft of a letter he said yesterday he would send to U.S. Energy Secretary Steven Chu . “I urge you to reject any request for stimulus money unless the high-value components, including the wind turbines, are manufactured in the United States.” U.S. Renewable Energy Group , a private-equity firm based in Washington, and Cielo Wind Power LP, a closely held company in Austin, Texas, said last week they formed a joint venture with China’s Shenyang Power Group to build the 600-megawatt wind farm. The 36,000 acre-project marks the largest Chinese-American investment in U.S. renewable energy, the companies said. A-Power Energy Generation Systems Ltd. of China, Shenyang’s largest shareholder, is set to supply turbines for the farm, the companies said. The Democratic senator said he was “furious” when he learned that $450 million in U.S. economic recovery aid may be used to help build the wind farm and create as many as 3,000 jobs, mostly in China. “I don’t care if the Chinese invest here and create jobs here: It’s where the jobs are that I care about,” Schumer told reporters yesterday in Washington. “I think if you told the other 99 senators about this the vast majority would agree with me.” Climate Challenges “China and the U.S. enhancing cooperation on clean energy serves the common interests of the two countries and welfare of their peoples, which is also significant for commonly tackling the challenges posed by climate change,” said Wang Baodong , a spokesman for the Chinese Embassy in Washington. “We hope that people in question will do more to help facilitate the joint effort instead of complicating the situation.” Cielo President Walt Hornaday said the project will boost hiring in the energy industry and benefit people in Texas. He also said international joint ventures are “essential to the development of low-cost renewable energy” in the U.S. and that the project can’t happen without help from the U.S. economic stimulus package. “Without this incentive, wind projects will wait in the sidelines for energy prices to come back to the levels we saw a few years ago,” Hornaday said in a statement. “This could be next year or this could be next decade.” Economic Stimulus The Texas venture will be funded by Chinese banks as well as take advantage of financing through the U.S.’s $787 billion economic stimulus law, Cappy McGarr , managing partner of U.S. Renewable Energy Group, said at a news conference in Washington last week. Spokesmen for U.S. Renewable Energy Group, Shenyang Power Group and A-Power Energy Generation Systems weren’t available to comment. An Energy Department spokeswoman, Stephanie Mueller , said any application for the Texas project to benefit from a tax credit program under the stimulus would have to be “evaluated by the Energy and Treasury departments to determine eligibility.” “But no application has been received to date,” she said in a statement. Leaders to Meet President Barack Obama is preparing to meet later this month with Chinese President Hu Jintao . Energy will be a top issue as both countries say they want to bolster cooperation on clean-energy technology and help clear the way for a new global treaty to fight climate change. The countries remain at odds over how far developed and developing nations should go in attempts to curb greenhouse-gas emissions blamed for global warming. Legislation to curb carbon emissions has passed the U.S. House and is being debated in the Senate. Democratic senators including Sherrod Brown of Ohio sent a letter to Obama in August saying it would be “extremely difficult” to support a climate bill that doesn’t include a tariff on products from countries such as China that don’t impose limits on global warming pollution. Legislation Possible Schumer said he would pursue legislation if necessary to prevent stimulus funds from being used for the Texas project, though he said he’s “hopeful” the Obama administration will “change the policy.” He said it was “counterproductive” for the U.S. to invest federal funds in Chinese companies. Energy Secretary Chu and other administration officials have said the U.S. is in danger of falling behind China in a competition to dominate the global market for clean-energy technology. “China is fast emerging as one of our main rivals in the race to build the technology that can help us achieve energy independence,” Schumer said yesterday in a statement. “We should not be giving China a head start in this race at our own country’s expense.” The Obama administration has not been tough enough in negotiations with China on a wide range of issues, including trade, according to Schumer. “They don’t play fair,” he said yesterday, referring to China. “One of the many reasons we had the financial collapse that we had is because China manipulated its currency,” Schumer said. He said the U.S. should be “a lot tougher” on China. The Alliance for American Manufacturing, a Washington-based coalition of steel companies and the United Steelworkers union, also have criticized the wind energy project. “Why aren’t American firms building this clean-energy project?” the group asked in a Nov. 2 statement. To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net .

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Deforestation Loses Ground to Fossil Fuels as Carbon-Emissions Culprit

November 5, 2009

By Catherine Airlie Nov. 5 (Bloomberg) — Deforestation’s relative contribution to global carbon emissions has declined as pollution from fossil fuels increased, according to a researcher at the faculty of earth and life sciences at VU University in Amsterdam. The removal of trees that can absorb carbon dioxide may now account for around 12 percent of global carbon emissions from human activities, according to a study led by Guido van der Werf and published in the academic journal Nature Geoscience. While forest destruction still causes “high emissions,” the “perspective has changed,” van der Werf said by telephone. “Carbon emissions from fossil fuel combustion have increased substantially” the article in Nature Geoscience said. That makes “the relative contribution from deforestation and forest degradation even smaller.” The Intergovernmental Panel on Climate Change estimated in 2007 that deforestation was responsible for 20 percent of greenhouse gas blamed for global warming. Almost 200 nations that will meet next month in Copenhagen have yet to agree on what role forests should play in a climate treaty intended to extend or replace the 1997 Kyoto Protocol. Van der Werf’s study could potentially allay concerns about an oversupply of forest credits in carbon markets. The study reflected a lower deforestation rate than the Intergovernmental Panel due to more detailed satellite imagery showing tree coverage. His research also said that “notable” CO2 is released by the destruction of peatlands, areas of partially decaying vegetation that covers around 2 percent of the world’s surface. Peatland destruction is responsible for 3 percent of human induced CO2 emissions and should be included in Copenhagen negotiations, the report said. “Negotiations should strive to be as inclusive as possible,” Van der Werf said. Carbon dioxide produced by destroying both peatlands and forests may account for around 15 percent of total carbon emissions, the study concluded. To contact the reporter on this story: Catherine Airlie in London at cairlie@bloomberg.net

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Republican Victories May Make Democrats Cautious on Backing Obama’s Agenda

November 4, 2009

By Jonathan D. Salant Nov. 5 (Bloomberg) — Republican victories in the New Jersey and Virginia gubernatorial races may make some congressional Democrats more leery of backing key elements of President Barack Obama’s agenda because of the political price they could pay, analysts said. Democrats in competitive House districts, many of them already cautious about Obama’s push to overhaul the U.S. health- care system and curb emissions blamed for global warming, might be more resistant to move ahead on the measures and face attacks from a newly energized Republican Party, the analysts said. The Nov. 3 election results are “a real warning bell for moderate Democrats,” said Tobe Berkovitz , associate professor of communications at Boston University. “They are not going to think twice about their vote on health care. They’re going to think five times.” David Primo , a political science professor at the University of Rochester in New York, said Democrats in competitive districts may demand more concessions in exchange for their votes on contentious legislation. The election “may make it harder to swing moderates on the fence in favor of Obama’s proposals, for fear of being made examples in the midterm elections,” Primo said. “The results may increase the price those on the fence charge for their support.” Market Reaction A rally in health-care stocks followed the Republican victories. Those equities in the Standard & Poor’s 500 Index rose 1.3 percent yesterday, highest among 10 industries. Deutsche Bank AG analysts told clients that some moderate Democrats “may start to push back harder against some of the most progressive elements” of the House’s health-care bill or risk being defeated next year. House Speaker Nancy Pelosi , citing Democratic wins in races for open congressional seats in New York and California, said yesterday she would move forward on the health-care measure, with a vote possible before week’s end. Pelosi, a California Democrat, said that “from my perspective, we won” with the election of Bill Owens in an upstate New York district Republicans had controlled for a century and California Lieutenant Governor John Garamendi in a Democratic-leaning district in the San Francisco Bay area. The two victories increased the Democrats’ House majority to 258-177. The House measure would offer subsidies to help people buy insurance, require that all Americans have coverage and establish a public plan to compete with private insurers. Democratic consultant Peter Fenn said that rather than balk at Obama’s agenda, his party’s lawmakers should worry about losing their offices if they don’t pass legislation. ‘Party of No’ “The biggest problem the Democrats will have next year is if they don’t deliver,” Fenn said. If the 2010 campaign becomes “a referendum on what the Democrats have accomplished and you have paralysis, I wouldn’t want to be the Democrats who joined the Party of No,” he said. “There is an overreaction to the results,” said James Thurber , director of American University’s Center for Congressional and Presidential Studies in Washington. He predicted the Nov. 3 election would “mean very little or nothing to health care, climate change or the rest of Obama’s agenda.” The Senate is drafting legislation to reduce greenhouse-gas emissions. The House in June voted to curb such emissions by 17 percent from 2005 levels by 2020. Independent Voters Exit polling of voters by CNN in the New Jersey and Virginia races showed that self-described independents, who supported the Democrats in 2008, swung by large margins to the Republicans this year. Some analysts focused on this as a concern for Democrats. “What you’re seeing now is a severe peeling away of independents and even more critical suburban voters,” Berkovitz said. “You have to pay attention to it.” Most analysts and spokesmen for both parties said they didn’t view the election results as a verdict on Obama. “I don’t think it’s so much a referendum on the president,” Republican National Chairman Michael Steele said at a press conference yesterday. White House spokesman Robert Gibbs said New Jersey and Virginia voters were motivated by “very local issues that didn’t involve the president.” The CNN polls found that 60 percent of New Jersey voters and 56 percent of those in Virginia said Obama didn’t figure into their ballot decisions. Asked about poll findings that the economy was the top issue in both states, Gibbs said, “I don’t think the president needed an election or an exit poll to come to that conclusion.” Candidate Recruitment The election could have an immediate impact on Republican recruitment of candidates for next year’s races. “Republicans who are on the fence, good quality guys and women, might jump in now,” party consultant Eddie Mahe said. More than half of the 54 Republicans first elected to the House in 1994, which ended 40 years of Democratic control of the chamber, didn’t decide to run until after the party swept the New Jersey and Virginia gubernatorial races in 1993, according to Republican officials. “There has been a bit of a rehabilitation of the Republican brand,” Democratic consultant Glenn Totten said. Even so, he said, Republicans in 2010 “are still going against what I think is a fairly uphill battle in most of these cases.” — Editors: Don Frederick , Dave McCombs . To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net .

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Sen. Bernie Sanders: The Environment and the Economy

October 30, 2009

Senator Sanders Unfiltered is a weekly web program produced by Brave New Films . Stay up-to-date with “Unfiltered” on Facebook . Follow Bernie on Twitter . Good environmental policy is good economic policy . We are not only helping to save the planet in terms of global warming, we are also moving to get this country out of the economic crisis that we are in right now. Are we making some progress? We really are. In the stimulus package , for example, we are spending more money on energy efficiency and sustainable energy then in the history of the United States of America. We certainly have moved far more aggressively in the last year then Bush did in eight years. Here is what I think we have got to do. I think the low-hanging fruit and a real job creator is energy efficiency . As we struggle with the most significant economic crisis since the Great Depression, it is imperative that we create millions of good-paying jobs and, as I said, the interesting thing here is that good environmental policy is good economic policy. Stay up-to-date with the goings on in the Senate by signing up for the Bernie Buzz newsletter and joining his Facebook page today. Take our most recent web poll here

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