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Javier E

Opinion | The Green Transition Is Happening Fast. The Climate Bill Will Only Speed It U... - 0 views

www.nytimes.com/...uction-act-climate-change.html

bill law 2022 IRA climate change response energy politics policy economics

shared by Javier E on 18 Aug 22 - No Cached
  • Among the first things you likely heard about the Inflation Reduction Act was its size.The bill, signed into law by President Biden on Tuesday, makes $369 billion in climate and energy investments — by far the largest such investment in American history.
  • But there are several ways to measure the size of a bill, and given how high the country’s emissions targets are, even many of the I.R.A.’s supporters will openly concede that it is, on its own, inadequate
  • it is ultimately how much carbon we put into the atmosphere and not how much solar power we produce that determines the future of warming. But the power of carrots also just reflects some new realities: To simplify radically, a 90 percent reduction in the cost of solar power over the last decade means that the same amount of money now goes ten times as far.
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  • the broader economic and cultural landscape is so different now than it was just a few years ago that public investments of even this somewhat smaller scale appear poised to make an enormous difference.
  • That’s because those public investments are being made not against dirty-energy headwinds but with the support of much broader tailwinds
  • Thanks to technological change and the plunging cost of renewables, a growing political and cultural focus on decarbonization and increasing awareness of the public health costs of pollution and market trends for things like electric vehicles and heat pumps, it’s genuinely a whole new world out there. Not that long ago, the upfront cost of a green transition looked almost incalculably large. Today it seems plausible that quite dramatic emissions gains can be achieved for just, say, $369 billion
  • For 90 percent of the world, clean energy is now cheaper than dirty alternatives, and while countries like Spain are boasting about more than tripling solar power capacity by 2030, in Texas, solar output has grown 39-fold in just six years. Globally, renewable output has grown fourfold in the past decade
  • Ten years ago, when the United States endeavored to tackle the problem of climate change, it tried to do so largely by punishing the cost of dirty energy with a cap-and-trade system. This time, it’s giving a kick-start, or a boost of momentum, to an already ongoing green transition.
  • this strategic choice of carrots rather than sticks has received some deserved praise: It’s better and more popular to subsidize cheap, clean energy than it is to make the bad stuff more expensive
  • A “fair share” analysis suggests the United States — today the world’s second largest emitter, and historically the largest by far — should be moving faster than any nation in the world.
  • The models may ultimately prove optimistic, given the complications of infrastructure build-out
  • it is fair to wonder about the uncertain economics of some of the bill’s technological bets, like carbon capture and storage, which could allow emissions from industry and power generation to be trapped and sequestered, and which some climate activists and environmental justice advocates distrust
  • Jesse Jenkins, who leads the REPEAT Project, says he believes that the tech problems of C.C.S. have been solved and that, with tax credits, the bill will address its cost problem, leading to a dramatic scale-up in use. Julio Friedmann, a former Obama-era Energy Department official turned carbon removal advocate, says that a rapid scale-up of C.C.S. would be, while miraculous, also plausible.
  • the fact that this much climate progress appears even remotely possible for less than the annualized budget of the State Department, as Ben Dreyfuss recently put it, is a remarkable reflection of the state of green energy today, even without the new law. When it comes to emissions, we are no longer fighting an uphill battle, at least in the United States and many other countries like it. We are deciding how quickly to race downhill.
  • at the risk of playing Pollyanna, I think it is also possible to see the size of the bill — its relative smallness — as at least a mark of good news
  • The headline projection of the I.R.A. impact appears, if inadequate by the standards of the Paris agreement, nevertheless impressive: a 40 percent reduction in just eight years
  • already today the United States has reduced emissions 20 percent from 2005 levels, and was projected to reduce them further even without the benefit of the I.R.A. As recently as a few weeks ago, before the bill was revived, it might have felt like the United States was permanently stalled on climate action, but in fact the country was already moving to decarbonize, if not fast enough.
  • peed really matters; as the writer and activist Bill McKibben put it, when it comes to warming, “winning slowly is the same as losing.” Simply moving in the right direction isn’t enough, and too much time has been squandered — within the United States and globally — to avoid what was once described as a catastrophic climate future.
  • If the United States achieves that 40 percent reduction, that’s still well short of the country’s target of a 50-52 percent reduction by 2030. The gap may seem relatively small, but it represents more than half a billion tons of carbon each year. That’s a lot.
  • the I.R.A. is a compromise, obviously and outwardly, tying new leases for wind power development to new ones for oil and gas, only moderately reducing the country’s demand for oil and gas over the next decade and investing less in environmental justice measures than Biden himself promised not too long ago
  • But its basic bet — that many of these markets and technologies are close enough to tipping points that relatively small public support can get them racing toward inevitability — also means the ultimate impacts could be larger and far-reaching.
  • The effects on prices and markets could make state and local action cheaper and easier, and even federal regulation more palatable
  • the bill includes some unheralded provisions to help retire coal power more quickly, as Keane Bhatt, the policy director for the Progressive Caucus, has pointed out, as well as an under-discussed “stick” in the form of a fee for methane
  • The impact of its “green bank” and Energy Department loans could be quite large — some estimates have suggested they could run into the hundreds of billions, and the $27 billion handed to the Green Bank could catalyze ten times as much private capital
  • because much of the I.R.A.’s top-line “investment” comes in the form of tax credits, its outlays — and impacts — could ultimately grow substantially if certain sectors (wind, solar and C.C.S., for instance) really do take off.
  • This might not ultimately be just a $369 billion package, in other words, but something quite a bit bigger. Enough to get us to 50 percent by 2030? “I think we have a pretty good chance,” Jenkins says.
  • it is striking that, given where we were not that long ago, such a proposition seems credible at all. Here’s hoping.
  • The provisions tying future auctions for wind power to leases for oil and gas development have been called “poison pills,” because they appear to lock in future emissions. But the ultimate impact is likely to be quite small. (Energy Innovation estimates at most 50 million tons of additional annual carbon emissions, compared with a billion in reductions from other measures in the bill.)
Javier E

No Rich Child Left Behind - NYTimes.com - 0 views

opinionator.blogs.nytimes.com/...no-rich-child-left-behind

education inequality early learning

shared by Javier E on 20 Jun 13 - No Cached
  • In the 1980s, on an 800-point SAT-type test scale, the average difference in test scores between two such children would have been about 90 points; today it is 125 points. This is almost twice as large as the 70-point test score gap between white and black children. Family income is now a better predictor of children’s success in school than race.
  • e proportion of students from upper-income families who earn a ba
  • chelor’s degree has increased by 18 percentage points over a 20-year period, while the completion rate of poor students has grown by only 4 points.
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  • new research by the Harvard political scientist Robert D. Putnam and his colleagues shows that the rich-poor gaps in student participation in sports, extracurricular activities, volunteer work and church attendance have grown sharply as well.
  • average test scores on the National Assessment of Educational Progress, the so-called Nation’s Report Card, have been rising — substantially in math and very slowly in reading — since the 1970s.
  • The most potent development over the past three decades is that the test scores of children from high-income families have increased very rapidly.
  • the rich now outperform the middle class by as much as the middle class outperform the poor. Just as the incomes of the affluent have grown much more rapidly than those of the middle class over the last few decades, so, too, have most of the gains in educational success accrued to the children of the rich.
  • For the past few years, alongside other scholars, I have been digging into historical data to understand
  • It’s not just that the rich have more money than they used to, it’s that they are using it differently. This is where things get really interesting.
  • The widening income disparity in academic achievement is not a result of widening racial gaps in achievement, either. The achievement gaps between blacks and whites, and Hispanic and non-Hispanic whites have been narrowing slowly over the last two decade
  • schools don’t seem to produce much of the disparity in test scores between high- and low-income students.
  • That isn’t to say that there aren’t important differences in quality between schools serving low- and high-income students — there certainly are — but they appear to do less to reinforce the trends than conventional wisdom would have us believe.
  • The academic gap is widening because rich students are increasingly entering kindergarten much better prepared to succeed in school than middle-class students. This difference in preparation persists through elementary and high school.
  • one part of the explanation for this is rising income inequality
  • the incomes of the rich have grown faster over the last 30 years than the incomes of the middle class and the poor. Money helps families provide cognitively stimulating experiences for their young children because it provides more stable home environments, more time for parents to read to their children, access to higher-quality child care and preschool
  • The average 9-year-old today has math skills equal to those her parents had at age 11, a two-year improvement in a single generation. The gains are not as large in reading and they are not as large for older students, but there is no evidence that average test scores have declined over the last three decades for any age or economic group.
  • High-income families are increasingly focusing their resources — their money, time and knowledge of what it takes to be successful in school — on their children’s cognitive development and educational success. They are doing this because educational success is much more important than it used to be, even for the rich.
  • even though middle-class and poor families are also increasing the time and money they invest in their children, they are not doing so as quickly or as deeply as the rich.
  • from 1972 to 2006 high-income families increased the amount they spent on enrichment activities for their children by 150 percent, while the spending of low-income families grew by 57 percent over the same time period
  • the amount of time parents spend with their children has grown twice as fast since 1975 among college-educated parents as it has among less-educated parents.
  • much of our public conversation about education is focused on the wrong culprits: we blame failing schools and the behavior of the poor for trends that are really the result of deepening income inequality and the behavior of the rich.
  • not only are the children of the rich doing better in school than even the children of the middle class, but the changing economy means that school success is increasingly necessary to future economic success, a worrisome mutual reinforcement of trends that is making our society more socially and economically immobile.
  • the rapid growth in the rich-poor educational gap provides a ray of hope: if the relationship between family income and educational success can change this rapidly, then it is not an immutable, inevitable pattern. What changed once can change again. Policy choices matter more than we have recently been taught to think.
  • how can we move toward a society in which educational success is not so strongly linked to family background? Maybe we should take a lesson from the rich and invest much more heavily as a society in our children’s educational opportunities from the day they are born. Investments in early-childhood education pay very high societal dividends. That means investing in developing high-quality child care and preschool that is available to poor and middle-class children. It also means recruiting and training a cadre of skilled preschool teachers and child care providers.
  • improving the quality of our parenting and of our children’s earliest environments may be even more important. Let’s invest in parents so they can better invest in their children.
  • Fundamentally, it means rethinking our still-persistent notion that educational problems should be solved by schools alone.
Javier E

The Entitled Generation - NYTimes.com - 0 views

www.nytimes.com/...r-the-entitled-generation.html

US economics policy investment entitlements trends

shared by Javier E on 30 Jul 12 - Cached
  • Third Way, the centrist Democratic think tank
  • The authors examined two categories of federal spending over the past 50 years, representing two of government’s fundamental missions. One was “investments,” which includes maintaining our national infrastructure, keeping our military equipped, helping assure that our work force is educated to a high standard, and underwriting the kind of basic scientific research that is too risky or long-term to attract private money. The report calls this the legacy of President Kennedy’s New Frontier, though the largest infrastructure project in our history, the interstate highway system, was Eisenhower’s baby, a reminder of the days when Republicans still believed in that stuff. The other category was “entitlements,” a catchall word for the safety-net programs that provide a measure of economic stability for the aging and poor: Social Security, Medicare, Medicaid, etc. You will not be surprised to hear that the red line tracking entitlements goes up while the blue line reflecting investments goes down.
  • In 1962, we were laying down the foundations of prosperity. About 32 cents of every federal dollar, excluding interest payments, was spent on investments, only 14 percent on entitlements. In the mid-70s the lines crossed. Today we spend less than 15 cents on investment and 46 cents on entitlements. And it gets worse. By 2030, when the last of us boomers have surged onto the Social Security rolls, entitlements will consume 61 cents of every federal dollar, starving our already neglected investment
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  • “We’ve reached the point where our working-age population over the next 30 years grows by one-fifth, and our elderly population grows 100 percent,” said Jim Kessler, the senior vice president for policy at Third Way.
  • So the question is not whether entitlements have to be brought under control, but how
  • At least the Republicans have a plan. The Democrats generally recoil from the subject of entitlements. Centrists like those at Third Way and the bipartisan authors of the Simpson-Bowles report endorse a menu of incremental cuts and reforms that would bring down costs without hitting the needy or snatching away the security blanket from those nearing retirement.
Javier E

Give Malta Your Tired and Huddled, and Rich - NYTimes.com - 0 views

www.nytimes.com/...ired-and-huddled-and-rich.html

citizenship purchase european

shared by Javier E on 01 Feb 14 - No Cached
  • Motivated in part by economic stress, and in part by what some call crass opportunism, the idyllic island 50 miles south of Sicily is selling citizenship for $880,000 in cash and $677,000 in property and investments to applicants 18 or older willing to pay the price.
  • the program, which is aimed at attracting well-heeled residents from abroad, could bring in $1.35 billion in the next five years, providing welcome financing for schools, health care and jobs.
  • Being a citizen of Malta, which is part of the European Union’s passport-free zone, will confer the right to travel among the union’s 27 other member states without border formalities. A newly minted Maltese citizen will also be able to live and work in another European Union country, and will gain the right to visa-free travel to 69 non-European Union countries, including the United States.
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  • Under pressure from European Union officials in Brussels, Malta this week agreed to require foreigners seeking to buy Maltese passports to be residents for at least one year. It has also vowed to carefully vet applicants. Yet initial plans to limit to 1,800 the number of passports granted have been scrapped.
  • Cyprus recently slashed the amount of investment required to be eligible for citizenship, to $4.06 million from $13.5 million. It is also offering citizenship to foreigners who lost at least €3 million during the recent bailout crisis.
  • The Caribbean island federation of St. Kitts and Nevis offers citizenship for those who can invest $250,000
  • Portugal and Belgium offer residency permits leading to citizenship in exchange for big investments.
  • Crisis-hit Spain offers residency permits to foreigners who buy homes worth more than $260,000, with the aim of drawing Chinese and Russian investment.
Javier E

Silicon Valley Powered American Tech Dominance-Now It Has a Challenger - WSJ - 0 views

www.wsj.com/...it-has-a-challenger-1523544804

silicon valley china financing vc startup tech

shared by Javier E on 13 Apr 18 - No Cached
  • Asian investors directed nearly as much money into startups last year as American investors did—40% of the record $154 billion in global venture financing versus 44%,
  • Asia’s share is up from less than 5% just 10 years ago.
  • That tidal wave of cash into promising young firms could herald a shift in who controls the world’s technological innovation and its economic fruits, from artificial intelligence to self-driving cars.
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  • Many Chinese tech companies are “at this critical size that the China market alone is not enough to support their business and valuation,
  • The surge also positions Asia’s investors to win stakes in markets that Western companies covet, or that have national security implications.
  • . “If you think that being the locus of invention gives you a boost to your GDP and so forth, that’s a deterioration of the U.S. competitive advantage.”
  • Although one of the biggest Asian investors is Japan’s SoftBank Group Corp. , which has tapped Middle Eastern money to create the world’s largest tech-investment fund, it is Chinese activity that is having the greatest impact.
  • China is creating unicorns—startups valued at a billion dollars or more—at much the same pace as the U.S., drawing on funding from internet giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as well as more than a thousand domestic venture-capital firms that have raised billions of dollars a year for the past few year
  • Chinese-led venture funding is about 15 times its size in 2013, outpacing growth in U.S.-led financing, which roughly doubled in that time period
  • Most Chinese-led investment so far has gone to the country’s own firms, the Journal analysis found. Many of them, like the Yelp equivalent Meituan-Dianping, are household names with millions of customers in China, yet virtually unknown elsewhere.
  • The rise of China’s venture market “signifies a shift from a single-epicenter view of the world to a duopoly,” he says.
  • Madhur Deora, chief financial officer for Paytm, one of India’s biggest e-payments firms, says the company approached Alibaba affiliate Ant Financial instead of U.S. backers for funding in 2015 because Chinese mobile-internet innovations are “way far ahead of anything that’s happened in the U.S.
  • One reason China’s push into new technologies worries many in the U.S. is that, unlike the hunt for good returns that underpins most Western venture finance, a lot of Chinese investment is driven by strategic interests, some carrying the specter of state influence.
  • China is pushing hard into semiconductors, for which the government has provided billions of dollars in public funding, and artificial intelligence, where Beijing in July set a goal of global leadership by 2030
  • Mr. Lee, the venture investor, predicts that in the next five to 10 years Chinese tech companies will become pacesetters for tech-related development, vying with the likes of Alphabet Inc.’s Google and Facebook for dominance in markets outside the English-speaking world and Western Europe.
  • “All the rest of the world will basically be a land grab between the U.S. and China,
  • “The U.S. approach is: We’ll build a better product and just win over all the countries,” says Mr. Lee. The Chinese approach is “we’ll fund the local partner to beat off the American companies.”
  • Asia’s rise as a startup financier is even starker in the biggest venture investments—those of $100 million or more. These megadeals have become an increasingly important part of venture finance as valuations have ballooned, with their proportion of deal volume growing from around 8% in 2007 to around half of the total last year.
  • In Southeast Asia, a flood of Chinese money into local startups—such as the $1.1 billion Alibaba-led investment into Indonesian online marketplace PT Tokopedia last year—is drawing the region closer to China
  • Chinese money is also playing a big role in India, which, with a population of 1.2 billion, has been described as the next big internet market. Chinese and Japanese investors each led nearly $3 billion in venture finance in India last year, ahead of the nearly $2 billion in deals led by U.S. investors
  • “Think of strategic investments and M&A as playing a game of go,” said Mr. Tsai, the Alibaba executive vice chairman, at the investor conference last year. “In a game of go the strategic objective is to put your pieces on the chessboard and surround your opponent.”
Javier E

Can We Be Brutally Honest About Investment Returns? - MoneyBeat - WSJ - 0 views

blogs.wsj.com/...onest-about-investment-returns

investor return interest investment history economic financial

shared by Javier E on 20 Jan 18 - No Cached
  • Pension funds have fantastical expectations of the market
  • With U.S. stocks at all-time highs, it’s more important than ever that investors be brutally realistic about future returns.
  • You can learn a lot from these folks — if you listen to them and then do the opposite.
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  • A new study by finance professors Aleksandar Andonov of Erasmus University Rotterdam and Joshua Rauh of Stanford University looks at expected returns among more than 230 public pension plans with more than $2.8 trillion in combined assets.
  • For their portfolios, generally consisting of cash, U.S. and international bonds and stocks, real estate, hedge funds and private-equity or buyout funds, these pension plans report that they will earn an average of 7.6% annually over the long term. (That’s 4.8% after their estimates of inflation.) These funds often define “long term” as between 10 and 30 years.
  • Based on how they divvy up their money, how much are these pension funds assuming specific assets will earn?
  • They expect cash to return an average of 3.2% annually over the long run; bonds, 4.9%; such “real assets” as commodities and real estate, 7.7%; hedge funds, 6.9%; publicly traded stocks, 8.7%; private-equity funds, 10.3%.
  • consider bonds. The simplest reliable indicator of how much you will earn from a portfolio of bonds in the future is their yield to maturity in the present. With 10-year Treasurys yielding 2.6% and investment-grade corporate bonds averaging under 3.7%, it would take a near-miracle today to get anything close to 4% out of a high-quality fixed-income portfolio.
  • That’s below the U.S. average of 10.2% annually over the past 90 years. But stocks were far cheaper over most of that period than they are today, so their returns were naturally higher.
  • stocks aren’t likely to earn more than an average of 5.9% annually over the long run from today’s lofty prices.
  • Among those, the least implausible scenario is higher inflation. So the pension funds could hit their 8.7% stock return that way — but such a surge in the cost of living would crimp their bond returns. What they would gain on their stocks they would lose on their bonds.
  • the new study of estimated returns finds that the older a pension fund’s holdings of private equity are, the more likely its officials are to extrapolate those returns — as if the good times of the early 2000s, when deals abounded and buyouts were cheaper, were still rolling.
  • Why do expectations among pension plans run so high? Because they have to, the chief investment officer of a large public pension plan tells me. State laws guarantee generous retirement benefits for millions of current and former government employees. To appear as if they can meet those obligations, the pension plans have no choice but to set their expected returns higher than reality is likely to deliver.
  • That’s the exact opposite of what the rest of us should do. Sooner or later, investors who build their expectations on hope rather than on arithmetic end up sorry.
Javier E

How China's Tencent Avoided an Antitrust Push, For Now. - The New York Times - 0 views

www.nytimes.com/...china-tencent-monopoly.html

china tech internet company Tencent

shared by Javier E on 02 Jun 21 - No Cached
  • There’s no company in the world like Tencent. It’s a true monopoly on many levels. It wields the kind of influence in China that Facebook, Amazon, Apple and Google can only aspire to.
  • Tencent is a mega entertainment platform. It is the world’s largest online game company, owning stakes in Riot Games and Epic Games. It owns China’s biggest online video, music and online literature businesses, too.
  • Tencent is a venture capital investor. In 2020, it lagged only Sequoia Capital, the Silicon Valley investment firm, in terms of the number of unicorns — start-ups valued at over $1 billion — it has invested in, according to the Hurun Report, a Shanghai research firm.
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  • it has invested in more than 800 companies, including a 12 percent stake in Snap and 5 percent in Tesla. By comparison, GV, formerly Google Ventures and the most active corporate venture capital arm in the United States, has invested in more than 500 companies.
  • Most important, Tencent is a platform operator. It runs WeChat, a mobile messaging app with social media and financial services abilities.
  • WeChat needs other companies to keep its one billion users glued to the app. An operating system and an app store in its own right, WeChat allows users to run miniprograms created and run by other companie
  • Those users can make purchases using WeChat’s payment system. Tesla, Airbnb and Starbucks all have their own WeChat miniprograms. So do most of major Chinese websites — barring those that WeChat forbids.
  • Friendly companies build miniprograms for WeChat. Tencent invested in China’s ride-sharing and bike-sharing companies because their users pay frequently, and Tencent wanted them to use WeChat Pay.
  • No matter how decent or humble Tencent may act, it’s a giant conglomerate with $24 billion in profit last year and spends much of it on investment. It picks winners and losers, but the winners won’t always be the best out there, thus harming innovation and efficiency.
  • It limits user access to other products and services. Its WeChat app doesn’t allow users to share links for merchandise on Alibaba’s Taobao online marketplace or for short videos on Douyin, TikTok’s Chinese sister company.
  • Tencent doesn’t just court the industry. It has also long tried to get close to the government. Compared with the sometimes defiant Alibaba, Tencent has long publicly underscored its willingness to comply fully with rules and regulations.
  • In April, the company said it would spend $7.8 billion on green energy, education, village revitalization and other pet topics of President Xi Jinping. In the view of Hong Bo, an internet commentator, Tencent is acting for self-preservation.
Javier E

Hank Paulson to Run Climate-Focused Fund at TPG - The New York Times - 0 views

www.nytimes.com/...hank-paulson-climate-fund.html

finance climate fund wall street

shared by Javier E on 06 Jan 21 - No Cached
  • Mr. Paulson, who intends to devote at least 50 percent of his time to his new role, plans to leverage his relationships around the globe to work with governments and industry to raise money and find investments.
  • The early returns from TPG’s existing Rise funds — $2 billion of which are in climate-related investments — appear to suggest that socially responsible investing can be just as profitable as other approaches. Mr. Coulter said that with the reduction in the cost of solar energy — for example, bringing it to parity with the cost of building a new gas plant in some places in the United States — the opportunity to make attractive new investments has fundamentally changed.
  • He said he was seeing similar opportunities in electric vehicles and the energy grid that powers them, in agriculture and in consumer packaged goods.
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  • In the public markets, investors are throwing money at companies like Tesla and others that have positive environmental, social and governance models. However, there is not enough of a pipeline of climate-focused businesses ready to go public, Mr. Paulson said: “We need more high-quality investment opportunities from private equity investments that have the potential to become scalable public companies.”
Javier E

American travelers are buying foreign passports amid coronavirus pandemic - The Washing... - 0 views

www.washingtonpost.com/...g-another-countrys-citizenship

passport citizenship travel international

shared by Javier E on 29 Jul 20 - No Cached
  • travel restrictions are producing an emerging trend among some wealthy Americans: buying a second passport.
  • “This limitation of mobility has made more people aware of ... the benefits of having more than one passport,”
  • Arton says his firm has seen a 30 to 40 percent increase, year to date, in demand for services that help clients obtain citizenship in a sovereign state through financial means. The price tag for these services varies, ranging from $100,000 for some Caribbean options to more than $2 million for European ones.
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  • The concept is about 35 years old, Arton says. Today there are approximately 25 countries, including Portugal, Dominica and the United Kingdom, that offer forms of residency or citizenship-by-investment programs as a revenue source.
  • “We’ve had Americans contacting us and saying, ‘Listen, I cannot believe that my American super passport cannot get me into as many countries as it used to before. What can I do?’ ” Arton says. “That was never the case for us before.”
  • Arton’s new clients fear that if the pandemic carries on for another year or two, they will be trapped by their U.S. passports, so they’re seeking out second passports from countries with investment migration programs.
  • mid-pandemic, motivations have shifted. Some of Arton Capital’s American clients are in mixed-nationality relationships where couples have been separated because of pandemic travel bans. Others are worried about the impact of U.S. politics on their passport’s global standing.
  • The United States was an early adopter of the program. In 1990, the government created the EB-5 Immigrant Investor Visa Program, which has received nearly 80,000 applicants since. However, Arton says interest in the investment migration program has decreased drastically because of a recent cost increase, the program’s long approval process and the U.S. government’s fluctuating immigration legislation.
  • investment migration “is a way for sovereign states to raise debt-free capital and also to drive further foreign direct investment — and combine these programs with other policy areas — to really enhance investment in certain industries.”
  • The application takes months, if not years, to process, and it includes a thorough investigation into a person’s private and financial life.
  • On occasion, they may find incriminating information during an investigation, and advisers will contact a client to say, “‘Never, ever walk through our doors again. We’re burning all these files.’
  • part of the reason for the St. Lucia program’s intense vetting is to uphold the value of the country’s passport. It’s in St. Lucia’s best interest to stay in good standing with the 146 countries that allow St. Lucian passport holders visa-free travel.
Javier E

Why Uber's business model is doomed | Employment | The Guardian - 0 views

www.theguardian.com/...my-uber-lyft-insecurity-crisis

employment automation tech labor investment history economy

shared by Javier E on 24 Aug 20 - No Cached
  • The truth is that Uber and Lyft exist largely as the embodiments of Wall Street-funded bets on automation, which have failed to come to fruition. These companies are trying to survive legal challenges to their illegal hiring practices, while waiting for driverless-car technologies to improve. The advent of the autonomous car would allow Uber and Lyft to fire their drivers.
  • Having already acquired a position of dominance with the rideshare market, these companies would then reap major monopoly profits. There is simply no world in which paying drivers a living wage would become part of Uber and Lyft’s long-term business plans.
  • Only in a world where more profitable opportunities for investment are sorely lacking can such wild bets on far-flung futuristic technologies become massive multinational companies. Corporations and wealthy individuals have accumulated huge sums of money and cannot figure out where to put it because returns on investments are extremely low
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  • The flip side of falling rates of business investment is a slackening pace of economic growth, which economists have termed “secular stagnation.” It’s this decades-long slowdown that has generated the insecure labour force on which Uber and Lyft rely.
  • This fight for workers’ rights is grounded in a growing recognition that the expansion of the digital economy does not simply reflect the triumph of an unstoppable technological change. Behind Silicon Valley rhetoric, much of what appears to be technological innovation turns out to be a means of circumventing legal regulations, including minimum wage laws
  • That governments turned a blind eye to Uber and Lyft’s misbehaviour for so long is no surprise. Governments are complicit in making workers more vulnerable. Facing persistently slow economic growth and high rates of unemployment, governments have spent decades trying to coax companies to invest by making it easier to deny workers’ benefits and to avoid paying taxes.
  • Capitalist economies have been able to extend security to widening circles of workers only in periods of rapid economic growth, when low rates of unemployment made it possible for more and more workers to demand better wages and working conditions.
  • High rates of economic growth in the mid-20th century – the reference point for any politics that seeks to restore economic growth in the present – were premised on a historically exceptional period. The restoration of stable international trade following two world wars made possible the largest growth of economic productive capacity in human history, not just in Europe and the United States, but worldwide
  • By the 1970s, rapid expansion had given way to worsening global overcapacity, resulting in rising competition and falling rates of investment in internationally traded goods. People were left scrambling for work in the growing service sector, where the potential for labour productivity growth, and hence economic growth, is significantly lower.
  • By misclassifying its workers, Uber avoided paying hundreds of millions of dollars into US state unemployment insurance schemes. Yet during the Covid-19 economic crisis, Uber lobbied the federal government to step in and pay its drivers’ unemployment benefits anyway.
  • this bid to restore conditions of rapid economic growth, much like supply-side and trickle-down solutions that failed to produce generalised prosperity, was a failure. The Covid crisis has only made economic prospects less auspicious.
  • People need security that is not tied to their job. The pandemic has revealed this imperative more than ever before. In a world that is as wealthy as ours, and given the technologies we have already produced – even without the realisation of the dreams of automation – everyone should have access to food, energy, housing and healthcare
  • The owners of Uber and Lyft know that their business is predicated on a world in which they get to make the key decisions that shape our futures, without our input. The world of work is going to have to be democratised. They are just delaying what should be inevitable.
Javier E

Peter Thiel Is Taking a Break From Democracy - The Atlantic - 0 views

www.theatlantic.com/...675946

democracy tech billionaire anti-democratic stagnation immortal culture

shared by Javier E on 09 Nov 23 - No Cached
  • Thiel’s unique role in the American political ecosystem. He is the techiest of tech evangelists, the purest distillation of Silicon Valley’s reigning ethos. As such, he has become the embodiment of a strain of thinking that is pronounced—and growing—among tech founders.
  • why does he want to cut off politicians
  • But the days when great men could achieve great things in government are gone, Thiel believes. He disdains what the federal apparatus has become: rule-bound, stifling of innovation, a “senile, central-left regime.”
  • ...95 more annotations...
  • Peter Thiel has lost interest in democracy.
  • Thiel has cultivated an image as a man of ideas, an intellectual who studied philosophy with René Girard and owns first editions of Leo Strauss in English and German. Trump quite obviously did not share these interests, or Thiel’s libertarian principles.
  • For years, Thiel had been saying that he generally favored the more pessimistic candidate in any presidential race because “if you’re too optimistic, it just shows you’re out of touch.” He scorned the rote optimism of politicians who, echoing Ronald Reagan, portrayed America as a shining city on a hill. Trump’s America, by contrast, was a broken landscape, under siege.
  • Thiel is not against government in principle, his friend Auren Hoffman (who is no relation to Reid) says. “The ’30s, ’40s, and ’50s—which had massive, crazy amounts of power—he admires because it was effective. We built the Hoover Dam. We did the Manhattan Project,” Hoffman told me. “We started the space program.”
  • Their failure to make the world conform to his vision has soured him on the entire enterprise—to the point where he no longer thinks it matters very much who wins the next election.
  • His libertarian critique of American government has curdled into an almost nihilistic impulse to demolish it.
  • “Voting for Trump was like a not very articulate scream for help,” Thiel told me. He fantasized that Trump’s election would somehow force a national reckoning. He believed somebody needed to tear things down—slash regulations, crush the administrative state—before the country could rebuild.
  • He admits now that it was a bad bet.
  • “There are a lot of things I got wrong,” he said. “It was crazier than I thought. It was more dangerous than I thought. They couldn’t get the most basic pieces of the government to work. So that was—I think that part was maybe worse than even my low expectations.”
  • eid Hoffman, who has known Thiel since college, long ago noticed a pattern in his old friend’s way of thinking. Time after time, Thiel would espouse grandiose, utopian hopes that failed to materialize, leaving him “kind of furious or angry” about the world’s unwillingness to bend to whatever vision was possessing him at the moment
  • Thiel. He is worth between $4 billion and $9 billion. He lives with his husband and two children in a glass palace in Bel Air that has nine bedrooms and a 90-foot infinity pool. He is a titan of Silicon Valley and a conservative kingmaker.
  • “Peter tends to be not ‘glass is half empty’ but ‘glass is fully empty,’” Hoffman told me.
  • he tells the story of his life as a series of disheartening setbacks.
  • He met Mark Zuckerberg, liked what he heard, and became Facebook’s first outside investor. Half a million dollars bought him 10 percent of the company, most of which he cashed out for about $1 billion in 2012.
  • Thiel made some poor investments, losing enormous sums by going long on the stock market in 2008, when it nose-dived, and then shorting the market in 2009, when it rallied
  • on the whole, he has done exceptionally well. Alex Karp, his Palantir co-founder, who agrees with Thiel on very little other than business, calls him “the world’s best venture investor.”
  • Thiel told me this is indeed his ambition, and he hinted that he may have achieved it.
  • He longs for radical new technologies and scientific advances on a scale most of us can hardly imagine
  • He longs for a world in which great men are free to work their will on society, unconstrained by government or regulation or “redistributionist economics” that would impinge on their wealth and power—or any obligation, really, to the rest of humanity
  • Did his dream of eternal life trace to The Lord of the Rings?
  • He takes for granted that this kind of progress will redound to the benefit of society at large.
  • More than anything, he longs to live forever.
  • Calling death a law of nature is, in his view, just an excuse for giving up. “It’s something we are told that demotivates us from trying harder,”
  • Thiel grew up reading a great deal of science fiction and fantasy—Heinlein, Asimov, Clarke. But especially Tolkien; he has said that he read the Lord of the Rings trilogy at least 10 times. Tolkien’s influence on his worldview is obvious: Middle-earth is an arena of struggle for ultimate power, largely without government, where extraordinary individuals rise to fulfill their destinies. Also, there are immortal elves who live apart from men in a magical sheltered valley.
  • But his dreams have always been much, much bigger than that.
  • Yes, Thiel said, perking up. “There are all these ways where trying to live unnaturally long goes haywire” in Tolkien’s works. But you also have the elves.
  • How are the elves different from the humans in Tolkien? And they’re basically—I think the main difference is just, they’re humans that don’t die.”
  • During college, he co-founded The Stanford Review, gleefully throwing bombs at identity politics and the university’s diversity-minded reform of the curriculum. He co-wrote The Diversity Myth in 1995, a treatise against what he recently called the “craziness and silliness and stupidity and wickedness” of the left.
  • Thiel laid out a plan, for himself and others, “to find an escape from politics in all its forms.” He wanted to create new spaces for personal freedom that governments could not reach
  • But something changed for Thiel in 2009
  • he people, he concluded, could not be trusted with important decisions. “I no longer believe that freedom and democracy are compatible,” he wrote.
  • ven more notable one followed: “Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women—two constituencies that are notoriously tough for libertarians—have rendered the notion of ‘capitalist democracy’ into an oxymoron.”
  • By 2015, six years after declaring his intent to change the world from the private sector, Thiel began having second thoughts. He cut off funding for the Seasteading Institute—years of talk had yielded no practical progress–and turned to other forms of escape
  • The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom,” he wrote. His manifesto has since become legendary in Silicon Valley, where his worldview is shared by other powerful men (and men hoping to be Peter Thiel).
  • Thiel’s investment in cryptocurrencies, like his founding vision at PayPal, aimed to foster a new kind of money “free from all government control and dilution
  • His decision to rescue Elon Musk’s struggling SpaceX in 2008—with a $20 million infusion that kept the company alive after three botched rocket launches—came with aspirations to promote space as an open frontier with “limitless possibility for escape from world politics
  • It was seasteading that became Thiel’s great philanthropic cause in the late aughts and early 2010s. The idea was to create autonomous microstates on platforms in international waters.
  • “There’s zero chance Peter Thiel would live on Sealand,” he said, noting that Thiel likes his comforts too much. (Thiel has mansions around the world and a private jet. Seal performed at his 2017 wedding, at the Belvedere Museum in Vienna.)
  • As he built his companies and grew rich, he began pouring money into political causes and candidates—libertarian groups such as the Endorse Liberty super PAC, in addition to a wide range of conservative Republicans, including Senators Orrin Hatch and Ted Cruz
  • Sam Altman, the former venture capitalist and now CEO of OpenAI, revealed in 2016 that in the event of global catastrophe, he and Thiel planned to wait it out in Thiel’s New Zealand hideaway.
  • When I asked Thiel about that scenario, he seemed embarrassed and deflected the question. He did not remember the arrangement as Altman did, he said. “Even framing it that way, though, makes it sound so ridiculous,” he told me. “If there is a real end of the world, there is no place to go.”
  • You’d have eco farming. You’d turn the deserts into arable land. There were sort of all these incredible things that people thought would happen in the ’50s and ’60s and they would sort of transform the world.”
  • None of that came to pass. Even science fiction turned hopeless—nowadays, you get nothing but dystopias
  • He hungered for advances in the world of atoms, not the world of bits.
  • Founders Fund, the venture-capital firm he established in 200
  • The fund, therefore, would invest in smart people solving hard problems “that really have the potential to change the world.”
  • This was not what Thiel wanted to be doing with his time. Bodegas and dog food were making him money, apparently, but he had set out to invest in transformational technology that would advance the state of human civilization.
  • He told me that he no longer dwells on democracy’s flaws, because he believes we Americans don’t have one. “We are not a democracy; we’re a republic,” he said. “We’re not even a republic; we’re a constitutional republic.”
  • “It was harder than it looked,” Thiel said. “I’m not actually involved in enough companies that are growing a lot, that are taking our civilization to the next level.”
  • Founders Fund has holdings in artificial intelligence, biotech, space exploration, and other cutting-edge fields. What bothers Thiel is that his companies are not taking enough big swings at big problems, or that they are striking out.
  • In at least 20 hours of logged face-to-face meetings with Buma, Thiel reported on what he believed to be a Chinese effort to take over a large venture-capital firm, discussed Russian involvement in Silicon Valley, and suggested that Jeffrey Epstein—a man he had met several times—was an Israeli intelligence operative. (Thiel told me he thinks Epstein “was probably entangled with Israeli military intelligence” but was more involved with “the U.S. deep state.”)
  • Buma, according to a source who has seen his reports, once asked Thiel why some of the extremely rich seemed so open to contacts with foreign governments. “And he said that they’re bored,” this source said. “‘They’re bored.’ And I actually believe it. I think it’s that simple. I think they’re just bored billionaires.”
  • he has a sculpture that resembles a three-dimensional game board. Ascent: Above the Nation State Board Game Display Prototype is the New Zealander artist Simon Denny’s attempt to map Thiel’s ideological universe. The board features a landscape in the aesthetic of Dungeons & Dragons, thick with monsters and knights and castles. The monsters include an ogre labeled “Monetary Policy.” Near the center is a hero figure, recognizable as Thiel. He tilts against a lion and a dragon, holding a shield and longbow. The lion is labeled “Fair Elections.” The dragon is labeled “Democracy.” The Thiel figure is trying to kill them.
  • When I asked Thiel to explain his views on democracy, he dodged the question. “I always wonder whether people like you … use the word democracy when you like the results people have and use the word populism when you don’t like the results,” he told me. “If I’m characterized as more pro-populist than the elitist Atlantic is, then, in that sense, I’m more pro-democratic.”
  • “I couldn’t find them,” he said. “I couldn’t get enough of them to work.
  • He said he has no wish to change the American form of government, and then amended himself: “Or, you know, I don’t think it’s realistic for it to be radically changed.” Which is not at all the same thing.
  • When I asked what he thinks of Yarvin’s autocratic agenda, Thiel offered objections that sounded not so much principled as practical.
  • “I don’t think it’s going to work. I think it will look like Xi in China or Putin in Russia,” Thiel said, meaning a malign dictatorship. “It ultimately I don’t think will even be accelerationist on the science and technology side, to say nothing of what it will do for individual rights, civil liberties, things of that sort.”
  • Still, Thiel considers Yarvin an “interesting and powerful” historian
  • he always talks about is the New Deal and FDR in the 1930s and 1940s,” Thiel said. “And the heterodox take is that it was sort of a light form of fascism in the United States.”
  • Yarvin, Thiel said, argues that “you should embrace this sort of light form of fascism, and we should have a president who’s like FDR again.”
  • Did Thiel agree with Yarvin’s vision of fascism as a desirable governing model? Again, he dodged the question.
  • “That’s not a realistic political program,” he said, refusing to be drawn any further.
  • ooking back on Trump’s years in office, Thiel walked a careful line.
  • A number of things were said and done that Thiel did not approve of. Mistakes were made. But Thiel was not going to refashion himself a Never Trumper in retrospect.
  • “I have to somehow give the exact right answer, where it’s like, ‘Yeah, I’m somewhat disenchanted,’” he told me. “But throwing him totally under the bus? That’s like, you know—I’ll get yelled at by Mr. Trump. And if I don’t throw him under the bus, that’s—but—somehow, I have to get the tone exactly right.”
  • Thiel knew, because he had read some of my previous work, that I think Trump’s gravest offense against the republic was his attempt to overthrow the election. I asked how he thought about it.
  • “Look, I don’t think the election was stolen,” he said. But then he tried to turn the discussion to past elections that might have been wrongly decided. Bush-Gore in 2000, for instanc
  • He came back to Trump’s attempt to prevent the transfer of power. “I’ll agree with you that it was not helpful,” he said.
  • there is another piece of the story, which Thiel reluctantly agreed to discuss
  • Puck reported that Democratic operatives had been digging for dirt on Thiel since before the 2022 midterm elections, conducting opposition research into his personal life with the express purpose of driving him out of politic
  • Among other things, the operatives are said to have interviewed a young model named Jeff Thomas, who told them he was having an affair with Thiel, and encouraged Thomas to talk to Ryan Grim, a reporter for The Intercept. Grim did not publish a story during election season, as the opposition researchers hoped he would, but he wrote about Thiel’s affair in March, after Thomas died by suicide.
  • He deplored the dirt-digging operation, telling me in an email that “the nihilism afflicting American politics is even deeper than I knew.”
  • He also seemed bewildered by the passions he arouses on the left. “I don’t think they should hate me this much,”
  • he spoke at the closed-press event with a lot less nuance than he had in our interviews. His after-dinner remarks were full of easy applause lines and in-jokes mocking the left. Universities had become intellectual wastelands, obsessed with a meaningless quest for diversity, he told the crowd. The humanities writ large are “transparently ridiculous,” said the onetime philosophy major, and “there’s no real science going on” in the sciences, which have devolved into “the enforcement of very curious dogmas.”
  • “Diversity—it’s not enough to just hire the extras from the space-cantina scene in Star Wars,” he said, prompting laughter.
  • Nor did Thiel say what genuine diversity would mean. The quest for it, he said, is “very evil and it’s very silly.”
  • “the silliness is distracting us from very important things,” such as the threat to U.S. interests posed by the Chinese Communist Party.
  • “Whenever someone says ‘DEI,’” he exhorted the crowd, “just think ‘CCP.’”
  • Somebody asked, in the Q&A portion of the evening, whether Thiel thought the woke left was deliberately advancing Chinese Communist interests
  • “It’s always the difference between an agent and asset,” he said. “And an agent is someone who is working for the enemy in full mens rea. An asset is a useful idiot. So even if you ask the question ‘Is Bill Gates China’s top agent, or top asset, in the U.S.?’”—here the crowd started roaring—“does it really make a difference?”
  • About 10 years ago, Thiel told me, a fellow venture capitalist called to broach the question. Vinod Khosla, a co-founder of Sun Microsystems, had made the Giving Pledge a couple of years before. Would Thiel be willing to talk with Gates about doing the same?
  • Thiel feels that giving his billions away would be too much like admitting he had done something wrong to acquire them
  • He also lacked sympathy for the impulse to spread resources from the privileged to those in need. When I mentioned the terrible poverty and inequality around the world, he said, “I think there are enough people working on that.”
  • besides, a different cause moves him far more.
  • Should Thiel happen to die one day, best efforts notwithstanding, his arrangements with Alcor provide that a cryonics team will be standing by.
  • Then his body will be cooled to –196 degrees Celsius, the temperature of liquid nitrogen. After slipping into a double-walled, vacuum-insulated metal coffin, alongside (so far) 222 other corpsicles, “the patient is now protected from deterioration for theoretically thousands of years,” Alcor literature explains.
  • All that will be left for Thiel to do, entombed in this vault, is await the emergence of some future society that has the wherewithal and inclination to revive him. And then make his way in a world in which his skills and education and fabulous wealth may be worth nothing at all.
  • I wondered how much Thiel had thought through the implications for society of extreme longevity. The population would grow exponentially. Resources would not. Where would everyone live? What would they do for work? What would they eat and drink? Or—let’s face it—would a thousand-year life span be limited to men and women of extreme wealth?
  • “Well, I maybe self-serve,” he said, perhaps understating the point, “but I worry more about stagnation than about inequality.”
  • Thiel is not alone among his Silicon Valley peers in his obsession with immortality. Oracle’s Larry Ellison has described mortality as “incomprehensible.” Google’s Sergey Brin aspires to “cure death.” Dmitry Itskov, a leading tech entrepreneur in Russia, has said he hopes to live to 10,000.
  • . “I should be investing way more money into this stuff,” he told me. “I should be spending way more time on this.”
  • You haven’t told your husband? Wouldn’t you want him to sign up alongside you?“I mean, I will think about that,” he said, sounding rattled. “I will think—I have not thought about that.”
  • No matter how fervent his desire, Thiel’s extraordinary resources still can’t buy him the kind of “super-duper medical treatments” that would let him slip the grasp of death. It is, perhaps, his ultimate disappointment.
  • There are all these things I can’t do with my money,” Thiel said.
Javier E

Opinion | China's Economy Is in Serious Trouble - The New York Times - 0 views

www.nytimes.com/...china-economy-xi.html

china economy stagnation economic strategy

shared by Javier E on 19 Jan 24 - No Cached
  • Some analysts expected the Chinese economy to boom after it lifted the draconian “zero Covid” measures it had adopted to contain the pandemic. Instead, China has underperformed by just about every economic indicator other than official G.D.P., which supposedly grew by 5.2 percent.
  • the Chinese economy seems to be stumbling. Even the official statistics say that China is experiencing Japan-style deflation and high youth unemployment. It’s not a full-blown crisis, at least not yet, but there’s reason to believe that China is entering an era of stagnation and disappointment.
  • Why is China’s economy, which only a few years ago seemed headed for world domination, in trouble?
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  • With consumers buying so little, at least relative to the Chinese economy’s productive capacity, how can the nation generate enough demand to keep that capacity in use? The main answer, as Michael Pettis points out, has been to promote extremely high rates of investment, more than 40 percent of G.D.P. The trouble is that it’s hard to invest that much money without running into severely diminishing returns.
  • financial repression — paying low interest on savings and making cheap loans to favored borrowers — that holds down household income and diverts it to government-controlled investment, a weak social safety net that causes families to accumulate savings to deal with possible emergencies, and more.
  • Part of the answer is bad leadership. President Xi Jinping is starting to look like a poor economic manager, whose propensity for arbitrary interventions — which is something autocrats tend to do — has stifled private initiative.
  • But China’s working-age population peaked around 2010 and has been declining ever since. While China has shown impressive technological capacity in some areas, its overall productivity also appears to be stagnating.
  • very high rates of investment may be sustainable if, like China in the early 2000s, you have a rapidly growing work force and high productivity growth as you catch up with Western economies
  • This, in short, isn’t a nation that can productively invest 40 percent of G.D.P. Something has to give.
  • the government was able to mask the problem of inadequate consumer spending for a number of years by promoting a gigantic real estate bubble. In fact, China’s real estate sector became insanely large by international standards.
  • what China must do seems straightforward: end financial repression and allow more of the economy’s income to flow through to households, and strengthen the social safety net so that consumers don’t feel the need to hoard cash. And as it does this it can ramp down its unsustainable investment spending.
  • But there are powerful players, especially state-owned enterprises, that benefit from financial repression
  • And when it comes to strengthening the safety net, the leader of this supposedly communist regime sounds a bit like the governor of Mississippi, denouncing “welfarism” that creates “lazy people.”
  • Japan ended up managing its downshifting well. It avoided mass unemployment, it never lost social and political cohesion, and real G.D.P. per working-age adult actually rose 50 percent over the next three decades, not far short of growth in the United States.
  • My great concern is that China may not respond nearly as well. How cohesive will China be in the face of economic trouble? Will it try to prop up its economy with an export surge that will run headlong into Western efforts to promote green technologies? Scariest of all, will it try to distract from domestic difficulties by engaging in military adventurism?
Javier E

Nobel laureates have figured out the eight investments that will help the pla... - 0 views

www.slate.com/2281097

development laureates investment priorities economic philanthropy

shared by Javier E on 16 Jan 11 - No Cached
  • In 2008, the Copenhagen Consensus Center, which I direct, asked a group of the world's top economists to identify the "investments" that could best help the planet.
  • the best investments: those for which relatively tiny amounts of money could generate significant returns in terms of health, prosperity, and community advantages. These included: increased immunization coverage, initiatives to reduce school dropout rates, community-based nutrition promotion, and micronutrient
  • supplementation.
  • ...2 more annotations...
  • the Copenhagen Consensus Center releases the Guide to Giving, so that those of us without a government treasury or charitable foundation at our disposal can also consider how to use the experts' lessons. (Read here about the eight initiatives where the Nobel laureates believe that very small investments could achieve significant benefits.)
  • By putting all benefits to individuals, communities, and countries in monetary terms, we can compare the two options. Expert researchers for the Copenhagen Consensus found that carbon offsets are a relatively ineffective way of reining in global warming and reducing its effects—$10 would avoid about $3 of damage from climate change. By contrast, $10 spent on Vitamin A supplements would achieve more than $170 of benefits in health and long-term prosperity.
Javier E

The Tiny Swiss Company That Thinks It Can Help Stop Climate Change - The New York Times - 0 views

www.nytimes.com/...s-business-climate-change.html

climate change tech

shared by Javier E on 13 Feb 19 - No Cached
  • The scientist and historian Vaclav Smil called Haber-Bosch “the most important technical invention of the 20th century.” Bosch had effectively removed the historical bounds on crop yields, so much so that he was widely credited with making “bread from air.” By some estimates, Bosch’s work made possible the lives of more than two billion human beings over the last 100 years.
  • They depend on electric fans to pull air into the ducts and over a special material, known as a sorbent, laced with granules that chemically bind with CO₂; periodic blasts of heat then release the captured gas from the sorbent, with customized software managing the whole catch-and-release cycle.
  • “The first thing they said was: ‘This will never work technically.’ And finally in 2017 we convinced them it works technically, since we built the big plant in Hinwil. But once we convinced them that it works technically, they would say, ‘Well, it will never work economically.’ ”For the moment, skeptics of Climeworks’s business plan are correct: The company is not turning a profit.
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  • it faces the same daunting task that confronted Carl Bosch a century ago: How much can it bring costs down? And how fast can it scale up
  • They believe that over the next seven years they can bring expenses down to a level that would enable them to sell CO₂ into more lucrative markets. Air-captured CO₂ can be combined with hydrogen and then fashioned into any kind of fossil-fuel substitute you want. Instead of making bread from air, you can make fuels from air.
  • What Gebald and Wurzbacher really want to do is to pull vast amounts of CO₂ out of the atmosphere and bury it, forever, deep underground, and sell that service as an offset
  • companies like Climeworks face a quandary: How do you sell something that never existed before, something that may never be cheap, into a market that is not yet real?
  • It’s arguably the case, in fact, that when it comes to reducing our carbon emissions, direct air capture will be seen as an option that’s too expensive and too modest in impact. “The only way that direct air capture becomes meaningful is if we do all the other things we need to do promptly,” Hal Harvey, a California energy analyst who studies climate-friendly technologies and policies, told me
  • In short, the best way to start making progress toward a decarbonized world is not to rev up millions of air capture machines right now. It’s to stop putting CO₂ in the atmosphere in the first place.
  • If the nations of the world were to continue on the current track, it would be impossible to meet the objectives of the 2016 Paris Agreement, which set a goal limiting warming to 2 degrees Celsius or, ideally, 1.5 degrees. And it would usher in a world of misery and economic hardship. Already, temperatures in some regions have climbed more than 1 degree Celsius, as a report by the Intergovernmental Panel on Climate Change noted last October. These temperature increases have led to an increase in droughts, heat waves, floods and biodiversity losses and make the chaos of 2 or 3 degrees’ additional warming seem inconceivable
  • A further problem is that maintaining today’s emissions path for too long runs the risk of doing irreparable damage to the earth’s ecosystems — causing harm that no amount of technological innovation can make right. “There is no reverse gear for natural systems,” Harvey says. “If they go, they go. If we defrost the tundra, it’s game over.” The same might be said for the Greenland and West Antarctic ice sheets, or our coral reefs. Such resources have an asymmetry in their natural architectures: They can take thousands or millions of years to form, but could reach conditions of catastrophic decline in just a few decades.
  • To have a shot at maintaining a climate suitable for humans, the world’s nations most likely have to reduce CO₂ emissions drastically from the current level — to perhaps 15 billion or 20 billion metric tons per year by 2030; then, through some kind of unprecedented political and industrial effort, we need to bring carbon emissions to zero by around 2050
  • To preserve a livable environment we may also need to extract CO₂ from the atmosphere. As Wurzbacher put it, “if you take all these numbers from the I.P.C.C., you end up with something like eight to 10 billion tons — gigatons — of CO₂ that need to be removed from the air every year, if we are serious about 1.5 or 2 degrees.
  • Through photosynthesis, our forests take extraordinary amounts of carbon dioxide from the atmosphere, and if we were to magnify efforts to reforest clear-cut areas — or plant new groves, a process known as afforestation — we could absorb billions more metric tons of carbon in future years.
  • we could grow crops specifically to absorb CO₂ and then burn them for power generation, with the intention of capturing the power-plant emissions and pumping them underground, a process known as bioenergy with carbon capture and storage, or BECCS
  • Ever since the Industrial Revolution, human societies have produced an excess of CO₂, by taking carbon stores from deep inside the earth — in the form of coal, oil and gas — and from stores aboveground (mostly wood), then putting it into the atmosphere by burning it. It has become imperative to reverse the process — that is, take CO₂ out of the air and either restore it deep inside the earth or contain it within new surface ecosystems.
  • “It’s not about saying, ‘I want to plant a tree.’ It’s about saying, ‘We want to plant a billion trees.’
  • “We have to come to grips with the fact that we waited too long and that we took some options off the table,” Michael Oppenheimer, a Princeton scientist who studies climate and policy, told me. As a result, NETs no longer seem to be just interesting ideas; they look like necessities. And as it happens, the Climeworks machines on the rooftop do the work each year of about 36,000 trees.
  • air capture could likewise help counter the impact of several vital industries. “There are process emissions that come from producing iron and steel, cement and glass,” she says, “and any time you make these materials, there’s a chemical reaction that emits CO₂.” Direct air capture could even lessen the impacts of the Haber-Bosch processes for making fertilizer; by some estimates, that industry now accounts for 3 percent of all CO₂ emissions.
  • Wind and solar are now the cheapest forms of energy in the right locations,” Pacala says. “The return on those investments, if you calculated it, would blow the doors off anything in your portfolio. It’s like investing in early Apple. So it’s a spectacular story of success. And direct air capture is precisely the same kind of problem, in which the only barrier is that it’s too costly.”
  • what all the founders have in common is a belief that the cost of capturing a ton of carbon will soon drop sharply.
  • M.I.T.’s Howard Herzog, for instance, an engineer who has spent years looking at the potential for these machines, told me that he thinks the costs will remain between $600 and $1,000 per metric ton
  • He points out that because direct-air-capture machines have to move tremendous amounts of air through a filter or solution to glean a ton of CO₂ — the gas, for all its global impact, makes up only about 0.04 percent of our atmosphere — the process necessitates large expenditures for energy and big equipment. What he has likewise observed, in analyzing similar industries that separate gases, suggests that translating spreadsheet projections for capturing CO₂ into real-world applications will reveal hidden costs. “I think there has been a lot of hype about this, and it’s not going to revolutionize anything,
  • Climeworks’s current goal is to remove 1 percent of the world’s annual CO₂ emissions by the mid 2020s.
  • “Basically, we have a road map — $600, down to $400, down to $300 and $200 a ton,” Wurzbacher said. “This is over the next five years. Down to $200 we know quite well what we’re doing.” And beyond $200, Wurzbacher suggested, things get murkier.
  • To actually capture 1 percent of the world’s carbon emissions by 2025 would, by Gebald’s calculations, require that Climeworks build 250,000 carbon-capture plants like the ones on the roof at Hinwil. That adds up to about 4.5 million carbon collectors
  • The Climeworks founders therefore try to think of their product as the automotive industry might — a piece of mass-produced technology and metal, not the carbon they hope to sequester.
  • “Every CO₂ collector has about the same weight and dimensions of a car — roughly two tons, and roughly 2 meters by 2 meters by 2 meters,” Gebald said. “And all the methods used to produce the CO₂ collectors could be well automated. So we have the automotive industry as a model for how to produce things in large quantities for low cost.
  • n 1954, the economist Paul Samuelson put forward a theory that made a distinction between “private-consumption goods” — bread, cars, houses and the like — and commodities that existed apart from the usual laws of supply and demand.
  • the other type of commodity Samuelson was describing is something now known as a “public good,” which benefits everyone but is not bought, sold or consumed the same way
  • direct air capture’s success would be limited to the size of the market for private goods — soda fizz, greenhouse gas — unless governments decided to intervene and help fund the equivalent of several million (or more) lighthouses.
  • An intervention could take a variety of forms. It could be large grants for research to find better sorbent materials, for instance, which would be similar to government investments that long ago helped nurture the solar- and wind-power industries. But help could also come by expanding regulations that already exist.
  • The Climeworks founders told me they don’t believe their company will succeed on what they call “climate impact” scales unless the world puts significant prices on emissions, in the form of a carbon tax or carbon fee.
  • “Our goal is to make it possible to capture CO₂ from the air for below $100 per ton,” Wurzbacher says. “No one owns a crystal ball, but we think — and we’re quite confident — that by something like 2030 we’ll have a global average price on carbon in the range of $100 to $150 a ton.” There is optimism in this thinking
  • A company that sells a product or uses a process that creates high emissions — an airline, for instance, or a steel maker — could be required to pay carbon-removal companies $100 per metric ton or more to offset their CO₂ output. Or a government might use carbon-tax proceeds to directly pay businesses to collect and bury CO₂.
  • “It doesn’t cost too much to pump CO₂ underground,” Stanford’s Sally Benson says. Companies already sequester about 34 million metric tons of CO₂ in the ground every year, at a number of sites around the world, usually to enhance the oil-drilling process. “The costs range from $2 to $15 per ton. So the bigger cost in all of this is the cost of carbon capture.”
  • The weekend before, Gutknecht told me, he received 900 unsolicited inquiries by email. Many were from potential customers who wanted to know how soon Climeworks could bury their CO₂ emissions, or how much a machine might cost them.
  • A Climeworks app could be installed on my smartphone, he explained. It could then be activated by my handset’s location services. “You fly over here to Europe,” he explained, “and the app tells you that you have just burned 1.7 tons of CO₂. Do you want to remove that? Well, Climeworks can remove it for you. Click here. We’ll charge your credit card.
  • The vast and constant market demand for fuel is why Carbon Engineering has staked its future on synthetics. The world currently burns about 100 million barrels of oil a day.
  • “So let’s say you’d have to supply something like 50 million barrels a day in 2050 of fuels,” he said. “That’s still a monster market.”
  • Carbon Engineering’s chief executive, added that direct-air-capture synthetics have an advantage over traditional fossil fuels: They won’t have to spend a dime on exploration
  • our plants, you can build it right in the middle of California, wherever you have air and water.” He told me that the company’s first large-scale facility should be up and running by 2022, and will turn out at least 500 barrels a day of fuel feedstock — the raw material sent to refineries.
  • Climeworks recently joined a consortium of European countries to produce synthetic methane that will be used by a local trucking fleet. With different tweaks and refinements, the process could be adapted for diesel, gasoline, jet fuel — or it could be piped directly to local neighborhoods as fuel for home furnaces.
  • the new fuels are not necessarily cheaper. Carbon Engineering aspires to deliver its product at an ultimate retail price of about $1 per liter, or $3.75 per gallon. What would make the product competitive are regulations in California that now require fuel sellers to produce fuels of lower “carbon intensity.” To date this has meant blending gas and diesel with biofuels like ethanol, but it could soon mean carbon-capture synthetics too.
  • Since they’re made from airborne CO₂ and hydrogen and could be manufactured just about anywhere, they could rearrange the geopolitical order — tempering the power of a handful of countries that now control natural-gas and oil markets.
  • From an environmental standpoint, air-capture fuels are not a utopian solution. Such fuels are carbon neutral, not carbon negative. They can’t take CO₂ from our industrial past and put it back into the earth
  • Even so, these fuels could present an enormous improvement. Transportation — currently the most significant source of emissions by sector in the United States — could cease to be a net emitter of CO₂
  • “If you can do one carbon-capture facility, where Carbon Engineering or Climeworks can build a big plant, great. You need to do that 5,000 times. And to capture a million tons of CO₂ with direct air capture, you need a small power plant just to run that facility. So if you’re going to build one direct-air-capture facility every day for the next 30 years to get to some of these scenarios, then in addition, we have to build a new mini power plant every day as well.
  • It’s also the case that you have to address two extraordinary problems at the same time, Peters added. “To reach 1.5 degrees, we need to halve emissions every decade,” he said. That would mean persuading entire nations, like China and the United States, to switch from burning coal to using renewables at precisely the same time that we make immense investments in negative-emission technologies.
  • this would need to be done even as governments choose among competing priorities:
  • “The idea of bringing direct air capture up to 10 billion tons by the middle or later part of the century is such a herculean task it would require an industrial scale-up the likes of which the world has never seen,”
  • Pacala wasn’t pessimistic about making a start. He seemed to think it was necessary for the federal government to begin with significant research and investments in the technology — to see how far and fast it could move forward, so that it’s ready as soon as possible
  • Gebald and Wurzbacher seemed to regard the climate challenge in mathematical terms. How many gigatons needed to be removed? How much would it cost per ton? How many Climeworks machines were required? Even if the figures were enormous, even if they appeared impossible, to see the future their way was to redefine the problem, to move away from the narrative of loss, to forget the multiplying stories of dying reefs and threatened coastlines — and to begin to imagine other possibilities.
Javier E

It May Be the Biggest Tax Heist Ever. And Europe Wants Justice. - The New York Times - 0 views

www.nytimes.com/...cum-ex.html

tax fraud europe banker financial rich

shared by Javier E on 24 Jan 20 - No Cached
  • “the robbery of the century,” and what one academic declared “the biggest tax theft in the history of Europe.” From 2006 to 2011, these two and hundreds of bankers, lawyers and investors made off with a staggering $60 billion, all of it siphoned from the state coffers of European countries.
  • The scheme was built around “cum-ex trading” (from the Latin for “with-without”): a monetary maneuver to avoid double taxation of investment profits that plays out like high finance’s answer to a David Copperfield stage illusion. Through careful timing, and the coordination of a dozen different transactions, cum-ex trades produced two refunds for dividend tax paid on one basket of stocks.
  • One basket of stocks. Abracadabra. Two refunds
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  • The process was repeated over and over, as word of cum-ex spread like a quiet contagion. Germany was hardest hit, with an estimated $30 billion in losses, followed by France, taken for about $17 billion. Smaller sums were drained away from Spain, Italy, Belgium, Austria, Norway, Finland, Poland and others
  • Outrage in these countries has focused on the City of London, Britain’s answer to Wall Street. Less scrutinized has been the role played by Americans, both individual investors and branches of United States investment banks in London, including Morgan Stanley, JPMorgan Chase and Merrill Lynch Bank of America.
  • American bankers didn’t try cum-ex at home because they feared domestic regulators. So they moved operations to London and treated the rest of Europe as an anything-goes frontier
  • ”There was this culture in London, and it really came from New York,” he said. “These guys were either from New York or trained in London at New York banks, and they looked at Europe as their playground. People at the highest levels were collaborating to rip off countries.”
  • uffice it to say, the goal was to fool the financial system so that two investors could claim refunds for dividend taxes that were paid just once.
  • the presiding judge issued a preliminary ruling that, for the first time, declared cum-ex a felony, calling it a “collective grab in the treasury.”
  • German prosecutors say they will now pursue 400 other suspects, unearthed in 56 investigations. Banks large and small will be ordered to hand over cum-ex profits, which could have serious consequences for some. Two have already gone bust.
  • officials in Germany say the trade was a form of theft, one so obviously illicit that forbidding it — which was tried twice, with ineffectively worded laws — was hardly necessary.
  • Precisely who invented cum-ex trading, and when, are mysteries, but ground zero for this scandal may have been the London branch of Merrill Lynch.
  • At Merrill, Mr. Shields’s job was to identify “tax-attractive trades,” as he put it in his testimony. He had joined one of the least visible sectors of the financial world, which pokes at the seams of international finance law, looking for ways to reduce clients’ tax bills.
  • When he pointed this out to management, the policy was tweaked.“They said, ‘You can answer a call on your mobile, but you need to immediately move off the floor,’” he recalled. “So these guys would get up from their desks, start walking toward the edge of the floor, send a text message and then walk back. It was a joke.”
  • The trade was pure theater and required a huge cast: stock lenders, prime brokers, custodians, accounting firms, asset managers and inter-dealer brokers. It also required vast quantities of stock, most of which was sourced from American shareholders.
  • A lawyer who worked at the firm Dr. Berger founded in 2010, and who under German law can’t be identified by the media, described for the Bonn court a memorable meeting at the office.
  • Sensitive types, Dr. Berger told his underlings that day, should find other jobs.“Whoever has a problem with the fact that because of our work there are fewer kindergartens being built,” Dr. Berger reportedly said, “here’s the door.”
  • Seemingly risk-free profits poured in, and over the years a mini-industry thrived, one that a former participant labeled “the devil’s machine.”
  • When Mr. Tibo tried to signal his concern to executives at UniCredit, the bank’s Italian owner, they didn’t seem to care, he said
  • “There were big profits coming out of HypoVereinsbank, and most of it was from the investment banking section,” Mr. Tibo said. “The Italians quickly made up their minds: ‘We want to make money.’ No one gave us any internal support, because they didn’t want us to learn anything.”
  • By then, Mr. Mora and Mr. Shields were long gone from the London branch. Tired of niggling questions and feeling underpaid, they had left in 2008 to open Ballance Capital, one of the first full-service, one-stop cum-ex trading shops.
  • Dozens of German banks participated in cum-ex deals, too, gobbling up German taxpayer money at the same time they received a rescue package worth more than $500 billion.
  • Last year, the lawyer who testified anonymously at the Bonn trial described the culture of the cum-ex world to Oliver Schröm and Christian Salewski, two reporters on the German television show “Panorama,” under disguising makeup. It was a realm beyond morality, he said: all male, supremely arrogant, and guided by the conviction that the German state is an enemy and German taxpayers are suckers.
  • “That was the normal world to which we no longer belonged,” he told the reporters. “We looked out the window from up there, and we thought, ‘We’re the cleverest of all, geniuses, and you’re all stupid.’”
  • a former Merrill Lynch investment banker sat in a London restaurant near the Thames and described what had turned him into a whistle-blower. In the years after the financial crisis, he said, he noticed that a handful of colleagues on the company’s trading floor were using their personal mobile phones, a breach of company policy. All communication was supposed to be tracked and recorded. These guys were sending self-deleting texts on Snapchat.“Obviously, they were circumventing controls,”
  • Worried about the growing pileup of tax-withholding credits on the books, Frank Tibo, the bank’s chief tax officer, flew to London in May 2007. He spent the day grilling Mr. Mora
  • The complaint lays out, in painstaking detail, how the trades were confected, who executed them and which questions should be asked by investigators to uncover the “sham.” It states that Merrill Lynch earned hundreds of millions of dollars over the previous seven years from cum-ex trades.
  • “Anyone who stood in the way of this trade was swept aside, and those who enabled it were promoted,” the whistle-blower said in a follow-up phone call. “But it was widely regarded as insanity inside the bank for it to be extracting money from sovereign treasuries, particularly after the entire sector had been supported by the public purse.
  • American banks conducted their cum-ex trades overseas, rather than at home, out of fear, the whistle-blower said. Specifically, he mentioned a 2008 Senate investigation into “dividend tax abuse” that found it was depriving the Treasury of $100 billion every year. The report led to a ban on dividend arbitrage tied to stock in United States corporations.
  • But nothing prevented American bankers from conducting such trades with foreign companies on foreign soil.
  • German efforts to stamp out cum-ex with legislation, in 2007 and 2009, left holes through which certain types of financial players could still crawl. This included private pension plans in the United States, a niche financial product for wealthy people who want the kind of privacy, and exotic investment options, that Fidelity doesn’t offer.
  • Investors will have problems of their own. Many have said they had no idea how cum-ex traders returned such dazzling profits. That defense became less plausible in 2012, after the German government spent millions of dollars to buy 11 hard drives from industry insiders. The hard drives were filled with marketing fliers, written by bankers, who sold cum-ex with an antigovernment pitch.
  • “We learned that it was very common for these bankers to have conversations over coffee with clients about cum-ex,” said Norbert Walter-Borjans, a former minister of finance for North Rhine-Westphalia. “They would say, ‘If you have a problem with how your hard-earned money is being spent in taxes, we’ve got an idea for you.’”
  • Authorities across Europe are said to be waiting for a resolution of the Bonn trial to move ahead with their own. Many are livid that Germany didn’t alert them sooner about the perils of cum-ex. The failure, say lawyers, stems from a Europe-wide hypersensitivity about privacy, which is especially acute when it comes to taxes.
  • In 2012, soon after Germany shut down its cum-ex problem, a London trader began a cum-ex scheme that fleeced the Danish tax authority of $2 billion, officials there say. The trader, Sanjay Shah, who now lives in Dubai, denies wrongdoing but has never been shy about the source of his wealth.When he bought a $1.3 million yacht a few years ago, he found the perfect name: Cum-Ex.
Javier E

Wind and Solar Power Advance, but Carbon Refuses to Retreat - The New York Times - 0 views

www.nytimes.com/...climate-carbon-renewables.html

solar power renewable energy global warming economic

shared by Javier E on 08 Nov 17 - No Cached
  • carbon intensity of energy. Advertisement Continue reading the main story The term refers to a measure of the amount of CO2 spewed into the air for each unit of energy consumed. It offers some bad news: It has not budged since that chilly autumn day in Kyoto 20 years ago.
  • Even among the highly industrialized nations in the Organization for Economic Cooperation and Development, the carbon intensity of energy has declined by a paltry 4 percent since then
  • Perhaps renewables are not the answer.
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  • Over the past 10 years, governments and private investors have collectively spent $2 trillion on infrastructure to draw electricity from the wind and the sun,
  • Capacity from renewable sources has grown by leaps and bounds, outpacing growth from all other sources — including coal, natural gas and nuclear power — in recent years. Solar and wind capacity installed in 2015 was more than 10 times what the International Energy Agency had forecast a decade before.
  • Still, except for very limited exceptions, all this wind and sun has not brought about much decarbonization. Indeed, it has not added much clean power to the grid.
  • “We will need twice as much investment over a sustained period of time to get anywhere close to achieving 2 degrees,”
  • Integrating renewable sources requires vast investments in electricity transmission — to move power from intermittently windy and sunny places to places where power is consumed. It requires maintaining a backstop of idle plants that burn fossil fuel, for the times when there is no wind or sun to be had. It requires investing in power-storage systems at a large scale.
  • These costs will ultimately be reflected in power prices. One concern is that by raising the retail cost of electricity they will discourage electrification, encouraging consumers to rely on alternative energy sources like gas — and pushing CO2 emissions up.
  • Another concern is that they will drive wholesale energy prices down too far. Because they produce the most energy when the sun is up and the wind is blowing, renewable generators can flood the grid at critical times of the day, slashing the price of power. This not only threatens the solvency of nuclear reactors, which cannot shut down on a dime and must therefore pay for the grid to accept their power, but also reduces the return on additional investment in renewables.
  • there is some evidence that among investors, at least, the excitement may be waning. After half a decade of sustained increases, investment in solar and wind energy has been fairly flat since 2010, at around $250 billion per year. While that is a lot of money, it is nowhere near enough.
  • Environmental Progress performed an analysis of the evolution of the carbon intensity of energy in 68 countries since 1965. It found no correlation between the additions of solar and wind power and the carbon intensity of energy: Despite additions of renewable capacity, carbon intensity remained flat.
  • I would suggest that the challenge is not just to raise more money. Building a zero-carbon energy system requires broader thinking about the technological mix.
Javier E

Natural Gas, America's No. 1 Power Source, Already Has a New Challenger: Batteries - WSJ - 0 views

www.wsj.com/...c-power-generation-11620236583

natural power source battery technology cost

shared by Javier E on 17 May 21 - No Cached
  • Vistra Corp. owns 36 natural-gas power plants, one of America’s largest fleets. It doesn’t plan to buy or build any more. Instead, Vistra intends to invest more than $1 billion in solar farms and battery storage units in Texas and California as it tries to transform its business to survive in an electricity industry being reshaped by new technology.
  • A decade ago, natural gas displaced coal as America’s top electric-power source, as fracking unlocked cheap quantities of the fuel. Now, in quick succession, natural gas finds itself threatened with the same kind of disruption, only this time from cost-effective batteries charged with wind and solar energy.
  • Natural-gas-fired electricity represented 38% of U.S. generation in 2019
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  • Wind and solar generators have gained substantial market share, and as battery costs fall, batteries paired with that green power are beginning to step into those roles by storing inexpensive green energy and discharging it after the sun falls or the wind dies.
  • President Biden is proposing to extend renewable-energy tax credits to stand-alone battery projects—installations that aren’t part of a generating facility—as part of his $2.3 trillion infrastructure plan, which could add fuel to an already booming market for energy storage.
  • renewables have become increasingly cost-competitive without subsidies in recent years, spurring more companies to voluntarily cut carbon emissions by investing in wind and solar power at the expense of that generated from fossil fuels.
  • the specter of more state and federal regulations to address climate change is accelerating the trend.
  • the combination of batteries and renewable energy is threatening to upend billions of dollars in natural-gas investments, raising concerns about whether power plants built in the past 10 years—financed with the expectation that they would run for decades—will become “stranded assets,” facilities that retire before they pay for themselves.
  • as batteries help wind and solar displace traditional power sources, some investors view the projects with caution, noting that they, too, could become victims of disruption in coming years, if still-other technological advances yield better ways to store energy.
  • most current batteries can deliver power only for several hours before needing to recharge. That makes them nearly useless during extended outages.
  • Duke Energy Corp. , a utility company based in Charlotte, N.C., that supplies electricity and natural gas in parts of seven states, is still looking to build additional gas-fired power plants. But it has started to rethink its financial calculus to reflect that the plants might need to pay for themselves sooner, because they might not be able to operate for as long.
  • To remedy that, Duke in public filings said it is considering shortening the plants’ expected lifespan from about 40 years to 25 years and recouping costs using accelerated depreciation, an accounting measure that would let the company write off more expenses earlier in the plants’ lives
  • It may also consider eventually converting the plants to run on hydrogen, which doesn’t result in carbon emissions when burned.
  • Much of the nation’s gas fleet, on the other hand, is relatively young, increasing the potential for stranded costs if widespread closures occur within the next two decades.
  • Gas plants that supply power throughout the day face the biggest risk of displacement. Such “baseload” plants typically need to run at 60% to 80% capacity to be economically viable, making them vulnerable as batteries help fill gaps in power supplied by solar and wind farms.
  • Today, such plants average 60% capacity in the U.S., according to IHS Markit, a data and analytics firm. By the end of the decade, the firm expects that average to fall to 50%, raising the prospect of bankruptcy and restructuring for the lowest performers.
  • “It’s just coal repeating itself.”
  • It took only a few years for inexpensive fracked gas to begin displacing coal used in power generation. Between 2011, shortly after the start of the fracking boom, and 2020, more than 100 coal plants with 95,000 megawatts of capacity were closed or converted to run on gas, according to the EIA. An additional 25,000 megawatts are slated to close by 2025.
  • Batteries are most often paired with solar farms, rather than wind farms, because of their power’s predictability and because it is easier to secure federal tax credits for that pairing.
  • Already, the cost of discharging a 100-megawatt battery with a two-hour power supply is roughly on par with the cost of generating electricity from the special power plants that operate during peak hours. Such batteries can discharge for as little as $140 a megawatt-hour, while the lowest-cost “peaker” plants—which fire up on demand when supplies are scarce—generate at $151 a megawatt-hour, according to investment bank Lazard.
  • Solar farms paired with batteries, meanwhile, are becoming competitive with gas plants that run all the time. Those types of projects can produce power for as little as $81 a megawatt-hour, according to Lazard, while the priciest of gas plants average $73 a megawatt-hour
  • Even in Texas, a state with a fiercely competitive power market and no emissions mandates, scarcely any gas plants are under construction, while solar farms and batteries are growing fast. Companies are considering nearly 88,900 megawatts of solar, 23,860 megawatts of wind and 30,300 megawatts of battery storage capacity in the state, according to the Electric Reliability Council of Texas. By comparison, only 7,900 megawatts of new gas-fired capacity is under consideration.
  • California last summer experienced the consequences of quickly reducing its reliance on gas plants. In August, during an intense heat wave that swept the West, the California grid operator resorted to rolling blackouts to ease a supply crunch when demand skyrocketed. In a postmortem published jointly with the California Public Utilities Commission and the California Energy Commission, the operator identified the rapid shift to solar and wind power as one of several contributing factors.
  • Mr. Morgan, who has closed a number of Vistra’s coal-fired and gas-fired plants since becoming CEO in 2016, said he anticipates most of the company’s remaining gas plants to operate for the next 20 years.
  • Quantum Energy Partners, a Houston-based private-equity firm, in the last several years sold a portfolio of six gas plants in Texas and three other states upon seeing just how competitive renewable energy was becoming. It is now working to develop more than 8,000 megawatts of wind, solar and battery projects in 10 states.
  • “We pivoted,” said Sean O’Donnell, a partner in the firm who helps oversee the firm’s power investments. “Everything that we had on the conventional power side, we decided to sell, given our outlook of increasing competition and diminishing returns.”
Javier E

Mormon Church has misled members on $100 billion tax-exempt investment fund, whistleblo... - 0 views

www.washingtonpost.com/...a-86f3-3b5019d451db_story.html

mormon church investment whistleblower

shared by Javier E on 17 Dec 19 - No Cached
  • His estimate of $7 billion in annual revenue points to a relatively high rate of contributions from the 15 million members. By comparison, the Catholic church in the United States was reported in 2005 to receive $8 billion in annual tithes from 170 million members.
  • These documents were sent to the IRS whistleblower office in Ogden, Utah, together with a thumb drive containing digital versions of documents and emails that Nielsen collected during his time at Ensign, the complaint says. He also provided information on Ensign’s bank accounts and a list of employees whom officials should contact.
  • The complaint describes an aggressive guarding of information by leaders at Ensign. Ensign employees “are trained to be especially sensitive” about data flowing outside the corporation, the complaint states. “Of course, all corporations need to guard their information, but the lengths that [Ensign] goes to borders on paranoia.”
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  • Only four senior Ensign executives are permitted to see the company’s full financial statements, according to the complaint, and investment staff members may access information only on the Ensign assets relating to their own area of work.
  • The company files abbreviated annual tax returns that report the taxes it paid on the small fraction of its investment activity that is taxable. The returns, which are publicly available, show that in some recent years, the company has reported losses of millions of dollars — a period in which, according to the complaint, a fuller accounting of its operations would have shown billions of dollars in profits.
  • This limited type of tax return requires Ensign to disclose the total value of its holdings, which the complaint asserts, has for years run to tens of billions of dollars. On those returns, Ensign has sometimes stated that it held $1 million, other times “more than $1,000,000,” and it once left this section of the paperwork unfilled.
mattrenz16

With Concessions and Deals, China's Leader Tries to Box Out Biden - The New York Times - 0 views

www.nytimes.com/...china-eu-investment-biden.html

shared by mattrenz16 on 03 Jan 21 - No Cached
  • A trade pact with 14 other Asian nations. A pledge to join other countries in reducing carbon emissions to fight global warming. Now, an investment agreement with the European Union.
  • In doing so, he has underlined how difficult it will be for President-elect Joseph R. Biden Jr. to forge a united front with allies against China’s authoritarian policies and trade practices, a central focus of the new administration’s plan to compete with Beijing and check its rising power.
  • China agreed, at least on paper, to loosen many of the restrictions imposed on European companies working in China, open up China to European banks and observe international standards on forced labor.
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  • Noah Barkin, a China expert in Berlin with the Rhodium Group, called the investment agreement in particular “a geopolitical coup for China.”
  • He said China could serve as a model and as a partner in cooperation, and suggested that Europe could play a moderating role between China and the United States.
  • “The values we all cherish in our Sunday sermons must be adhered to if we are not to fall victim to a new systemic rival,” said Reinhard Bütikofer, a German member of the European Parliament who has spoken out against the European investment agreement with China.
  • China’s overtures will not end the anger over its repressive policies, including its documented use of forced labor.
  • The Europeans finalized the investment agreement, for example, a day after the European Union publicly criticized the harsh prison sentence handed down to a Chinese lawyer who reported on the initial coronavirus outbreak in the city of Wuhan.
  • Over the long term, it remains to be seen how significantly China’s pacts and pledges will improve its international image, which plummeted this past year because of its obfuscation over the coronavirus outbreak in Wuhan.
  • A survey by the Pew Research Center in October found that in 14 economically advanced countries, unfavorable attitudes toward China had reached their highest levels in more than a decade. A median of 78 percent of those surveyed said they had little or no confidence that Mr. Xi would do the right thing in world affairs. (One upside for Mr. Xi: 89 percent felt the same way about Mr. Trump.)
  • Mr. Xi’s pledges to accelerate China’s reduction of carbon emissions, which he began making in September, have won international plaudits, even if the government has yet to detail how it will wean itself from coal and other heavily polluting industries.
  • Mr. Trump showed disdain for America’s traditional allies in Europe and Asia, but Mr. Biden has pledged to galvanize a coalition to confront the economic, diplomatic and military challenges that China poses.
  • Mr. Biden’s incoming national security adviser, Jake Sullivan, took to Twitter to hint strongly that Europe should first wait for consultations with the new administration — to no avail.
  • They said the agreement failed to do enough to address China’s abuses of human rights, including labor rights.
kaylynfreeman

The Land That Failed to Fail - The New York Times - 0 views

www.nytimes.com/...china-rules.html

Politics US policy

shared by kaylynfreeman on 20 Nov 18 - No Cached
  • China now leads the world in the number of homeowners, internet users, college graduates and, by some counts, billionaires. Extreme poverty has fallen to less than 1 percent. An isolated, impoverished backwater has evolved into the most significant rival to the United States since the fall of the Soviet Union.
  • in Beijing the question these days is less how to catch up with the West than how to pull ahead — and how to do so in a new era of American hostility
  • The pattern is familiar to historians, a rising power challenging an established one, with a familiar complication: For decades, the United States encouraged and aided China’s rise, working with its leaders and its people to build the most important economic partnership in the world, one that has lifted both nations.
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  • During this time, eight American presidents assumed, or hoped, that China would eventually bend to what were considered the established rules of modernization: Prosperity would fuel popular demands for political freedom and bring China into the fold of democratic nations. Or the Chinese economy would falter under the weight of authoritarian rule and bureaucratic rot.
  • China’s Communist leaders have defied expectations again and again. They embraced capitalism even as they continued to call themselves Marxists. They used repression to maintain power but without stifling entrepreneurship or innovation. Surrounded by foes and rivals, they avoided war, with one brief exception, even as they fanned nationalist sentiment at home. And they presided over 40 years of uninterrupted growth, often with unorthodox policies the textbooks said would fail.
  • There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.
  • China’s Communists studied and obsessed over the fate of their old ideological allies in Moscow, determined to learn from their mistakes. They drew two lessons: The party needed to embrace “reform” to survive — but “reform” must never include democratization.
  • China has veered between these competing impulses ever since, between opening up and clamping down, between experimenting with change and resisting it, always pulling back before going too far in either direction for fear of running aground.
  • The careers of these men from Moganshan highlight an important aspect of China’s success: It turned its apparatchiks into capitalists.
  • Party leaders called this go-slow, experimental approach “crossing the river by feeling the stones” — allowing farmers to grow and sell their own crops, for example, while retaining state ownership of the land; lifting investment restrictions in “special economic zones,” while leaving them in place in the rest of the country; or introducing privatization by selling only minority stakes in state firms at first.
  • Mikhail Gorbachev, the last leader of the Soviet Union, tried to break the hold of these bureaucrats on the economy by opening up the political system. Decades later, Chinese officials still take classes on why that was a mistake. The party even produced a documentary series on the subject in 2006, distributing it on classified DVDs for officials at all levels to watch.
  • Afraid to open up politically but unwilling to stand still, the party found another way. It moved gradually and followed the pattern of the compromise at Moganshan, which left the planned economy intact while allowing a market economy to flourish and outgrow it.
  • American economists were skeptical. Market forces needed to be introduced quickly, they argued; otherwise, the bureaucracy would mobilize to block necessary changes. After a visit to China in 1988, the Nobel laureate Milton Friedman called the party’s strategy “an open invitation to corruption and inefficiency.”
  • The United States and Japan, both routinely vilified by party propagandists, became major trading partners and were important sources of aid, investment and expertise
  • At the same time, the party invested in education, expanding access to schools and universities, and all but eliminating illiteracy
  • mainland China now produces more graduates in science and engineering every year than the United States, Japan, South Korea and Taiwan combined.
  • In cities like Shanghai, Chinese schoolchildren outperform peers around the world. For many parents, though, even that is not enough. Because of new wealth, a traditional emphasis on education as a path to social mobility and the state’s hypercompetitive college entrance exam, most students also enroll in after-school tutoring programs — a market worth $125 billion, according to one study, or as much as half the government’s annual military budget.
  • party made changes after Mao’s death that fell short of free elections or independent courts yet were nevertheless significant
  • The party introduced term limits and mandatory retirement ages, for example, making it easier to flush out incompetent officials. And it revamped the internal report cards it used to evaluate local leaders for promotions and bonuses, focusing them almost exclusively on concrete economic targets.
  • These seemingly minor adjustments had an outsize impact, injecting a dose of accountability — and competition — into the political system, said Yuen Yuen Ang, a political scientist at the University of Michigan. “China created a unique hybrid,” she said, “an autocracy with democratic characteristics.”
  • They were rewarded with soaring tax revenues and opportunities to enrich their friends, their relatives and themselves. A wave of officials abandoned the state and went into business. Over time, the party elite amassed great wealth, which cemented its support for the privatization of much of the economy it once controlled.
  • The private sector now produces more than 60 percent of the nation’s economic output, employs over 80 percent of workers in cities and towns, and generates 90 percent of new jobs
  • the bureaucrats stay out of the way. “I basically don’t see them even once a year,” said James Ni, chairman and founder of Mlily, a mattress manufacturer in eastern China. “I’m creating jobs, generating tax revenue. Why should they bother me?”
  • even as he wraps himself in Deng’s legacy, Mr. Xi has set himself apart in an important way: Deng encouraged the party to seek help and expertise overseas, but Mr. Xi preaches self-reliance and warns of the threats posed by “hostile foreign forces.
  • China tapped into a wave of globalization sweeping the world and emerged as the world’s factory. China’s embrace of the internet, within limits, helped make it a leader in technology. And foreign advice helped China reshape its banks, build a legal system and create modern corporations.
  • It was a remarkable act of reinvention, one that eluded the Soviets. In both China and the Soviet Union, vast Stalinist bureaucracies had smothered economic growth, with officials who wielded unchecked power resisting change that threatened their privileges.
  • Mr. Lin was part of a torrent of investment from ethnic Chinese enclaves in Hong Kong, Taiwan, Singapore and beyond that washed over China — and gave it a leg up on other developing countries
  • The timing worked out for China, which opened up just as Taiwan was outgrowing its place in the global manufacturing chain. China benefited from Taiwan’s money, but also its managerial experience, technology and relationships with customers around the world. In effect, Taiwan jump-started capitalism in China and plugged it into the global economy.
  • Before long, the government in Taiwan began to worry about relying so much on its onetime enemy and tried to shift investment elsewhere. But the mainland was too cheap, too close and, with a common language and heritage, too familiar.
  • Now Taiwan finds itself increasingly dependent on a much more powerful China, which is pushing ever harder for unification, and the island’s future is uncertain
  • Many in Washington predicted that trade would bring political change. It did, but not in China. “Opening up” ended up strengthening the party’s hold on power rather than weakening it. The shock of China’s rise as an export colossus, however, was felt in factory towns around the world.
  • In the United States, economists say at least two million jobs disappeared as a result, many in districts that ended up voting for President Trump.
  • The pro-democracy movement in 1989 was the closest the party ever came to political liberalization after Mao’s death, and the crackdown that followed was the furthest it went in the other direction, toward repression and control. After the massacre, the economy stalled and retrenchment seemed certain. Yet three years later, Deng used a tour of southern China to wrestle the party back to “reform and opening up” once more. Many who had left the government, like Mr. Feng, suddenly found themselves leading the nation’s transformation from the outside, as its first generation of private entrepreneurs.
  • The fear is that Mr. Xi is attempting to rewrite the recipe behind China’s rise, replacing selective repression with something more severe.
  • The internet is an example of how it has benefited by striking a balance. The party let the nation go online with barely an inkling of what that might mean, then reaped the economic benefits while controlling the spread of information that could hurt it.
  • “The basic problem is, who is growth for?” said Mr. Xu, the retired official who wrote the Moganshan report. “We haven’t solved this problem.”
  • “The cost of censorship is quite limited compared to the great value created by the internet,” said Chen Tong, an industry pioneer. “We still get the information we need for economic progress.”
  • China is not the only country that has squared the demands of authoritarian rule with the needs of free markets. But it has done so for longer, at greater scale and with more convincing results than any other.
  • Washington is maneuvering to counter Beijing’s growing influence around the world, warning that a Chinese spending spree on global infrastructure comes with strings attached.
  • both left and right in America have portrayed China as the champion of an alternative global order, one that embraces autocratic values and undermines fair competition. It is a rare consensus for the United States, which is deeply divided about so much else, including how it has wielded power abroad in recent decades — and how it should do so now.
  • Mr. Xi, on the other hand, has shown no sign of abandoning what he calls “the great rejuvenation of the Chinese nation.” Some in his corner have been itching to take on the United States since the 2008 financial crisis and see the Trump administration’s policies as proof of what they have always suspected — that America is determined to keep China down.
  • there is also widespread anxiety over the new acrimony, because the United States has long inspired admiration and envy in China, and because of a gnawing sense that the party’s formula for success may be faltering.
  • Prosperity has brought rising expectations in China; the public wants more than just economic growth. It wants cleaner air, safer food and medicine, better health care and schools, less corruption and greater equality. The party is struggling to deliver, and tweaks to the report cards it uses to measure the performance of officials hardly seem enough.
  • Now, many companies assign hundreds of employees to censorship duties — and China has become a giant on the global internet landscape.
  • Mr. Xi himself has acknowledged that the party must adapt, declaring that the nation is entering a “new era” requiring new methods. But his prescription has largely been a throwback to repression, including vast internment camps targeting Muslim ethnic minorities. “Opening up” has been replaced by an outward push, with huge loans that critics describe as predatory and other efforts to gain influence — or interfere — in the politics of other countries. At home, experimentation is out while political orthodoxy and discipline are in.
  • n effect, Mr. Xi seems to believe that China has been so successful that the party can return to a more conventional authoritarian posture — and that to survive and surpass the United States it must
  • Certainly, the momentum is still with the party. Over the past four decades, economic growth in China has been 10 times faster than in the United States, and it is still more than twice as fast. The party appears to enjoy broad public support, and many around the world are convinced that Mr. Trump’s America is in retreat while China’s moment is just beginning
  • The world thought it could change China, and in many ways it has. But China’s success has been so spectacular that it has just as often changed the world — and the American understanding of how the world works.
  • There is no simple explanation for how China’s leaders pulled this off. There was foresight and luck, skill and violent resolve, but perhaps most important was the fear — a sense of crisis among Mao’s successors that they never shook, and that intensified after the Tiananmen Square massacre and the collapse of the Soviet Union.
  • But China had a strange advantage in battling bureaucratic resistance. The nation’s long economic boom followed one of the darkest chapters of its history, the Cultural Revolution, which decimated the party apparatus and left it in shambles. In effect, autocratic excess set the stage for Mao’s eventual successor, Deng Xiaoping, to lead the party in a radically more open direction.
  • In other words, he appears to have less use for the “opening up” part of Deng’s slogan.
  • Now Mr. Xi is steering the party toward repression again, tightening its grip on society, concentrating power in his own hands and setting himself up to rule for life by abolishing the presidential term limit. Will the party loosen up again, as it did a few years after Tiananmen, or is this a more permanent shift? If it is, what will it mean for the Chinese economic miracle?
  • The question now is whether it can sustain this model with the United States as an adversary rather than a partner.
  • kaylynfreeman on 08 Feb 21
     
    "In effect, Mr. Xi seems to believe that China has been so successful that the party can return to a more conventional authoritarian posture - and that to survive and surpass the United States it must. Certainly, the momentum is still with the party. Over the past four decades, economic growth in China has been 10 times faster than in the United States, and it is still more than twice as fast. The party appears to enjoy broad public support, and many around the world are convinced that Mr. Trump's America is in retreat while China's moment is just beginning"
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