Archive for the ‘Business’ Category

Chinese corporate bonds no longer have a government backstop as solar cell firm defaults

March 7, 2014

Overseas investors have so far assumed that Chinese corporations would be bailed out by banks and the government if there was any danger of them defaulting. That assumption has now gone up in smoke as the Chinese Government – probably intentionally and as a signal – has allowed Chaori Solar to default. Chinese corporate bonds are now going to get a lot less attractive.

The strange fact about solar subsidies – around the world – is that the equipment manufacturers and the consumers have not benefited. Only plant developers have effectively walked away with the subsidies and they are usually very good at milking subsidies. As subsidies dry up it makes more sense for them to just walk-away. Solar (and wind) equipment manufacturers ramped up their production capabilities – sometimes by very expensive acquisitions – and are now in dire straits as subsidy reductions has caused the market to dive.

Bloomberg:Chaori Can’t Make Payment in China’s First Onshore Default

A Chinese solar-cell maker failed to pay full interest on its bonds, leading to the country’s first onshore default and signaling the government will back off its practice of bailing out companies with bad debt.

Shanghai Chaori Solar Energy Science & Technology Co. (002506) is trying to sell some of its overseas plants to raise money to repay the debt, Vice President Liu Tielong said in an interview today at the company’s Shanghai headquarters. The company said March 4 it will only be able to pay 4 million yuan ($653,990) of an 89.8 million yuan coupon due today.

The BBC warns:

Up until now, the Chinese government and state-owned banks have helped bail out or provide last-minute loans to Chinese firms in trouble. That has led many investors to park their funds in the corporate bonds of many Chinese firms, on the belief that the government would help ensure that these firms could continue to repay their debts.

However, a significant portion of this debt is set to mature in 2014 – with more than $1.5 trillion of corporate bonds outstanding at the end of January. …… That is why the Chinese government may be making a strategic decision to let some firms fail – particularly those, like Chaori, that may not have a huge knock-on effect in the market.

China’s solar industry has been suffering from an overcapacity problem for some time, as cheap financing and local government support led to a glut of firms entering the industry. That has led to a sharp fall in price, and the Chinese government has since hinted that it supports consolidation in the industry. ……… 

Yet while some see the default as a good thing for China’s corporate bond market, others worry it could be a sign of a wave of defaults to come. Bank of America analysts wrote in a recent note that the default could be “China’s Bear Stearns moment”. “In the US, it took about a year to reach the Lehman stage when the market panicked and the shadow banking sector froze,” they wrote. “We assess that it may take less time in China, as the market here is less transparent.”

Why insurance companies love alarmism

March 5, 2014

A fundamental for all insurance companies is that their profits are highest when perceived risk is higher than actual risk. There is a double benefit when the perceived risk can be hyped by alarmism  – whether about hurricanes or earthquakes or epidemics. The greater the alarmist meme, the higher the premiums that can be charged for the perceived risk. It is not surprising therefore that there is no insurance company which will publish a report – any report – about decreasing risks. It’s bad for business. But any alarmist report helps put up premiums for no increased risk. It is why many of them (and Munich Re comes easily to mind) employ many academics to produce alarmist reports. They find new risks to be alarmist about so that new insurance products can be invented.

And as Warren Buffet points out climate change alarmism has simply made hurricane insurance more profitable, driving up premiums without increasing risk”.

CNSNews: Any climate alarmist will tell you that climate change is increasing extreme weather events, but liberal billionaire Warren Buffett easily destroyed that argument.

Buffett told CNBC March 3, that extreme weather events haven’t increased due to climate change, saying that weather events are consistent with how they were 30-50 years ago. Buffett, who is heavily invested in various insurance markets, said that climate change alarmism has simply made hurricane insurance more profitable, driving up premiums without increasing risk

Buffett said the supposed increase in extreme weather “hasn’t been true so far, Joe. We always think it’s cold. We always think it’s cold in Omaha. But, it was cold in Omaha 50 years ago.”

CNBC’s Becky Quick asked Buffett on March 3’s “Squawk Box” if extreme weather events have increased, affecting insurance markets. Buffett responded that “the effects of climate change, if any, have not affected our – they have not affected the insurance market.”

Specifically, Buffett rejected claims that hurricanes have increased due to climate change, citing his experience in hurricane insurance. He said “we’ve been remarkably free of hurricanes in the United States in the last five years.” He added “If you are writing hurricane insurance, it has been all profit.”

Buffett compared the climate to previous decades, dismissing claims that weather events have been more unusual. He said “I think that the public has the impression that because there has been so much talk about climate, that events of the last 10 years, from an insured standpoint on climate, have been unusual. The answer is, they haven’t.”

 

Global Big Maconomics

February 11, 2014

Norway is a lot more expensive than Sweden. This is not lost on McDonald’s advertising agency DDB in Stockholm and they have installed this billboard straddling the border to persuade Norwegians to cross over for their burgers. Many Norwegians cross the border in any case to shop and most road borders have retail outlets and supermarkets on the Swedish side to cash in on this. Food alcohol and, it seems, Big Macs offer significant savings.

Norway - Sweden Big Mac

Norway – Sweden Big Mac

Eighty nine Norwegian kronor is about 93 Swedish kronor and so the Big Mac meal (including a drink and fries) is about 30% cheaper in Sweden. McDonalds have not revealed how effective this has been in attracting Norwegians.

TheLocalNorway once again boasts the world’s most expensive Big Mac, the UK’s Economist magazine has reported, with the ubiquitous double-decker burger now costing 48 kroner, or $7.80. 

Venezuela slips into second place with a $7.15 burger. Switzerland, which briefly stole the top spot last year on the back of a burgeoning Swiss franc, is now in third place with its $7.14 burger, followed by Sweden ($6.29) in fourth. 
 
The burger in Norway is on average 68.8 percent more expensive than it would be in a McDonald’s in the US. 

The cheapest Big Mac in the world is in India at $1.54. China at $2.74 and Japan at $2.97 are surprisingly close. Of course the current currency exchange rates also have an impact.

The Economist invented the global Big Mac Index in 1986. The 2014 Big Mac index was released a few days ago with January 2014 exchange rates.

THE Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries. For example, the average price of a Big Mac in America in January 2014 was $4.62; in China it was only $2.74 at market exchange rates. So the “raw” Big Mac index says that the yuan was undervalued by 41% at that time. 
 
Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of at least 20 academic studies. For those who take their fast food more seriously, we have also calculated a gourmet version of the index.

This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower. PPP signals where exchange rates should be heading in the long run, as a country like China gets richer, but it says little about today’s equilibrium rate. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency. The adjusted index uses the “line of best fit” between Big Mac prices and GDP per person for 48 countries (plus the euro area). The difference between the price predicted by the red line for each country, given its income per person, and its actual price gives a supersized measure of currency under- and over-valuation.

Click here for the interactive map.

big mac index - the economist

big mac index – the economist

Is PwC plagiarising Andreff’s Sochi Olympic result predictions?

February 7, 2014

In November last year I posted about this paper which used economic factors to develop a model for Olympics medal results and then used the model to predict medals won at the Sochi Winter Olympics starting today. Today Price Waterhouse Coopers (PwC) have with great fanfare made their predictions for the winter Olympics. In their press release they make no mention of this earlier paper

W AndreffEconomic development as major determinant of Olympic medal wins: predicting performances of Russian and Chinese teams at Sochi Games, in Int. J. Economic Policy in Emerging Economies, 2013, 6, 314-340.

The PwC predictions are slightly different but remarkably similar to the results published by Andreff. They claim to have looked at the same factors as Andreff did. They make the same prediction of home advantage for Russia as Andreff did. I don’t have access to their full report but their press release makes absolutely no reference to the earlier paper and seeks to take credit for the analysis. If their report makes no acknowledgement of the work by Andreff then it does look very much like plagiarism by PwC. Even if their “econometric” model has been developed independently, it is still a plagiarism of ideas if an acknowledgement of Andreff’s analysis has not been made.

Andreff Result Predictions:

Medal predictions Sochi 2014 - M Andreff

Medal predictions Sochi 2014 – M Andreff

PWC Medal Predictions

PWC sochi predictions

PWC sochi predictions

Press Release via ConsultantNews:

London, 31 Jan 2014As with the Summer Olympics, home advantage could play a key part in how the Winter Olympics medals are shared out next month – with hosts Russia looking set to capture a record haul.

But the hosts – along with close rivals Germany, Canada, Austria and Norway – will have their work cut out to catch the US team. Further down the table, after their London 2012 Olympics success, the GB team may have to settle for just a couple of medals. And unfortunately the cool Jamaican bobsled team don’t even make it into the running. 

Once again, economists at PwC have used their skills to project the likely medal tally – this time for the Olympic Winter Games at Sochi starting on 7 February. Their analysis is based on econometric modelling, testing the historic correlation between a range of socio-economic metrics and historic medal success.

The modelling results show that the size of the economy is significant in determining success, with total GDP appearing as a significant variable. However, a large economy is not sufficient on its own for a strong performance. Climate is an important factor, with snow coverage and the number of ski resorts per head having a significant and positive impact on medal shares.

Larger, developed countries with the right climate dominate the top of the projected medals table; but Austria and Norway demonstrate that a smaller economy is not a barrier to success, with a greater estimated medal haul than countries such as China and France.

William Zimmern, PwC economist, said: “While this is a light-hearted analysis, it makes an important point of how organisations can use economic techniques to help make better business decisions. The purpose of our model is not to forecast medal totals with complete accuracy, but rather to increase the predictive power of medal projections over and above using historic medal results alone.

The model allows us to make better, more confident and more informed forecasts. Businesses can use similar techniques to do the same.”

Home advantage – PwC

We used regression analysis to produce the results in Table 1, employing a Tobit model to estimate medal share for the 28 countries which have won at least one medal in the last three Winter Olympics. The variables used were total GDP, ski resorts per head, level of snow coverage, medal shares in the previous two Winter Olympics, and dummies for countries with a “tradition” of winter sports and for host countries.

I have worked with PwC many times during my career. They are very effective but they are not slow in trying to take credit wherever they can – even if it is undeserved. And their ethics are generally as lacking as is endemic in their industry (audit/consultancy).  A little bit of plagiarism by PwC – and not for the first time – would not be a great surprise.

Intrusive ads are counter-productive – at least with me

February 6, 2014

I must be representative of some consumers since I do buy stuff.

I even buy quite a lot of stuff on-line. Tickets of any kind (theatre, airline, museum, train, football, hockey bus ……), books, music, electrical and electronic gadgets and a host of small articles capable of being delivered by post. We book hotels on-line and sometimes pay on-line as well. We generally don’t buy food or clothes on-line but we do sometimes (at least my wife does) respond to the flyers dropped into our letter box by local retailers. Nearly all automotive products or materials for house repairs are bought physically and not on-line though we may have searched on-line.

But what I observe is that when I buy-on line it is from sites that I know or for which I have searched on-line. Never by clicking on an ad at another site. Even when I search I always hop over the paid ads which show up at the top of the search results. For a store to show up in a search result is much more important in getting my custom than in their advertising having been seen on another site. I cannot recall a single instance in the last year of buying something in response to an on-line ad. But what I also observe is that there is some threshold level of intrusiveness which leads me to remove sites from my bookmarks. If a site directs me first to full-page ads which I have to click away – and especially if they make it difficult to find the “close” button – then those sites get removed from my bookmark lists. I don’t watch videos on-line if their ads don’t disappear within 5 seconds. If my mouse, when hovering over text, brings up too many intrusive ads then the entire site gets onto my “black-list”. I don’t mind registering for some services at some sites but if that process takes longer than about 30 seconds (perhaps a minute) then that site never gets visited again.  Of course it could be that some of the on-line ads are having a subliminal effect and reinforce my perceptions when I search for on-line stores – but it is not very likely.

Even on TV and especially since the break for commercials is so long (in Sweden a commercial break lasts 6 minutes and there are not many ads of high quality), the commercial break either leads me to surf other channels or to go do something else. In the last year or two I notice that there are more TV programmes that I watch only up to the first commercial break because I then go and do something else and never get back in time to watch the rest of the programme. If it is a sporting or political event, then I may well return to the programme – after the commercial break. In any event the people paying vast sums for making and airing the commercials do not capture my attention. If anything they create a resentment in me since I am either a “captive audience” or am being coerced to view their “nonsense”. And it is the resentment which leads to the content being classified in my mind as “nonsense”. I never watch TV shopping channels but they clearly don’t have me as their target audience. The very existence of the commercials is leading me to strategies to avoid them!

My behaviour is surely influenced by the presence of ads on-line and commercials on TV. However, the behaviour engendered in me is nearly always counter-productive from the viewpoint of the advertiser. Maybe I am an untypical consumer – but I doubt it.  Which makes me wonder how effective some of this advertising is?

Certainly advertising agencies and the industry in general will never admit that there can be too much advertising. They get paid for exposure (or apparent exposure) and not for sales achieved. They don’t suffer any penalty for resentment caused or customers driven away. But I would suggest that there is a threshold – very low in my case – at which on-line advertising and commercials on TV become counter-productive.

I get virtually no text ads on my phone. I stopped using Facebook and Twitter some months ago so at least I am not harassed by their ads. But from what I hear, the intrusiveness of the ads on the social media are now leading to some people reducing their use and, in some cases, ending their use of social media. Social media and their business models are still evolving but the assumption that advertising revenues can keep increasing forever is fundamentally flawed.

BBCTwitter reports $645m loss for 2013

Microblogging site Twitter has reported a net loss of $645m (£396m) for 2013, just three months after its flotation on the New York Stock Exchange. The loss was expected by analysts, who highlighted Twitter’s revenues, which rose 110% last year to reach $665m.

But a reported slow growth in user numbers was a bigger concern for investors. Twitter averaged 241 million monthly users in the last quarter of the year, up just 3.8% on the previous quarter. That represents a slowdown compared with a growth rate of 10% seen at the beginning of 2013. Timeline views were down nearly 7%, suggesting users were refreshing their feeds less often.

“What this report will do is it will question how mainstream is Twitter as a platform,” said Arvind Bhatia, an analyst at Sterne, Agee & Leach.

Shares fell as much as 12% in after-hours trading on Wednesday.

Coal is still king in Svalbard

January 29, 2014

Svalbard, ranging in latitude from 74°N to 81°N,  is about as close as you can come to the “top of the world”. The mining of coal would not normally be thought of in the Arctic and that close to the North Pole but the Svalbard economy is dominated by coal mining. The population of Svalbard had increased by two percent, to 2,158 at the end of 2012.

CIA Factbook: The settlements on Svalbard are essentially company towns. The Norwegian state-owned coal company employs nearly 60% of the Norwegian population on the island, runs many of the local services, and provides most of the local infrastructure. There is also some hunting of seal, reindeer, and fox. Goods such as alcohol, tobacco, and vehicles, normally highly taxed on mainland Norway, are considerably cheaper in Svalbard in an effort by the Norwegian government to entice more people to live on the Arctic archipelago. By law, the Norwegians collect only enough taxes to pay for the needs of the local government. None of tax proceeds go to Norway.

Svalbard

Svalbard

Science Nordic reports:

The economy of Svalbard, the Norwegian arctic archipelago that lies between the country’s mainland and the North Pole, is still dominated by coal even as its value dwindles and employment in the mines drops. …

Tourism, a college and polar and space research activities have yet to make this community independent of coal. This has been verified by a recent analysis of Svalbard’s socio-economic status by the Norwegian Institute for Urban and Regional Research (NIBR).

“Coal mining has always been the mainstay here, and it still is,” says researcher Steinar Johansen, who wrote the report with his colleague Hild Marte Bjørnsen. ….. In addition to all who are directly employed by the local coal company, Store Norske, mining requires a number of sub-venders, and services need to be provided to family members who move to Svalbard’s little town, Longyearbyen, at the chilly latitude of 78° N. …

But can the Svalbard community surive without coal? Not without major changes, according to the researchers.

Tthe statue of the coal miner in the town of Longyearbyen is a reminder of who – or what – really dominates the economy. (Photo: Georg Mathisen)

US “sells” Norway Ambassadorship to an uninformed hotelier

January 27, 2014

The uglier side of “democracy”.

That generous donors to the US political parties are rewarded with Ambassadorships is common knowledge. The smaller and “less important” countries are usually the destination for these bought positions unless a very large donation is made. $6.2 million can buy an Ambassadorship to France or Monaco.

And now Norway knows precisely how unimportant it is considered by Obama’s establishment as George Tsunis, a rich Greek-American hotelier and a very generous donor to the Democratic Party made an idiot of himself at the Senate confirmation hearings. After all he can’t do much harm sitting in Oslo!!!

He thought Norway was a Republic and didn’t know which parties were in the coalition ruling Norway. It would have been pointless asking him the name of the King. An ignorant person is a correct description – at least about Norway. He does apparently know something about running a hotel. It does not say much for his knowledge (and perhaps also his intelligence) but it does not say much either for the briefings he must have received from the State Department. A member of the Greek Orthodox church now going to be an expert in a Lutheran country!!

Or did the career diplomats deliberately make sure he was not briefed properly because they wanted to showcase his ignorance? 

George Tsunis at US Senate in Jnuary 2014 - source screen grab - The Local

George Tsunis at US Senate in Jnuary 2014 – source screen grab – The Local

Future US envoy displays total ignorance of Norway

The US’s next ambassador to Norway has committed a jaw-dropping diplomatic blunder before he even begins, describing politicians from the Progress Party, which has seven ministers, as “fringe elements” that “spew their hatred” in a US Senate hearing.

Asked by Senator John McCain what he thought it was about the “anti-immigration” Progress Party that appealed to Norwegian voters, Greek American businessman George Tsunis seemed unaware of the party’s role in the ruling coalition. 
“You get some fringe elements that have a microphone and spew their hatred,” he said in the pre-appointment hearing. “And I will tell you Norway has been very quick to denounce them.” 
McCain interrupted him, pointing out that as part of the coalition, the party was hardly being denounced. 
“I stand corrected,”  Tsunis said after a pause.  “I would like to leave my answer at… it’s a very,very open society and the overwhelming amount of Norwegians and the overwhelming amount of people in parliament don’t feel the same way.”
The blunder came after a faltering, incoherent performance from Tsunis, in which he made a reference to Norway’s “president”, apparently under the impression that the country is a republic rather than a constitutional monarchy. 
Tsunis founded the hotel management company Chartwell Hotels, which operates properties for InterContinental Hotels, and other major hotel groups. He is one of the leading figures in the Greek-American establishment, and is heavily involved in the Greek Orthodox Church. 
He donated $267,244 to the Democratic party in the 2012 election cycle, and $278,531 in 2010, making him one of the party’s top individual donors. 
His ineptitude has also been noticed in the US (but he was confirmed anyway).

billmoyers.com:

The State Department is filled with veteran foreign service officers with years of experience in international relations. Most of them are products of elite universities, where they studied subjects like conflict resolution or international trade theory. Many are multilingual, and all have deep expertise on the political scenes of various countries.

Yet they routinely watch as deep-pocketed political donors with little or no foreign service experience are appointed to serve as America’s ambassadors overseas. The practice is so common that a pair of international relations scholars at the University of Pennsylvania were able to put prices on various plumb ambassadorships. According to The New York Times, “the study found that political ambassadors who had made campaign donations of $550,000, or bundled contributions of $750,000, had a 90 percent chance of being posted to a country in Western Europe.” The best postings — in France or Monaco — could cost up to $6.2 million in direct contributions. ….

Other Norwegian media described Tsunis as having “trampled through the salad bowl,” according to Olivier Knox at Yahoo NewsKnox added that Tsunis wasn’t the first to fumble the hearing:

McCain, already flummoxed by the apparent inability of Obama’s choice to be ambassador to Hungary to list strategic US interests there, closed his questioning with a bit of sarcasm: “I have no more questions for this incredibly highly qualified group of nominees.”

The real interests in the Arctic

January 26, 2014

Much of what is said or written about the Arctic – especially by governments or government funded institutions – is political positioning for military reasons, for staking a claim to the resources in the region, or to ensure potential sea transportation routes. Denmark’s positional strength is entirely dependent upon Greenland being part of Denmark whereas Iceland is only a second-tier country as far as rights in the Arctic are concerned. Without Alaska, the US would be in a very much weaker position (and in 1867 the purchase price paid to the Russians was just $7.2 million, or about 2 cents per acre!)

The region is divided into five sectors of responsibility between Russia, the US, Norway, Canada and Denmark. But there are others wishing to develop rich Arctic resources. Among them there are Sweden, Finland and Iceland. 

Arctic Circle  Image Athropolis.com

Arctic Circle Image Athropolis.com

The Russians have just had a conference about future development of the Arctic Region:

The Arctic is in the zone of Russia’s special interests. During the last week,

  • the Russian authorities, experts and the international community were actively engaged in the issues of developing the Arctic region.
  • President Vladimir Putin held a meeting on the issue of military presence in the Arctic;
  • leading political scientists and scholars participated in a round table discussion of the development of infrastructure in the Arctic;
  • and the International Maritime Organization announced an adoption of the Polar Code in the coming days.

……. It’s not a secret that a conflict is swelling between the countries making bids for the development of this territory rich of hydrocarbons and having a unique transit potential. Last year, Putin urged the Ministry of Defense “to pay special attention to the deployment of infrastructure and military units in the Arctic direction.” Today, the military industry is ready to supply the Defense Department with weapons that may be required in Northern latitudes. ….. Next to Russia, the US announced the increasing of its military presence in the Arctic. In these circumstances, Moscow needs to adhere to the course that was chosen during the Soviet times, member of the Federation Council Nikolay Fedoryak says.

“Back then, a serious contingent of Soviet troops was present in the Arctic. The troops located there mainly defended us from a possible air attack of the enemy. It’s not a secret that all strategic routes of US bombers were laid through the North Pole. Now, American capabilities of using high-precision weapons are significantly higher than in 1970-80ies. Therefore, it is inevitable that we need to restore the infrastructure and even do it on a higher level, so that we can protect our national interests. And if we don’t do it now, we may be late.”

…..  Russia puts great hopes on the development of the Northern Sea Route, which may become the most popular route from Europe to Asia. Its use will be strictly regulated in two years. The International Maritime Organization has announced its readiness to adopt the Polar Code of shipping. It will define international standards of the use of the Arctic for transportation purposes. The voluminous document will define in details what vessels and their crews, whose route passes above the 72nd parallel north, can and cannot do.

Until now, strange as it may seem, there were no international conventions regulating navigation in the Arctic. In other words, the same rules as those applied to the Adriatic Sea or in the Mediterranean with their mild climate were applied to the severe Northern region. However, the UN Convention on the Law of the Sea of 1982 stated that each state could introduce its own rules of Arctic shipping, head of the Center of Maritime Law Vasily Gutsulyak says.

“The international community can establish provisions on the environmental protection in Northern areas. Thus, it provides a carte blanche to extend the application of a number of international conventions to the Arctic. But the Polar Code quite clearly determines the order of requirements to vessels.”

The game is really worth it. Enormous reserves of hydrocarbons – for example, more than 90 billion barrels of oil – are concentrated in the Arctic. Hence, he who is the most active player in the Arctic direction will secure economic and geopolitical influence in the region.

The positioning of each country is immediately obvious in news articles and the statements of politicians. But it it is also discernible in most scientific papers about the Arctic and especially those about climate and the potential for ice-free regions giving rise to potential new sea routes. Many so-called “scientific expeditions” to the Arctic (just as with the Antarctic) are merely for demonstrating a presence or establishing a claim, for

he who is the most active player in the Arctic direction will secure economic and geopolitical influence in the region.

The next frontier after the Arctic and Antarctic which will see countries similarly jostling for position will surely be the moon. Positioning is one of the key drivers for the Chinese Chang’e-3 moon mission and for the Jade Bunny’s gambolling there. Similarly the Japanese and Indian Space Programmes have political and commercial positioning goals among their key drivers.

Science fiction is coming to life. Within 100 years we shall probably see Japan and China playing out their terrestrial island territorial disputes also around planets and asteroids in space. I have visions of some astronauts being left on asteroids by one country or the other to establish territorial claims!! Maybe we will see mining companies “occupying” mineral rich asteroids.

FIFA/Qatar on track to achieve 6 deaths per goal for 2022 World Cup

January 25, 2014

Just a few days ago we had the report about atrocities by the Assad regime in Syria commisioned by the Government of Qatar which supports some of the rebel groups in Syria. The report was released on the eve of the Geneva II peace talks.

But at home the Qatar government is cracking the whip to get construction completed for the 2022 FIFA World Cup and in the process has been complicit in the death of at least 193 Nepalese construction workers just during 2013. FIFA makes the appropriate noises but effectively turns a blind eye. They have too much money at stake. In October last year I posted

Based on the track record of World Cup Tournaments, the Qatar 2022 championship will see between 100 and 180 goals – most likely around 150.

But this number will be easily exceeded by the number of construction workers who have been killed by then. Already over 70 Nepalese workers have died since 2012 and the total number is probably around 200. By 2022 this number will exceed 1000.

Perhaps FIFA could introduce a safety performance index for the Qatar World Cup? Maybe to have less than 6 deaths per goal?

The Government of Qatar does not fill me with any sense of operating in good faith and certainly not with any confidence – either for peace in the Middle East or for the 2022 World Cup. They don’t really care how many second-class, immigrant workers lose their lives in any case. But FIFA has no excuse. They are going to easily achieve about 6 deaths/goal for the 2022 World Cup. FIFA is already in the dock for some of the condition of construction workers in Brazil  for the 2014 championship, but they should break all records in Qatar. There are 8 years to go and the risk is that by then deaths will exceed 10 per goal for the Qatar championship. Both FIFA and Qatar have blood on their hands.

The Guardian:

The extent of the risks faced by migrant construction workers building the infrastructure for the 2022 World Cup in Qatar has been laid bare by official documents revealing that 185 Nepalese men died last year alone.

The 2013 death toll, which is expected to rise as new cases come to light, is likely to spark fresh concern over the treatment of migrant workers in Qatar and increase the pressure on Fifa to force meaningful change. According to the documents the total number of verified deaths among workers from Nepal – just one of several countries that supply hundreds of thousands of migrant workers to the gas-rich state – is now at least 382 in two years alone. At least 36 of those deaths were registered in the weeks following the global outcry after the Guardian’s original revelations in September. …

… The revelations forced Fifa’s president, Sepp Blatter, to promise that football would not turn a blind eye to the issue following a stormy executive committee meeting. …… 

The Pravasi Nepali Co-ordination Committee (PNCC), which has cross-checked the figures from official sources in Doha against death certificates and passports, is still receiving new cases on a regular basis. The Guardian has seen evidence of at least a further eight cases, which would take the 2013 total to 193.

The PNCC called on Fifa’s sponsors to reconsider their relationship with world football’s governing body, which awarded the World Cup to Qatar in December 2010. “Fifa and the government of Qatar promised the world that they would take action to ensure the safety of workers building the stadiums and infrastructure for the 2022 World Cup. This horrendous roll call of the dead gives the lie to those reassurances,” said the PNCC. ….. 

Electric vehicles have no impact on emissions

January 22, 2014

If electric vehicles are to succeed they will have to provide the consumer with some real benefits by way of cost or convenience which are more than for feeling good. That in turn depends upon the further development of battery technology and increasing the range of the vehicle on a single charge. The cost of the vehicle and the speed of charging are other key factors.

The supposed environmental benefits are largely illusory since they merely shift the source of power generation (combustion from the internal combustion engine in a vehicle) to a power plant. In the United States this power generation is most likely to be fossil fired (coal or shale gas). A new study shows that even if electric vehicles made up more than 40% of all vehicles, emissions would be largely unchanged. As of 2012 electric vehicles made up about 0.5% of new vehicle sales and about 0.06% (170,000 of 254 million) of all vehicles on the road in the US.

(Phys.org)A new study from North Carolina State University indicates that even a sharp increase in the use of electric drive passenger vehicles (EDVs) by 2050 would not significantly reduce emissions of high-profile air pollutants carbon dioxide, sulfur dioxide or nitrogen oxides. … The researchers ran 108 different scenarios in a powerful energy systems model to determine the impact of EDV use on emissions between now and 2050. They found that, even if EDVs made up 42 percent of passenger vehicles in the U.S., there would be little or no reduction in the emission of key air pollutants. …..

The energy systems model also showed that key factors in encouraging use of EDVs are oil price and battery cost. If batteries are cheap and oil is expensive, EDVs become more attractive to consumers.

“How Much Do Electric Drive Vehicles Matter to Future U.S. Emissions?” Published: online January 2014 in Environmental Science & Technology pubs.acs.org/doi/abs/10.1021/es4045677

Abstract Image

Energy System Model

Abstract
Hybrid, plug-in hybrid, and battery electric vehicles—known collectively as electric drive vehicles (EDVs)—may represent a clean and affordable option to meet growing U.S. light duty vehicle (LDV) demand. The goal of this study is twofold: identify the conditions under which EDVs achieve high LDV market penetration in the U.S. and quantify the associated change in CO2, SO2, and NOX emissions through mid-century. We employ the Integrated MARKAL-EFOM System (TIMES), a bottom-up energy system model, along with a U.S. dataset developed for this analysis. To characterize EDV deployment through 2050, varying assumptions related to crude oil and natural gas prices, a CO2 policy, a federal renewable portfolio standard, and vehicle battery cost were combined to form 108 different scenarios. Across these scenarios, oil prices and battery cost have the biggest effect on EDV deployment. The model results do not demonstrate a clear and consistent trend towards lower system-wide emissions as EDV deployment increases. In addition to the tradeoff between lower tailpipe and higher electric sector emissions associated with plug-in vehicles, the scenarios produce system-wide emissions effects that often mask the effect of EDV deployment.


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