Contents contributed and discussions participated by Alysia Power
Crown Eco Capital Jakarta Fraud Management Solutions - COVER STORY: Jakarta races ahead... - 3 views
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PHENOMENAL: Jakarta's rapid growth is set to continue despite glitches
At the end of 2012, practically every property report had cited Jakarta as the top investment destination in Southeast Asia in 2013. Foreign direct investment grew by 39 per cent in the first half of 2012 and demand for property in Jakarta was strong, resulting in year-to-year office rents jumping by 29 per cent. Despite difficulties such as securing bank loans and getting reliable local partners, analysts and market observers enthused that Jakarta held significant promise.
Fast forward six months later, has Jakarta fulfilled its promised? Apparently yes, as indicated by recent news reports. Despite the challenging backdrop of a massive 44 per cent hike in petrol price, a Sydney-based property developer, Crown International Holdings Group is looking to tie up with a local developer to build a Jakarta-based apartment project valued at a minimum of Rp1 trillion. It looks like there is no let-up to the hot property market there.
Crown believes the apartment living trend in the Central Business District (CBD) will grow more entrenched in the coming years due to the bad traffic condition in Jakarta. Traffic is so bad that nowadays people prefer to stay in apartments close to their workplaces. That way, they save 2 - 3 hours being stuck in traffic jams on a daily basis. They even shop in malls close by. The target market is rich local Indonesians buying for their own occupation or buying to let to the large expatriate market.
Crown's analysis of the market is supported by statistics. Jakarta saw a 38 per cent jump in its residential luxury market prices last year, primarily in what is termed as "critical housing" - apartments in CBD that are in very high demand due to the overcrowded and congested conditions in the teeming metropolis of 12 million.
Huge pent-up demand
The Indonesian economy has been chalking up growth of about 6 per cent every year for the last five years, so there are more people with money but so are there more of the middle and lower income groups as well. This has increased the demand for property, says Andri Marsetianto, a property analyst who does consulting work for a state-owned company.
"Apartments are certainly the new property of choice because they offer security, safety and easy access," he continues.
The target market is usually local young professionals or the newly rich who can afford the Rp30 million price tag in downtown CBD area. These posh areas are where you can see imposing skyscrapers, trendy shopping malls and fancy condominiums. And the number of these apartments being built is increasing even as their prices and rentals climbed in double-digit figures.
This is because of a huge pent-up demand, says Andri, backing up his statement with his observation that in Jabodetabek, he saw every new housing cluster (168 units) and apartment (about 300 units) launched sold out within a day with a coupon system.
"Apartments still dominate here because of the lack of prime affordable land. The prime locations are CBD Sudirman, Kuningan, Menteng, Senayan, Kebayoran Baru, Pondok Indah, Kemang, and TB Simatupang in South Jakarta. MT. Haryono in East Jakarta, Pantai Mutiara and Kelapa Gading in North Jakarta and Puri Indah in West Jakarta," reveals Andri.
The property analyst adds that the building boom will be sustainable because of the increasing population, development of commercial properties such as malls and offices in the surrounding areas and the building of new transport infrastructure such as monorail, mass rapid transit (MRT) and new toll roads. "There is also a belief among the communities in the West and North of Jakarta that investing in properties is not just for capital gain and business support but also for feng shui purposes."
Double-digit growth
According to Colliers International, the average apartment price in the CBD has climbed 26 per cent year on year from Rp25.9 to 32.6 million per sq m while prices of apartments similarly jumped in South Jakarta by 25 per cent year on year from Rp17.8 to 22.5 million per sq m.
The average asking rental rates in the CBD has also climbed significantly by 11.2 per cent quarter on quarter from US$23.69 to US$26.34 per sq m per month.
In the office sector, during the first quarter of 2013, the average asking base rental rates in the CBD continued to rise increasing by 8 per cent (US$) and 6 per cent (Rp) QoQ. This increase in rental rates was mainly driven by the scarcity of good quality office space with only a 3 per cent vacancy rate in the CBD.
The retail market continues to perform well too with average asking base rental rates for all class shopping centres in Jakarta rising 3 per cent QoQ to Rp468,084 per sq m per month. Rental rates are expected to rise further as retail space is quite limited in 2014 - 2015.
In the industrial estate sector, during the first quarter, overall land prices in all regions saw a 10.5 per cent increase on average.
Jumping in or not?
With such a red-hot market, surely more foreign developers would follow suit? A query to SP Setia Bhd elicited this response, "Currently, we have a representative office in Jakarta and are open to any opportunities that may arise in the future", which was essentially the same thing that they said when they first opened their representative office back in April 2012.
Perhaps there is another side to the story? A source commenting on Crown's proposed entry into the Jakarta property market said that it's a good development as it would "raise up the quality and credibility of developers in Indonesia which still leave much room for improvement.
"Hopefully with foreign competitors, other than better quality developments, a sense of responsibility and credibility can be heightened. There is no check and balance or governance that oversees the property market in Indonesia. Consumers have no protection against the risk of local developers defaulting on delivery of their projects."
This may sound good for developers, both local and foreign, but an expatriate who declined to be named said whether they are developers or buyers, the truth is that in many areas in Indonesia, the justice system still favours the highest bidder, and if foreigners are pitted against the locals, usually the locals will win.
Hazy ownership laws
Hence, if you ever get into a legal wrangle in respect of your property in Indonesia, don't count on the merit of your case. As it is, the law on foreign ownership of property is still not very clear.
Any foreigner who wants to buy property in Indonesia must have a temporary stay permit (Kitas) or permanent stay permit (Kitap) and fulfill several related rules. Foreigners have rights over property for a maximum of 25 years only which could be extended up to 70 years.
There are however several other ways for a foreigner to invest in property in Indonesia. The safest is by forming a foreign investment company (PMA), which can own titles to build on or utilise land. The PMA can also be used as a legal entity through which nominee agreements can be made.
With this, a foreigner can nominate a "trusted" Indonesian citizen or company to buy freehold land for them, and then use a number of documents to ensure that the foreigner still retains his right over the property. The documents include a contract (rental or purchase) transferring the property to the nominee, a loan agreement that shows that the foreigner has "loaned" the purchase price to the nominee, a "Right of Use" agreement which enables the foreign investor to use the land and a Power of Attorney which allows the investor the authority to sell, transfer or dispose of the property as well as to represent the nominee in any dispute regarding it. Although this method sounds legitimate, it is not a 100 per cent guarantee that in the event of a dispute with the nominee, the foreigner's rights would be protected.
Traps for unwary?
Thus, despite the overwhelming promise of the Jakarta property market, it is still full of traps for the unwary. At the same time, it is not easy to get a loan in the relatively under-developed mortgage market.
Don't forget too the many unsavoury aspects of a fast industrialising country which is overcrowded. There are many serious environmental issues such as illegal deforestation, over-exploitation of marine resources, wildfires that cause heavy smog as is happening right now and pollution that comes from traffic jams, etc.
Andri is however quick to point out that the traffic jam problem is a multi-dimensional problem, because it relates to the economic growth in Jakarta, the increasing numbers of cars and motorcycles coming to Jakarta, the flood, the need for proper mass transportation, etc.
"Maybe the MRT and monorail cannot resolve the traffic situation, but they can reduce the traffic congestion over time. The local government of Jakarta should also impose a moratorium on new malls to reserve more supply of land for public facilities and green lung areas. It's also becoming a trend now for big developers to incorporate green features into their developments."
In the final analysis, Andri feels that property is still a favourite investment instrument for the middle class in Indonesia during these times of rapid growth. The price in general is still lower than in Malaysia and is one eighth the price in Singapore. That being the case, it will be some time more before Jakarta's rapid growth cools off or becomes unsustainable.
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Crown Jakarta Management - New Discovery: One Good Thing Coal Does for Nature - 0 views
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Before we get started, a warning. What you’re about to read is going to sound at first like something cooked up by the same folks who gave us the oxymoronic (and otherwise moronic) advertising slogan “Clean Coal.” It will sound like a fantasy story even a Fox News anchor would not dare announce: “Coal—The Biodiversity Fuel.”
In a paper being published in the journal Conservation Biology, researchers in the Czech Republic, who have been studying bees and wasps, report that some of that country’s endangered species, including four insects that had been presumed regionally extinct, have turned up instead thriving in the fly ash heaps at coal-fired power plants.
Fly ash, as the paper helpfully explains, is what’s left over after a power plant burns coal, and it’s composed of “glass-like particles of mineral residua which are carried out of the boiler in the flow of exhaust gases,” plus bottom ash, boiler slag, and “flue gas desulphurization materials.” To be clear, the “fly” in “fly ash” is not a reference to insects; rather, it has to do with the fact that the substance is so light and fine that it flies up during combustion.
The study found 227 species of bees and wasps, including 35 that were endangered or critically endangered, living at two power plant sites. Some of these insects are important pollinators, and others may be valuable as predators and parasitoids for controlling agricultural pests. According to lead author Robert Tropek, an entomologist with the Czech Academy of Sciences, a follow-up paper will look at five other invertebrate groups also making their last stand on fly ash waste.
Among the creatures populating this man-made habitat, for instance, is a tiger beetle, Cicindela arenaria viennensis (pictured at right), a remarkably swift predator known as the cheetah of the insect world. Like many of the species in the current study, that beetle thrives in inland dunes and banks of drift sand, a habitat that has been systematically eliminated from much of Central Europe to make “wasteland.” Tropek says he came up with the idea for the study after photographs of fly ash deposits reminded him of that lost habitat. (Tropek said the study was funded by the Czech Science Foundation and the University of South Bohemia. Power industry involvement was limited to the sites that allowed access to the power plants and agreed to hold off on reclamation pending the results of the research.)
Tropek has spent much of the past 10 years studying the wildlife of man-made wastelands, partly because he likes the spirit of these abandoned sites and partly because they have become genuinely important habitats. “The evidence is accumulating,” he and his co-authors write, “that various post-industrial barrens, such as quarries, gravel pits, spoil heaps and brownfields, often harbor biotic communities of high conservation value, providing refuges for many species vanishing from human-affected landscapes.” These are the only places left for animals to hide out when everything else is in ruins.
To complicate matters, fly ash wastelands are disappearing, being covered over with dirt or planted to minimize the human health hazards of airborne fly ash waste, which may include lung damage. In an email, Tropek acknowledges the difficulty of the issue. The solutions are “quite good for the human environment. On the other hand, it is fatal for the newly established [animal] communities originally specializing in the drift sands.” His ambition is that the coal ash heaps will last at least until people—or power companies—come to their senses and begin “effective restoration of natural habitats.” At that point, “the postindustrial refuges would be the species pool for recolonizing newly restored plots.”
The phenomenon of species forced to find refuge among industrial waste is also common in the United States. What Tropek and his co-authors are reporting, says Lisa Evans, an attorney with the U.S. environmental group Earthjustice, is “not as strange as you think, in terms of coal ash impoundments being used as wildlife habitats.” There are 1070 such impoundments and another 350 coal ash landfills in this country, according to the official count, and they are located generally close to the power plants that produced them. These facilities are often hazardous for humans. In December 2008, for instance, the earthen wall at a coal ash impoundment in Harriman, Tennessee, burst open and dumped 1.7 million cubic yards of waste onto nearby neighborhoods.
For birds, amphibians, and possibly other animals, these compounds are “an attractive nuisance,” the equivalent of toxic waste sites doubling as playgrounds for city children. Biologists use the term “population sinks” to describe them, says Evans. “From the outside they look like habitat for critters, but because of the toxic chemicals in the ash, it becomes their last resting place. They’re attracted to it, but they don’t get out.” A study last year at a power plant in South Carolina, for instance, found that birds nesting around coal fly ash basins inadvertently contaminated their young with arsenic, selenium, cadmium, and strontium. Multiple studies found that amphibians at the same site suffered profound developmental problems and increased mortality.
So, no, coal is never actually going to become the biodiversity fuel, especially given its richly destructive record of mountaintop removal, acid rain, mercury contamination, and, of course, global warming. But the new studies suggest a fresh way for coal-burning companies to clean up their dirty reputations. Skip the clever advertising campaigns. Instead, spend money to dispose of coal fly ash safely for people and wildlife alike. Then spend a little more to relocate the desperate menagerie huddled in those fly ash heaps to some restored version of their natural habitat.
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Livejournal - Reducing Energy Cost Through Boiler Efficiency - Crown Jakarta Management - 0 views
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Boiler Efficiency – Why is it important?
· Cost of boiler fuel is 2.5–3 times higher than 4 years ago and continues to rise.
· May be the highest single feed manufacturing cost??
· Competition knows it is important!!
· Company feed mill managers
· Agri-stats
· BOSS wants lower costs!!!
Boiler Efficiency
· Input Energy
· Fuel oil
· Natural gas
· Propane
· Output Energy
· Process Steam
General Boiler Information
· 1 boiler horse power = 42,000 BTUs of INPUT
· 1 pound of steam =1,200 BTUs of INPUT fuel
· Typical boiler efficiency = 75-85%
· New high efficiency near 90%
· Fuel sources:
· Natural Gas = 1,031 BTU/ft3
· Propane = 91,000 BTU/gal
· Fuel Oil = 139,000 BTU/gal
Operations
A Fable
A feed mill manager once went to a wise man for help in improving his inefficient, unprofitable feed milling operation. The wise man wrote a charm on a piece of paper and sealed it in a box that he gave to the manager.
“Carry this box into every part of your mill three times each day for a year,” he told him. The mill manager did so.
In the morning he carried the box and its charm into the warehouse and found a laborer fast asleep on a pile of sacks instead of working. At noon, he carried it up to the milling floor, he noticed a leak in a spout that was contaminating a bin of grain. He also spotted a hot bearing and called a mechanic to grease it. At night, he carried the box to the packing room and found his employee overfilling the bags.
Everyday, as he took the box and its charm from place to place in the mill he found things to correct. At the end of the year, he returned the box to the wise man.
“Let me keep the charm for one more year,” he begged. “My mill is more efficient and more profitable than it has every been before”
The wise man smiled and took the box. “I’ll give you the charm itself,” he said. He broke the seal, lifted out the piece of paper and handed it to the mill manager.
On it was written: IF YOU WANT THINGS TO PROSPER, LOOK AFTER THEM YOURSELF.
SOURCE
http://crowncapitalmgt.livejournal.com/6172.html
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Crown Capital Eco Website Discussion: Potential applications of renewable energy source... - 0 views
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"In a world where almost everything is run by machines it not surprising that we are also running out of energy sources what worsens the case is that the energy sources that we use are destroying the world we are living in. Another dilemma people are now facing is these energy sources are bound to vanish years from now. Read More"
BIOMASS AS a fuel for BOILERs - Crown Capital Eco Management Indonesia - 0 views
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"BIOMASS AS a fuel for BOILERs - Crown Capital Eco Management Indonesia BIOMASS AS a fuel for BOILERs Biomass for energy often mean plant base material although can equally apply to both animal and vegetable draw from material. Biomass is actually a biological material derive form living or recently living organisms. Biomass chemical composition is carbon based and is composed of a mixture of organic molecules containing hydrogen, usually including atoms of oxygen, often nitrogen and also small quantities of other atoms, including alkali, alkaline earth and heavy metals, metals are often found in functional molecules such as the porphyrins which include chlorophyll which contains magnesium."
Renewable energy would save EU trillions by 20500 - Crown Capital Eco Management Renewa... - 0 views
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"The Commission The Commission by environmental campaigners forecast 3 trillion euros would generate by 2050 on their green revolution campaign- to make EU energy almost totally carbon free. Read more With emerging renewable energy alternatives today, it is highly important that they be given enough attention even early on their developmental stages. Such technologies might not be ready for commercial uses yet but their potential should be amply tested and funded. Society's modern lifestyle is in serious need of energy that can be generated and consumed and yet, not compromise the future state for generations to come; to have no anxiety that it would cause damage to the environment. The energy shift The energy shift would already create around half a million extra jobs by 2020, Crown researchersfrom German aerospace center DLR, which also specializes in energy and transport, found. It has legislated to ensure that 20 percent of the energy mix is green by the said year, as part of a set of three main environmental goals. But it has yet to achieve agreement on binding targets beyond 2020, even though non-binding roadmaps have laid out the need for a virtually carbon-free electricity mix by 2050. Commissioned by Greenpeace and the European Renewable Energy Council (EREC), the 2012 Energy evolution report lays out risk avoidance towards almost carbon-free energy. They include curbing energy demand through greater efficiency, increasing investment in wind and solar power and phasing out subsidies for carbon-intensive energy, such as coal. To bring about the energy transformation, it sees a need to invest about 99 billion euros between now and 2050 or else this will be added on the list of renewable energy scam, but it says the financial gains are much greater. Renewable energy has no fuel costs; the fuel cost savings in the energy evolution scenario reach a total of 3, 010 billion euros up to 2050, or 75 billion per year. Another benefit is job-creation, one of the
Crown Capital Management Jakarta Indonesia: Human Thirst Makes Earth Quake - Crown Capi... - 0 views
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"Human Thirst Makes Earth Quake - Crown Capital Eco Management Renewable Energy Scam Human Thirst Makes Earth Quake http://crowncapitalmngt.com/blogpdf/Human_Thirst_Makes_Earth_Quake.pdf As we all know earthquake is a catastrophic natural disaster. Most earthquake-related deaths are caused by the collapse of structures and the construction practices play a tremendous role in the death toll of an earthquake. In southern Italy in 1909 more than 100,000 people perished in an earthquake that struck the region. Almost half of the people living in the region of Messina were killed due to the easily collapsible structures that dominated the villages of the region. Though there are some ways to prevent this from happening, it can never be considered as risk avoidance. A larger earthquake that struck San Francisco three years earlier had killed fewer people (about 700) because building construction practices were different type (predominantly wood). Survival rates in the San Francisco earthquake was about 98%, that in the Messina earthquake was between 33% and 45%) (Zebrowski, 1997). Even a moderate rupture beneath a city with structures unprepared for shaking can produce tens of thousands of casualties. Due to this fact, Crown Eco Managementdetermined that safety measures for this could not be compared to fraud prevention. Although probably the most important that we should know, direct shaking effects are not the only hazard associated with earthquakes, other effects such as landslides, liquefaction, and tsunamis have also played important part in destruction produced by earthquakes. According to the Crown researchers, some earthquakes are not natural. Human beings can actually cause them. That's the case with an earthquake in Lorca, Spain, last May. The quake measured 5.1 on the Richter scale and killed nine people. According to an analysis published in Crown Eco Management, the Lorca quake was caused by the extraction of groundwater from an aquifer near the faul
Chevron case may hurt investments: Official - Jakarta Post | Crude News - 0 views
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"Chevron case may hurt investments: Official Jakarta Post The ongoing investigation over alleged fraudulent practices within energy giant Chevron's environmental remediation project in Riau province may harm the investment climate in the Indonesia's oil and gas sector, a top official has said. Upstream oil … "
Newest Presentations on the Crown Capital Management Jakarta Indonesia Channel - 0 views
Crown Capital Management Jakarta Indonesia | Giant mammoth carcass in Siberia... - 0 views
Crown Capital Management Jakarta Indonesia « Crown Capital Management Jakarta... - 0 views
Crown Capital Management Jakarta Indonesia | Flooded summer season, Atlantic ... - 0 views
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"Crown Capital Management Jakarta Indonesia | Flooded summer season, Atlantic Ocean blames http://alysiapower27.blog.fc2.com/blog-entry-4.html Flooded summer season, Atlantic Ocean blames http://blog.crowncapitalmngt.com/flooded-summer-season-atlantic-ocean-blames/ Northern Europe picks on the Atlantic Ocean because of its wet summer according to a new study. The rising and falling of ocean temperature or the so called cyclical deception is seen as a major extortion on the weather. The said pattern reported will last long as the Atlantic warming persists. The research was carried out at the University of Reading and is published in the journal Nature Geoscience. The cycle of scheme investigated was known as the Atlantic Multidecadal Oscillation. This change sees the waters warm or cool over a period of several decades. The researchers compared three periods in this cycle: a warm state from 1931-60, a cool period from 1961-90 and the most recent warm period starting in 1990 and continuing now. The paper notes that conditions in the last warm period in the Atlantic are broadly similar to those pragmatic now. So the study compared weather conditions in Europe during the two warm Atlantic phases with those oppressed in the cool phase. One conclusion is that a warmer-than-usual Atlantic "favors a mild spring (especially April), summer and autumn, in England and across Europe." Another finding - of greatest relevance to the search for a cause of rainy summers - is that the warmth of the ocean also tends to make northern and central Europe abuse than usual. By contrast southern Europe, from Portugal to Turkey, makes victim of far less rain than normal."
Crown Capital Management Jakarta Indonesia - 0 views
Crown Eco Management Flooded summer season, Atlantic Ocean blames | Crown Eco Management - 0 views
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"Flooded summer season, Atlantic Ocean blames Northern Europe picks on the Atlantic Ocean because of its wet summer according to a new study. The rising and falling of ocean temperature or the so called cyclical deception is seen as a major extortion on the weather. The said pattern reported will last long as the Atlantic warming persists. The research was carried out at the University of Reading and is published in the journal Nature Geoscience. The cycle of scheme investigated was known as the Atlantic Multidecadal Oscillation. This change sees the waters warm or cool over a period of several decades. The researchers compared three periods in this cycle: a warm state from 1931-60, a cool period from 1961-90 and the most recent warm period starting in 1990 and continuing now. The paper notes that conditions in the last warm period in the Atlantic are broadly similar to those pragmatic now."
Giant mammoth carcass in Siberian frost : Crown Capital Management Jakarta Indonesia - 0 views
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Giant mammoth carcass in Siberian frost
http://blog.crowncapitalmngt.com/giant-mammoth-carcass-in-siberian-frost/
Yevgeny Salinder, an 11-year old Russian b
Disclaimer | Crown Eco Management - 0 views
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"Crown Capital Eco Management group does not guarantee that any transmission of data over the Internet is completely secure. We cannot ensure or warrant the security of any information you transmit to us and such transmission is done at your own risk. And while it is our responsibility to minimize, at best, the disruption caused by technical errors, some data on this site may have been structured in formats that are not bug-free. Thus, we cannot guarantee that our website will not be interrupted. This website and all its content included in or linked to this website are provided in an "as is" and "as available" basis, with no warranties or representations of any kind (express, implied and statutory, including but not limited to the warranties of title and noninfringement and the implied warranties of merchantibility and fitness for a particular purpose), all of which Crown Eco Group disclaims to the fullest extent permitted by law. Your use of this website and its content is at your sole risk. To the fullest extent permitted under relevant law, in no event shall Crown Capital Eco Management Group or its employees be liable for any damages (including, without limitation, consequential, special, incidental, indirect or similar damages, personal injury, profit and data loss, business interruption or any other commercial damages or losses) arising out of or in relation with the use or performance of this website or its content. Upon a request by the Crown Eco Group, you agree to indemnify, defend and hold harmless the Crown Eco Group and its employees and agents from all claims, liabilities and expenses that may arise from your use or misuse of our site."
Crown Eco Management A solution for Asian carp infestation | Crown Eco Management - 0 views
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"A solution for Asian carp infestation Brought from the East to aid in managing aquatic plants in aquaculture industries, Asian carp has been unwittingly introduced to freshwater sources of the US. Today, they are seen as a big problem in the fishing industry for their big appetite and fast breeding, overshadowing other fish for space and food in lakes. Asian carp presence has been recorded in around 18 states and are already established in the areas of Missouri and Illinois. The fish threatening to mess with the USD 7 billion sport and commercial fishing industry of the Great Lakes can grow up to 100 pounds and measure over 4 feet. Some are saying that the easy solution for this is closing the canal systems and any other point of entry of asian carps. However, such a step will certainly cost billions, not only in construction but also in lost profit from boat traffic that uses the canal system. Last resort options to prevent upsetting the marine biodiversity in the Great Lakes are harmful to other industries and would also worsen the road traffic, ergo an increase in carbon emissions. The Asian Carp Control Strategy Framework of the government is set to allocate USD 51.5 billion to protect the Great Lakes from the asian carp infestation. This program apparently involves methods to kill or drive them away, from poison pellets to soundwave-shooting underwater guns. A more permanent and beneficial solution seems to be to catch the asian carps and turn them into foodstuffs like what Schafer Fisheries in Illinois is doing. Schafer has been selling 10 million lbs of asian carp across the world, satisfying a demand for them in other parts of the world while helping their locality get rid of a major headache. Asian carps can be processed into food products like sausage, jerk, hotdogs and can also be included in fertilizers. Even if this one industry will not be enough to totally stop the proliferation of Asian carp, it can at least be a major step in finding a sol
Constitutionality of Renewable Energy Mandates in Question
Source : http://www.thecrownmanagement.com/constitutionality-of-renewable-energy-mandates-in-question-2/
In a potentially crushing strike against advocates for renewable energy mandates, a federal court ruling recently raised the issue of constitutionality of major provisions of many states’ renewable energy mandates.
On June 7, 2013, U.S. Circuit Court of Appeals upheld the Federal Energy Regulatory Commission’s (FERC) position against the state of Michigan (and other petitioners) in a disagreement over FERC’s proposal to distribute costs for new power lines to supply millions of megawatts of wind power in the Great Lakes area. Michigan believes that this plan would, in essence, require them to pay for expensive new power lines intended for transmitting renewable energy out of the state. Based on the law establishing Michigan’s 2008 Renewable Energy Standard, only renewable energy generated inside its state borders is qualified to fulfill Michigan’s obligation to utilize 10% of eligible renewable energy sources by 2015.
Speaking for the Court, Judge Richard Posner ruled:
“Michigan’s first argument—that its law prohibits it from crediting wind power from out of state in favor of the state’s obligated use of renewable energy by its utilities—trips over an unbreakable constitutional precedence. Michigan cannot, without violating Article I of the commerce clause of the Constitution, discriminate against out-of-state renewable energy (emphasis added).”
Thirty states, including the District of Columbia, have mandates on renewable energy that require electric companies to purchase a certain quota or percentage of renewable energy by a projected year. Just like Michigan which has a clear ban on wind produced in other states from being allowed into their mandate, other states also “discriminate” against out-of-state renewable power. When counting mandate compliance, several states count in-state power at a higher rate than out-of-state power, a practice popularly labelled as “multipliers”:
Delaware has a 300% credit multiplier for customer-sited, in-state photovoltaic (PV), a 350% multiplier for a specific offshore wind project, and a 150% multiplier for all other in-state wind projects;
Colorado applies a 1.25 multiplier for its in-state generation;
Michigan provides an extra 0.1 credit for projects that use state-available components and its local workforce;
Missouri grants a 1.25 multiplier for all in-state generation.
Kansas uses a 1.1 multiplier for all in-state resources;
Moreover, some state renewable policies have a list of renewable energy grades, where certain power sources can only be utilized to fulfill a part of the mandate. Others have grade levels dedicated particularly to in-state power generation that may now be doubtful in view of the recent decision by the federal court:
New Mexico’s Tier V applies to customer-sited resources;
Massachusetts’ Tier IV exclusively applies to in-state PV projects;
New York’s Tier II covers customer-sited resources.
The new ruling is significant since one of the main points raised by mandate proponents is the creation of jobs in the concerned state. Certainly, these claims merely consider the overall “green” jobs provided, while totally neglecting the loss of net jobs resulting from increased electricity rates arising from these mandates. The federal court ruling might just end up nullifying the argument for in-state green-job employment since renewable power can be imported out-of-state to comply with the mandate.
Lawmakers in these states with power mandates may now question the value of raising electricity rates on their state power consumers for the purpose of subsidizing “green” job creation in another state nearby. In the end, what this ruling has done is to unravel the problems and complexities with a market for renewables that has been created through government policies.
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