It is reported this morning by the BBC that the meeting of the International Monetary Fund (IMF), held over the weekend in Washington, has considered a plan for an orderly fault of Greek debt involving a 50% write down of the debt coordinated with extra funds to bolster European Banks. This looks on the face of it like another attempt to kick the can down the road delaying real action; but this time it could be different.
It is clear that Greece cannot pay its debts so is in effect bankrupt. World bankers do not want to admit this in public but it will have been at the top of the agenda behind the closed doors of meetings amongst the inner circle of IMF officials.
The 50% write-down plan buys time in that it looks possible that Greece could pay its way out of the reduced debt burden, but this does not address the core problem. From the viewpoint of outsiders, the demands for reform in Greece may look reasonable but inside Greece these are politically impossible. Greece needs the freedom to sort out its own affairs in its own way. Greece fiddled the figures to get into the Euro and it cannot now dig itself out of the financial hole except by leaving the Euro – in addition to defaulting on its sovereign debt.
I would hope that the IMF, ECB and central bankers now have a secret plan for Greece to exit the Euro in an orderly fashion – if this is still possible at this late stage in the crisis. De La Rue, the trusted bank note printer will have been given a contract (under great secrecy) to print Greek Drachma and these are now held securely in a warehouse in London waiting to be airlifted at two hour’s notice. The plan will include freezing Greek bank deposits immediately before the public announcement to prevent a run on the banks. There will then be a firestorm through the financial system as the reality takes hold but not as bad as people fear. There might be relief that the inevitable has come to pass and, if the plan has worked out how to prevent Italy following the exit route, it is possible that stability will return.
The secret plan to eject Greece from the Euro needs a good cover story. The discussion of a 50% write down on Greek debt might be a suitable distraction to give the ECB and central bankers the time they need to prepare.
Are the IMF and ECB kicking the can down the road, in desperation or with quite confidence that they have a secret plan for real action? Over the coming months the truth will emerge.
Monday, 26 September 2011
Sunday, 18 September 2011
A Curse hanging over French Guiana
The curse of fossil fuel is hanging over French Guiana. Tullow Oil, the London-based exploration company, has struck oil with its first well sunk in a new exploration block offshore. Commentators speculate that this could be the biggest new oil discovery of the year.
This small French ex-penal colony has a population of 200,000 and relies on income from an incongruous mix of its forestry industry and launching communication satellites for the European Space Agency. Agriculture is mainly along the coastal area including rice and manioc and further inland a small amount of marijuana mainly for local consumption. This beacon of stability in South America is about to be undermined in anticipation of the windfall profits from becoming an oil-exporting nation.
I lived in another outpost of Central America, Belize, for 6 months in the 1980s near a town called Punta Gorda. On first sight these were poor people but after a few months you began to realise that these were happy people with a wealth of natural resources, fruit from the jungle and fish from the sea. A Western eye could be fooled into believing that they need development but it is too hasty to jump to this conclusion.
A number of outsiders had moved into this part of Southern Belize to ‘get away from it all’. What they were actually about they were reluctant to say but it was a reasonable assumption that their business was growing marijuana for export to markets further north. In a sleepy town with ample remote jungle and good coastal access to export the drug, this was an ideal location. At the same time there was the first murder in living memory in this little town. The influx of money was starting to corrupt and undermine a way of life.
Oil production and growing marijuana are not the same; one is legal the other is not. Where they are the same is that they both bring monetary wealth, and with wealth comes the prospect of greed and corruption.
The people of French Guiana may find that oil is not the salvation it appears to be as the black gold starts to flow ashore and the discussions over money gather pace. Norway has shown how oil wealth can be used to improve the life of its people and secure long-term security. The Middle East has shown how oil wealth can corrupt and undermine society. French Guiana needs, as a matter of priority, good governance and long-term sustainable plans to ensure that the curse of oil does not strike down this South American colony.
This small French ex-penal colony has a population of 200,000 and relies on income from an incongruous mix of its forestry industry and launching communication satellites for the European Space Agency. Agriculture is mainly along the coastal area including rice and manioc and further inland a small amount of marijuana mainly for local consumption. This beacon of stability in South America is about to be undermined in anticipation of the windfall profits from becoming an oil-exporting nation.
I lived in another outpost of Central America, Belize, for 6 months in the 1980s near a town called Punta Gorda. On first sight these were poor people but after a few months you began to realise that these were happy people with a wealth of natural resources, fruit from the jungle and fish from the sea. A Western eye could be fooled into believing that they need development but it is too hasty to jump to this conclusion.
A number of outsiders had moved into this part of Southern Belize to ‘get away from it all’. What they were actually about they were reluctant to say but it was a reasonable assumption that their business was growing marijuana for export to markets further north. In a sleepy town with ample remote jungle and good coastal access to export the drug, this was an ideal location. At the same time there was the first murder in living memory in this little town. The influx of money was starting to corrupt and undermine a way of life.
Oil production and growing marijuana are not the same; one is legal the other is not. Where they are the same is that they both bring monetary wealth, and with wealth comes the prospect of greed and corruption.
The people of French Guiana may find that oil is not the salvation it appears to be as the black gold starts to flow ashore and the discussions over money gather pace. Norway has shown how oil wealth can be used to improve the life of its people and secure long-term security. The Middle East has shown how oil wealth can corrupt and undermine society. French Guiana needs, as a matter of priority, good governance and long-term sustainable plans to ensure that the curse of oil does not strike down this South American colony.
Sunday, 11 September 2011
Sustainable Development in the UK
The UK government is in trouble for using the term ‘sustainable development’ in the Draft National Planning Policy Framework in order to justify the following statement:
‘... a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan making and decision taking. Local planning authorities should plan positively for new development, and approve all individual proposals wherever possible.’
The Bruntland Commission (1987) defined the term ‘sustainable development’ in the context of underdeveloped countries. Back in 1987 the concern was how to provide development without the associated path of destruction that the developed countries followed. There was an underlying assumption that there would be development so the need was ways to make it sustainable. This argument does not apply to highly developed countries like the UK.
The draft policy includes three threads:
planning for prosperity (an economic role)
planning for people (a social role)
planning for places (an environmental role)
This is the order of precedence used in the report and the bold highlighting has not been added by me; it has been used by the author to emphasise the guidance to local authorities and planning officials that:
‘... significant weight should be placed on the need to support economic growth through the planning system.’
This is a very clear example of the business as usual approach which I analysed in my book Victim of Success: Civilisation at Risk. In Chapter 13 (a coincidence of number choice) I wrote about ‘The Three-way Balancing Act’ between people profit and planet. I wrote:
‘I do not argue that we soften our focus on economics. Economic tools are quantifiable and measurable and the outcome of increased wealth is a tangible improvement. The problem is that a narrow focus on economics does not lead to sustainable outcomes. We need to bring the same level of rigour to the way we deal with social outcomes and protection of the environment.’
The UK government is leading the UK down the path that I described in the early chapters of Victim of Success on which we knowingly and stupidly continue down the path to destruction. There is no need; there is a better way; UK planning rules do need changing but the foundation assumptions of this draft (daft) policy is wrong.
‘... a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan making and decision taking. Local planning authorities should plan positively for new development, and approve all individual proposals wherever possible.’
The Bruntland Commission (1987) defined the term ‘sustainable development’ in the context of underdeveloped countries. Back in 1987 the concern was how to provide development without the associated path of destruction that the developed countries followed. There was an underlying assumption that there would be development so the need was ways to make it sustainable. This argument does not apply to highly developed countries like the UK.
The draft policy includes three threads:
planning for prosperity (an economic role)
planning for people (a social role)
planning for places (an environmental role)
This is the order of precedence used in the report and the bold highlighting has not been added by me; it has been used by the author to emphasise the guidance to local authorities and planning officials that:
‘... significant weight should be placed on the need to support economic growth through the planning system.’
This is a very clear example of the business as usual approach which I analysed in my book Victim of Success: Civilisation at Risk. In Chapter 13 (a coincidence of number choice) I wrote about ‘The Three-way Balancing Act’ between people profit and planet. I wrote:
‘I do not argue that we soften our focus on economics. Economic tools are quantifiable and measurable and the outcome of increased wealth is a tangible improvement. The problem is that a narrow focus on economics does not lead to sustainable outcomes. We need to bring the same level of rigour to the way we deal with social outcomes and protection of the environment.’
The UK government is leading the UK down the path that I described in the early chapters of Victim of Success on which we knowingly and stupidly continue down the path to destruction. There is no need; there is a better way; UK planning rules do need changing but the foundation assumptions of this draft (daft) policy is wrong.
Sunday, 4 September 2011
Is Sustainable Development an Oxymoron?
It was not intended that ‘Sustainable Development’ would be an oxymoron when it was defined by
the Bruntland Commission in 1987 as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. In the context of examining how to encourage the development of poorer countries, it was argued that this should be according to the paradigm of sustainability. Making the assumption that underdeveloped countries will need to develop was a reasonable assumption at the time. Over recent years, the term ‘sustainable development’ has been used (and misused) as a term to justify further development in the belief that sustainable development must be good.
The deeper understanding of sustainability that is slowly emerging recognises that the assumption that there must be continual development (meaning expanding the industrial and built environment) is the wrong foundation on which to build policy. The term ‘sustainable’ is now, in many cases, a contradiction when used in conjunction with ‘development’.
Sustainability is about the effective management of resources now and for future generations. That means retaining a functioning eco-system; which means preserving bio diversity; which means keeping a sufficient proportion of land for nature. Development that slowly encroaches on the bank of natural land has to be constrained before lasting damage is done. ‘Sustainable development’ now fits the definition of an oxymoron: a phrase in which two words of contradictory meaning are used together for special effect; examples from the dictionary are 'wise fool' and 'legal murder'. To these we can add ‘sustainable development’.
the Bruntland Commission in 1987 as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. In the context of examining how to encourage the development of poorer countries, it was argued that this should be according to the paradigm of sustainability. Making the assumption that underdeveloped countries will need to develop was a reasonable assumption at the time. Over recent years, the term ‘sustainable development’ has been used (and misused) as a term to justify further development in the belief that sustainable development must be good.
The deeper understanding of sustainability that is slowly emerging recognises that the assumption that there must be continual development (meaning expanding the industrial and built environment) is the wrong foundation on which to build policy. The term ‘sustainable’ is now, in many cases, a contradiction when used in conjunction with ‘development’.
Sustainability is about the effective management of resources now and for future generations. That means retaining a functioning eco-system; which means preserving bio diversity; which means keeping a sufficient proportion of land for nature. Development that slowly encroaches on the bank of natural land has to be constrained before lasting damage is done. ‘Sustainable development’ now fits the definition of an oxymoron: a phrase in which two words of contradictory meaning are used together for special effect; examples from the dictionary are 'wise fool' and 'legal murder'. To these we can add ‘sustainable development’.
Monday, 29 August 2011
Aquafuel
"glycerine is... possibly the best fuel in the world. It isn’t toxic; it is water soluble; and it’s nearly impossible to ignite glycerine under normal conditions."
This is the claim made by Paul Day founder and Chief Executive of UK company Aquafuel. His company has succeeded in making a diesel engine run on glycerine (a bi product of biodiesel production) with much lower toxic emissions than an engine running on standard diesel fuel. On the face of it this is a useful process to utilise a product for which is there is little current demand. According to The Chemical Engineer magazine for every tonne of biodiesel produced, 100-110 kg of glycerine is obtained as a side product. The world supply of glycerine in 2008 was 3.2m t and the demand just 0.9m t.
It seems odd that anyone would try and run an engine on glycerine but this mad punt seems to have hit the jackpot. Where this story gets really interesting is if you decide that glycerine is better than bio diesel and, rather than try to produce biodiesel, focus on production of glycerine. It turns out that there is a strain of algae called dunaliella salina which grows in salt water and fills its body with glycerine to counteract the osmotic pressure of the salt. At high salt concentrations the amount of glycerine in the algae can be as high as 80%. Harvest the algae, extract the glycerine and there is the fuel of the future.
The algae can grow in the evaporation ponds used by the salt-making industry and there is no conflict with food production or land use. Aquafuel believes that places like Namibia could support a large industry with all the production powered by CHP units running on the glycerine and taken to market on ships powered by glycerine. This would appear to be a clean and sustainable fuel source.
I will be watching Aquafuel with interest over the years ahead and hope that governments drive up the taxes on fossil fuels to ensure that businesses such as Aquafuel are commercially viable.
This is the claim made by Paul Day founder and Chief Executive of UK company Aquafuel. His company has succeeded in making a diesel engine run on glycerine (a bi product of biodiesel production) with much lower toxic emissions than an engine running on standard diesel fuel. On the face of it this is a useful process to utilise a product for which is there is little current demand. According to The Chemical Engineer magazine for every tonne of biodiesel produced, 100-110 kg of glycerine is obtained as a side product. The world supply of glycerine in 2008 was 3.2m t and the demand just 0.9m t.
It seems odd that anyone would try and run an engine on glycerine but this mad punt seems to have hit the jackpot. Where this story gets really interesting is if you decide that glycerine is better than bio diesel and, rather than try to produce biodiesel, focus on production of glycerine. It turns out that there is a strain of algae called dunaliella salina which grows in salt water and fills its body with glycerine to counteract the osmotic pressure of the salt. At high salt concentrations the amount of glycerine in the algae can be as high as 80%. Harvest the algae, extract the glycerine and there is the fuel of the future.
The algae can grow in the evaporation ponds used by the salt-making industry and there is no conflict with food production or land use. Aquafuel believes that places like Namibia could support a large industry with all the production powered by CHP units running on the glycerine and taken to market on ships powered by glycerine. This would appear to be a clean and sustainable fuel source.
I will be watching Aquafuel with interest over the years ahead and hope that governments drive up the taxes on fossil fuels to ensure that businesses such as Aquafuel are commercially viable.
Sunday, 21 August 2011
The Politics of Denial
According to a US report from the Obama Administration:
‘A family that purchases a new vehicle in 2025 will save $8,200 in fuel costs compared with a similar vehicle in 2010.’
The report titled, White House Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil outlines the Administration’s national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025. For the United States this is a big improvement, but it should be seen in context. These are figures that can be achieved now in 2011 with current technology, if there is a will. The challenge is two-fold; persuading the car makers to adjust the range of the models they offer and the willingness of drivers to sign up for the more efficient models.
The report is attempting to sell the changes using the argument that it will cost less. For an immediate change in standards, effective this year, that might be so, but not in the timescale of 2025. Oil prices are set to climb; families should be buying more efficient cars to avoid the big price rises to come. It is disingenuous to spin these improved standards as savings when in reality fuel bills will be considerable higher in 2025. Is it the American drivers who are so dumb that they cannot be trusted with the facts? Or, is it that US politicians have a very low opinion of their electorate? Either way it is a sign that US political wrangling is divorced from reality.
The Whitehouse statement is an attempt at spinning necessary change as a denial that fundamental change is needed, implying that US drivers can carry on as before ― and will actually save money. In such a political climate, progress is made at a snail’s pace.
I recently sold my 12-year old Audi estate which would consistently deliver 55 miles to each gallon. Admittedly this refers to UK galloon so does not meet the US standards for 2025 but as an old European banger it gets close.
There is much to admire about the United States but it seems at the moment to be stuck on a political rut of denial, believing that the US high consumption can go on indefinitely with only marginal changes.
The 2025 vehicle efficiency standards are to be welcomed but are too little, too late.
‘A family that purchases a new vehicle in 2025 will save $8,200 in fuel costs compared with a similar vehicle in 2010.’
The report titled, White House Driving Efficiency: Cutting Costs for Families at the Pump and Slashing Dependence on Oil outlines the Administration’s national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025. For the United States this is a big improvement, but it should be seen in context. These are figures that can be achieved now in 2011 with current technology, if there is a will. The challenge is two-fold; persuading the car makers to adjust the range of the models they offer and the willingness of drivers to sign up for the more efficient models.
The report is attempting to sell the changes using the argument that it will cost less. For an immediate change in standards, effective this year, that might be so, but not in the timescale of 2025. Oil prices are set to climb; families should be buying more efficient cars to avoid the big price rises to come. It is disingenuous to spin these improved standards as savings when in reality fuel bills will be considerable higher in 2025. Is it the American drivers who are so dumb that they cannot be trusted with the facts? Or, is it that US politicians have a very low opinion of their electorate? Either way it is a sign that US political wrangling is divorced from reality.
The Whitehouse statement is an attempt at spinning necessary change as a denial that fundamental change is needed, implying that US drivers can carry on as before ― and will actually save money. In such a political climate, progress is made at a snail’s pace.
I recently sold my 12-year old Audi estate which would consistently deliver 55 miles to each gallon. Admittedly this refers to UK galloon so does not meet the US standards for 2025 but as an old European banger it gets close.
There is much to admire about the United States but it seems at the moment to be stuck on a political rut of denial, believing that the US high consumption can go on indefinitely with only marginal changes.
The 2025 vehicle efficiency standards are to be welcomed but are too little, too late.
Sunday, 7 August 2011
My Nissan Leaf
My electric car is a Nissan Leaf, one of about 400 sold in Britain since its launch earlier this year. I put my name down when Nissan first started to register expressions of interest and mine was one of the first to be delivered. We have driven about 2,500 trouble-free miles so far. It is a reliable, very quiet and I have to say rather dull family car. It is perfect for most of regular transport; my wife uses it for her commute (about 17 miles each way); I use it for my journey when I teach at Henley Business School (round trip of 32 miles). I take my children to their various activities, if we need to shop outside the village or off to see grandma in Oxford (55 mile round trip). These are all well within the range even with a very heavy right foot – the car has a respectable turn of speed and good acceleration, but if you use it do not expect to get anywhere near the claimed range of 100 miles. Flat out it will pull 90 mph and manage one motorway junction and back before the battery gives out. It is madness to compare an electric car with a conventional car (listen up Jeremy Clarkson). An electric car fits the niche of local transportation rather well; it is not designed for, and is not suitable for, long journeys.
We plan to keep the battery in tiptop shape so we seldom charge it beyond 80% using cheap night-time electricity ―unless we know we have a long journey coming up ― and do not use rapid charge. It is simpler and takes less time to plug it in each night than filling with petrol once a week. Our credit card bills are noticeable less.
Top Gear gave the car the sort of treatment you would expect; they ensured that the story had all the interesting angles, silent running of course and cheap to operate but also stranded after running out of charge. You have to be quite an idiot to get caught like this but then the presenters on the programme like to fit this description. It makes an entertaining story and good TV but does not provide a useful analysis – Top Gear is high octane entertainment not a consumer affairs programme.
My electric car fits my need perfectly. Whether the car is green or not is a different question. Using the current electricity grid, it is not a very green option but it is worth introducing the technology concurrently with driving forward decarbonising the electric supply. The greenest solution is of course to alter city infrastructure and support lifestyles that do not need the car. I suspect that by the time the government grant programme (£43 million at £5,000 a time to the first 8,600 electric cars bought) runs out in March next year the government will be able to pocket a healthy surplus. The government should thank Top Gear for obscuring the benefits of electric cars and ensuring that the grants are not taken up in full.
We plan to keep the battery in tiptop shape so we seldom charge it beyond 80% using cheap night-time electricity ―unless we know we have a long journey coming up ― and do not use rapid charge. It is simpler and takes less time to plug it in each night than filling with petrol once a week. Our credit card bills are noticeable less.
Top Gear gave the car the sort of treatment you would expect; they ensured that the story had all the interesting angles, silent running of course and cheap to operate but also stranded after running out of charge. You have to be quite an idiot to get caught like this but then the presenters on the programme like to fit this description. It makes an entertaining story and good TV but does not provide a useful analysis – Top Gear is high octane entertainment not a consumer affairs programme.
My electric car fits my need perfectly. Whether the car is green or not is a different question. Using the current electricity grid, it is not a very green option but it is worth introducing the technology concurrently with driving forward decarbonising the electric supply. The greenest solution is of course to alter city infrastructure and support lifestyles that do not need the car. I suspect that by the time the government grant programme (£43 million at £5,000 a time to the first 8,600 electric cars bought) runs out in March next year the government will be able to pocket a healthy surplus. The government should thank Top Gear for obscuring the benefits of electric cars and ensuring that the grants are not taken up in full.
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