Sunday, June 8, 2014

An Australian Boom Town Feels Chill of Commodity Price Decline

I commented two years ago that the Aussie boom will come to an end as hedge funds jam in to Aussie while driving a resources infrustrature boom based on the peek in Chinese demand, which would not last.

After Decade of Soaring Prices, a Queensland, Australia, Mining Town Is Hurting
By Rhiannon Hoyle
As China's growth has slowed, residents have abandoned Australian mining towns like Moranbah that once benefited from Beijing's boom.
MORANBAH, Queensland—Two years ago, real-estate agent Bella Exposito said she was selling as many as 25 houses a day as soaring coal prices lured workers and investors to this flyspeck Outback town.
As of May this year, she has sold three.
A cream-and-brown weatherboard house near her office rented for nearly US$7,000 a month when the region's coal industry was booming; now it has been empty for 12 months. Downtown shops have gone vacant. At Café 17, a local diner serving eggs and baked beans in the morning, visitors could fire a cannon and not hit a soul some days.

"There is a lot of hurt in the town," says one mine worker employed at the Goonyella Riverside coal mine run by BHP Billiton Ltd.BHP.AU +0.11% and Mitsubishi Corp. 8058.TO -0.34% , which is among the many operations to pare workers over the past year. "It feels like it is dying a slow death."
After a decade of soaring commodity prices, this is what it looks like when the party starts to end.
For years, the global grab for coal, iron ore, copper and other commodities brought riches to small mining communities across the globe. It also helped lift the broader economies of resource-rich nations from Peru to Mongolia to Indonesia. In Australia, a heavyweight in the industry, the boom helped the country sidestep recession when other developed economies hit the wall in recent years.
But more recently, commodity prices have fallen, in some cases dramatically, because of jitters over the cooling economy in China—where growth in commodity imports has slowed—and rising supply from mines planned when markets were booming.
Prices for steelmaking coal have slumped by half since the start of 2012 to around US$110 a ton, their lowest level in seven years. Iron-ore prices have dropped to less than $95 a ton from a peak of more than $190 in 2011, while copper, gold and other commodities have also declined.
While current prices are still generally higher than a decade ago, and optimists hope for a recovery, prices are low enough that some mines are now losing money. Big resources firms like BHP, Rio Tinto PLC and Anglo American PLC have vowed to strip billions of dollars from their annual costs to safeguard profits and improve returns to shareholders.
That means shuttering mines, delaying new projects and slashing jobs in communities that have benefited from the boom. While not all mining towns are as bad off as Moranbah, the downturn is a reminder that overreliance on commodities can be dangerous, even in places that seemed to have everything going for them not long ago.
In South Africa, producers of platinum, gold and coal have cut thousands of jobs, including in smaller communities like Carletonville, west of Johannesburg in the country's Witwatersrand goldfields. Municipal leaders there expressed regret in their most recent annual report for a "problematic" over-dependence on mining, while the national government is licking its wounds from lost funding from mining and petroleum royalties and leases, which dropped 20% in the year ended March 2013.
Overall economic growth in South Africa slowed to 1.9% last year from a 2000s peak of 5.6% in 2006, in part because of weaker resources revenues.

In Brazil, whose economy soared on the back of iron ore and other commodity exports, forecasters now expect growth to be as little as 1.5% this year, down from 7.5% in 2010. Jobs at mines in places like Parauapebas—a town that sprouted up on the edge of the Amazon when mining giant Vale SA started producing iron ore in the nearby Carajas hills in the 1980s—have become scarce.
"I've been living here since '97, and there has never been such a lack of jobs," said 38-year-old Benildo Oliveira dos Santos, a mechanic, as he waited in line outside an unemployment office late last year.
In Australia, leaders are struggling to replace revenue and jobs from a resources boom many people thought would last for years to come, based on the expectation that China's heated growth would absorb ever higher amounts of resources for decades.

As mines lay off workers and cut spending, retailers in Moranbah, Queensland, are struggling. Brian Cassey for The Wall Street Journal
Iron ore and coal are the country's largest exports, and eight of the country's top-10 goods and services sold abroad are commodities. At the peak of the commodity surge a few years ago, labor was in such short supply that mine-site truck drivers commanded salaries of A$200,000 (US$185,750) a year.
Over the past 18 months, the Australian mining sector has cut an estimated 30,000 jobs, according to Jody Elliott Consulting, a resources recruitment specialist. Last year was the worst year for job growth in Australia in almost two decades, largely because of commodity-sector weakness, while the national jobless rate recently reached a decade-high of 6.1%.
Australia's economy is still growing: it expanded about 2.4% last year compared with a recent high of 4.5% in 2007. But it is getting harder to plug holes in the national budget without surging mining royalties. The national government recently forecast a A$47 billion budget shortfall for the current fiscal year ending June 30. Spending on resources projects has been falling at its fastest pace in 14 years.
Some of the worst pain has been felt in coal-rich Queensland state, where Moranbah is located. Nearly 10,000 coal-mine workers have been laid off with many mines operating at a loss, according to the Queensland Resources Council.
The Queensland state government reported a A$650 million plunge in the year through June 2013 to A$2.1 billion in revenue from royalties, a set percentage from the sale of commodities demanded by the government for extracting the country's resources. State officials have deferred plans to ease payroll taxes and are looking to sell assets like toll roads, among other steps, to balance the books.
For Moranbah, a tiny town more than 600 miles north of Brisbane surrounded by cattle stations, low-lying scrub and gum trees, that is a bitter pill to swallow.
Coal mining is so ingrained here that the local newsstand sells postcards of coal trains and mining equipment—like dragline machines, which can haul hundreds of tons of waste rock in a single sweep—while the local child-care center uses a cartoon dump truck as its logo.
The town was established in 1969 to serve new mines in the region, like the Goonyella operation set up by Utah Development Co., which would be acquired by BHP Billiton BLT.LN +0.58% in 1984.
More mines opened, and Moranbah grew rapidly in the 1970s and 1980s, despite an inhospitable climate with temperatures of 104 degrees or above in the summer. Locals put down roots and took pride in their expanding community, winning multiple "Tidy Towns" awards from the Keep Australia Beautiful Council. A key moment: In 1982, residents established their first cemetery, which meant they no longer had to transport bodies elsewhere to be laid to rest.
After leveling off for a while in the 1990s, growth took off again in the 2000s, when Asian demand for coal spiked and prices surged.
McDonald's MCD -0.48% opened and the area's population ballooned by more than 1,000 people a year, including temporary workers who would fly in for stretches at the mines.
At the Moranbah Community Workers Club, a bar and bistro with flat-screen TVs and designer chairs, proprietors borrowed to finance a A$5 million dollar renovation in 2012 and 2013 that included a new A$100,000 keg room. Housing prices went through the roof as local mines worked around the clock.
"We thought: Finally, you know, we are all going to get somewhere," said Leanne Ellis, who runs Café 17 and has lived in the town for 26 years.
Then, almost as quickly as it began, the boom stopped.
The BMA joint venture of BHP and Mitsubishi Corp., the area's largest employer, closed its nearby Norwich Park and Gregory mines in 2012, wiping out some 1,200 jobs. Now it is axing 230 more at its Saraji mine, half an hour's drive south of the town, though it said some positions could be relocated elsewhere.

In all, BMA has pared its workforce in the Bowen Basin—a series of mines for which Moranbah serves as a northern hub—to around 7,000 staff and contractors from more than 10,000.
Other companies including Arrow Energy, a joint venture of Royal Dutch Shell PLC and PetroChina Co. that operates a coal-seam-gas field nearby, have laid off staff. So, too, have many shop owners and other small businesses that rely on resources investment. Resources companies cut spending in the area to about A$1.6 billion in the year to June 2013, from around A$1.8 billion the previous year, according to the latest data collected by local industry.
The Isaac Regional Council, a government body that includes several towns in the area, said annual income from taxes and other revenues dropped to A$142.9 million in the last fiscal year, from A$147.6 million the year prior, and its cash holdings have fallen sharply. The council has cut the budget for infrastructure works and upped tax rates for homeowners.
Many residents have bailed out entirely. Moranbah's population fell to 12,865 from 13,575 in the last fiscal year, with declines likely to continue this year, authorities say. For the Moranbah Bulldogs, who play Australian Rules Football in a local league, it can be a struggle to field a team.
Homes valued around a million Australian dollars are now lucky to get a bite at half that price, according to Ms. Exposito, the real-estate agent. About 300 of the town's 4,000 privately owned houses are vacant, she says.

The town had boomed in the past decade amid high commodity prices, adding amenities like a public pool. Brian Cassey for The Wall Street Journal
Ms. Exposito, who grew up in northern Spain, says she loved the community feel of Moranbah and would hate to see it disappear. She landed in Moranbah in her 20s after moving to Australia and looking for a community that didn't have its own real-estate agency. She says now she spends part of her time consoling depressed residents. She has worries of her own: She owns 20 properties, five of which sit empty.
At Café 17 down the road, Mrs. Ellis says she only needs two staff a day now from five previously. Her husband, Michael, who will celebrate his 50th birthday this year, is among those who have lost their jobs in the mines. They are now debating whether to leave.
"My husband and I love Moranbah, it is our town," said Mrs. Ellis, who moved there at age 19 after growing up in a smaller community to the south. She recalls doing small things to make life better, including banding with merchants to convince the local council to pipe music through the Town Square retail strip. "We look out for each other," she said, as Aretha Franklin's "I Say A Little Prayer" streamed through the loudspeakers.
Local leaders have talked about new industries as diverse as tourism, defense and even algae production for biofuels, but few investors have expressed interest in a place so remote with such high costs.
At least Moranbah still has hundreds of years' worth of coal below the surface. Some of the world's older mining towns, including some in America's Appalachian states, face a bleaker future because their resources are drying up.

German migrants built stately homes, a casino and Africa's first tram after diamonds were discovered in 1908 in this part of the Namib desert. By the 1950s, discoveries dried up and the town was abandoned. 
That gives leaders hope they may only need to get through a temporary period of pain, especially if China's economy stabilizes and its demand for imported coal outpaces new supply growth, as some experts believe could happen a few years from now.
Ashley Dowd, the 38-year-old manager of the Moranbah Community Workers Club, says it will take years to repay debts after his bar's recent renovation. He receives job applications from residents laid off by local miners but says he is usually not able to provide much work, having cut his own staff to 15 from 20 as fewer townsfolk stop by to indulge in Jack Daniel's-soaked pork ribs.
"It will be batten-down-the-hatches and try and ride through this period the best we can," Mr. Dowd said.
—Paul Kiernan contributed to this article.

Sunday, June 1, 2014

Why Germany Dominates the U.S. in Innovation

Very true. Aivars Lode

Reading the headlines, you might think that the most urgent question about national success in innovation and growth is whether the U.S. or China should get the gold medal. The truth is: Germany wins hands down.

Germany does a better job on innovation in areas as diverse as sustainable energy systems, molecular biotech, lasers, and experimental software engineering. Indeed, as part of an effort to learn from Germany about effective innovation, U.S. states have encouraged the Fraunhofer Society, a German applied-science think tank, to set up no fewer than seven institutes in America.

True, Americans do well at inventing. The U.S. has the world’s most sophisticated system of financing radical ideas, and the results have been impressive, from Google to Facebook to Twitter. But the fairy tale that the U.S. is better at radical innovation than other countries has been shown in repeated studies to be untrue. Germany is just as good as the U.S. in the most radical technologies.
What’s more important, Germany is better at adapting inventions to industry and spreading them throughout the business sector. Much German innovation involves infusing old products and processes with new ideas and capabilities or recombining elements of old, stagnant sectors into new, vibrant ones.
Germany’s style of innovation explains its manufacturing prowess. For example, many, if not most, of the Chinese products we buy every day are produced by German-made machinery, and the companies that make them are thriving.
It also explains why Germany’s industrial base hasn’t been decimated, as America’s has. Germany is better at sustaining employment growth and productivity, while expanding citizens’ real incomes. Even with wages and benefits that are higher than those in the U.S. by 66%, manufacturing in Germany employed 22% of the workforce and contributed 21% of GDP in 2010. The bottom line: German manufacturers are contributing significantly to employment growth and real income expansion.
In the U.S., by contrast, fewer and fewer people are employed in middle-class manufacturing jobs. In 2010, just under 11% of the workforce was employed in manufacturing, and manufacturing contributed 13% of GDP. Inequality is on the rise, and the country’s balance of payments is getting worse.
Three factors are at work here:
  • Germany understands that innovation must result in productivity gains that are widespread, rather than concentrated in the high-tech sector of the moment. As a consequence, Germany doesn’t only seek to form new industries, it also infuses its existing industries with new ideas and technologies. For example, look at how much of a new BMW is based on innovation in information and communication technologies, and how many of the best German software programmers go to work for Mercedes-Benz. The U.S., by contrast, lets old industries die instead of renewing them with new technologies and innovation. As a result, we don’t have healthy cohesive industries; we have isolated silos. An American PhD student in computer science never even thinks about a career in the automobile industry — or, for that matter, other manufacturing-related fields.
  • Germany has a network of public institutions that help companies recombine and improve ideas. In other words, innovation doesn’t end with invention. The Fraunhofer Institutes, partially supported by the government, move radical ideas into the marketplace in novel ways. They close the gap between research and the daily grind of small and medium-size enterprises. Bell Labs used to do this in the United States for telecommunications, but Fraunhofer now does this on a much larger scale across Germany’s entire industrial sector.
  • Germany’s workforce is constantly trained, enabling it to use the most radical innovations in the most diverse and creative ways to produce and improve products and services that customers want to buy for higher prices. If you were to fill your kitchen and garage with the best products that your budget could afford, how much of this space would be filled with German products such as Miele, Bosch, BMW, and Audi?
Germany actively coordinates these factors, creating a virtuous cycle among them. Germany innovates in order to empower workers and improve their productivity; the U.S. focuses on technologies that reduce or eliminate the need to hire those pesky wage-seeking human beings. Germany’s innovations create and sustain good jobs across the spectrum of workers’ educational attainment; American innovation, at best, creates jobs at Amazon’s fulfillment centers and in Apple stores.
It’s high time for the U.S. to revamp its innovation system. Americans need to recognize that the purpose of innovation isn’t to produce wildly popular internet services. It’s to sustain productivity and employment growth in order to ensure real income expansion. We need new policies that allow American innovation to be scaled up and produced on American soil, by American workers. Changes need to happen in how we transfer radical inventions from the lab to the marketplace, via a set of public-private institutions that do for America what the Fraunhofer centers do for Germany. We need to think about skills training as a lifelong endeavor, with workers across the spectrum of education being taught how to use new technologies to increase productivity.
Economic growth doesn’t happen at the moment of invention. Only innovation policies that target the complete innovation cycle will succeed in creating economic growth that enhances the welfare of all citizens. There is nothing a German can do that a properly trained and incentivized American cannot.
When Innovation Is Strategy
An HBR Insight Center

Wednesday, March 12, 2014

World Food Clock

If food wastage were to be corrected, it would mean we would have enough food to feed the entire planet; therefore there is no shortgae of farmland- as the Goldmans of the world would have you believe. (check out the link below.) Aivars Lode

Sunday, March 9, 2014

Niagara Falls Frozen

How will they explain this, Niagara Falls frozen. Apparently this has not happened in 100 years. Aivars Lode

Amid the frigid temperatures brought on by the polar vortex, parts of Niagara Falls came to a standstill this week as the waters literally froze in place as they fell.
Niagara Falls resident Tim Williams took these photos on Wednesday at around 7 p.m. from the Canadian side of the Falls, overlooking the American side.
Niagara Falls frozen over

Niagara Falls frozen over
In an email, Williams told CTV Toronto that he spent approximately 30 minutes photographing the Falls.
"I only stopped shooting the Falls because my fingers were freezing in my gloves," he said.
Williams, who has lived in Niagara Falls for eight years, said he's never seen them like this.
Other photos and videos of the frozen Falls were posted to social media.
On Wednesday, the temperature in Niagara Falls dropped to a low of -8 C, but felt like -19 C with the wind chill, according to Environment Canada.
The temperature in Niagara Falls is forecast to rise for the remainder of the week, with a high of 10 C on Saturday, according to the weather agency.

Saturday, March 8, 2014

High-Speed Stock Traders Turn to Laser Beams

This is why we have the Hadron collider; the europeans want to find if there is somethimg faster than light, so they can control hi-speed trading. Aivars Lode

Anova to Use Laser Devices for Fast Communication of Market Data

By SCOTT PATTERSON


As high-speed stock traders push to trade ever faster, their newest move involves harnessing a technology that U.S. military jets use to communicate as they soar across the sky: lasers.
In March, a small Chicago communications company plans to switch on an array of laser devices linking the New York Stock Exchange's data center in Mahwah, N.J., with the Nasdaq Stock Market's data center in another New Jersey community, Carteret.
The lasers, perched atop high-rise apartment buildings, towers and office complexes along the 35-mile stretch between the communities, are the first phase of a grid intended to link nearly all U.S. stock exchanges this way, zipping market data and rapid-fire trades.
It is the latest salvo in the "race to zero," traders' term for their efforts to whittle away the difference between the speed their orders travel at and the speed of light. Zero, the point at which that difference would disappear, has become a kind of holy grail to computerized traders, for whom nanoseconds—billionths of a second—can spell the difference between profit and loss in their algorithm-driven trades.
In recent years, so-called high-frequency trading firms, which account for about half of U.S. stock trading, have adopted first custom-built fiber-optic cables, then microwave and later millimeter-wave transmissions. Networks built on all three technologies operate today, tying together exchanges around the U.S. Internationally, fiber-optic cables laid across the oceans link America's markets with Europe's and Asia's.
Now come lasers.
"This is a never-ending race," said Michael Persico, founder and chief executive of Anova Technologies LLC, the company behind the plan to link the NYSE and Nasdaq data centers in New Jersey by laser.
Computerized trading firms will be able to take advantage of this technology by placing their servers—the machines that spit out their buy and sell orders based on algorithms—at the exchanges' data centers.
Anova also is working on a deal with the New York Stock Exchange under which the NYSE would offer its technology to the exchange's trading clients, according to people familiar with plans of the exchange, which is owned by IntercontinentalExchange Group Inc. Nasdaq, part of Nasdaq OMX Group, already offers its clients a wireless network, one based on microwaves.
Some question whether Anova's lasers will provide a meaningful speed improvement over networks that are already in place, since microwave and millimeter-wave order transmissions also travel at near light speed. "The difference between networks is getting very small in the metro areas," said Stephane Tyc, co-founder of McKay Brothers LLC, an Oakland, Calif., company that provides fast trading networks. Still, firms such as Anova continue pushing to boost traders' speeds by increasingly tiny slivers of a second.
High-speed, computerized firms today trade everything from stocks to oil futures to government bonds, including securities whose prices move instantly when the government releases economic data such as jobs reports. To pare precious fractions of a second off the time it takes to transmit such data, Anova and other communications companies place networking equipment at a data center on 1275 K Street in Washington, physically close to government agencies.
In the latest tactic, some high-speed traders obtain news releases directly from distributors, avoiding the tiny time lag involved in going through the financial news media.
Federal regulators are wary of algorithmic traders' relentless push for speed, worried about the potential for future market shocks such as the "flash crash" of May 6, 2010—when heavy selling and waves of high-speed traders fleeing the market triggered wild stock swings—and the loss of more than $460 million in 45 minutes by electronic-trading firm Knight Capital Group Inc. in August 2012.
"We must think about why this technological arms race is happening and whether it poses any threats to our markets," said Kara Stein, a commissioner of the Securities and Exchange Commission, in a speech in November. "And we should candidly assess the costs and benefits to both investors and businesses."
The Treasury Department's Office of Financial Research in December labeled high-speed trading a "key source of operational risk across all markets."
Defenders of high-frequency trading say the millions of orders its practitioners churn out support the overall financial markets by providing liquidity, meaning the ability to buy or sell without moving prices much.
And rapid-fire traders can serve this function better with greater speed, defenders say. The argument is that the ability to jump in and out of positions more rapidly enables high-speed traders to place more-aggressive bids and offers—and these, in turn, help all investors get the prices they want.
"Speed makes markets way more efficient," said Peter Nabicht, a former high-speed trader who is now a senior adviser to Modern Markets Initiative, a trade group.
As the push for speed grows, it is increasingly expensive for traders, banks and brokerage firms to keep pace. Market players world-wide spent about $1.5 billion in 2013 on technology to increase trading speeds, nearly double the amount spent in 2009, according to estimates by research firm Tabb Group.
What regulators could do if they wanted to slow the race isn't clear. The SEC is considering whether exchanges should set up "kill switches" that could shut down a rogue trading algorithm threatening market havoc.
The competition revved up several years ago when Spread Networks LLC, a company backed by former Netscape Chief Executive Jim Barksdale, spent an estimated $300 million to build a fiber-optic network to transmit orders between Chicago and New York markets. Fiber-optic networks already existed, but Spread's, by using more-direct routes, claimed to shave about three milliseconds—thousandths of a second—off an order's round trip between New York and Chicago. Trading firms ponied up millions of dollars a year to use the network.
Ordinary investors barely noticed the advent of Spread's network in August 2010, but it was a significant event for high-speed firms. Getco LLC, which used the network, saw its expenses shoot up, in part because of the fees charged by Spread, according to a regulatory filing.
Getco acquired Knight last year and now is called KCG Holdings Inc. KCG and Spread both declined to comment.
Spread's lead didn't last. Several companies set up chains of microwave dishes between financial-market data centers in Chicago and New Jersey. These could send orders slightly faster than signals sent through fiber-optic cables, which fly at about two-thirds the speed of light.
Next, several companies, including Anova, started to use millimeter waves, with shorter wavelengths. They can carry more information than standard microwave transmissions. But they don't travel as far, so they have to be reinforced with relay devices at more points.
In all, about a dozen microwave networks, some owned by trading firms, have been set up between the New Jersey data centers and Chicago.
Nasdaq offers one such network to its trading clients, from Strike Technologies LLC, a company whose ranks include former U.S. and Israeli military engineers. Strike says the network can send data between Nasdaq's New Jersey data center and CME Group Inc.'s in Aurora, Ill., in 4.13 milliseconds. The NYSE's possible arrangement to offer Anova's laser technology to clients would be similar, said the people familiar with the exchange's plans, who said they expect a deal in the coming weeks.
While faster than fiber-optic cable, microwave and millimeter-wave systems are vulnerable to rain, wind, solar activity and even flocks of birds, which can disrupt signals. That matters to firms that are trying to execute thousands of trades a minute on dozens of different markets.
At Anova, a major provider of millimeter-wave technology, Mr. Persico worried that some system could come along with better speed or reliability. He looked for a technology with a level of consistency telecom insiders call "five nines"—signal transmissions that are up and running 99.999% of the time.
In 2011, Mr. Persico read an article in a trade journal describing how a Silicon Valley company called AOptix Technologies Inc. had designed military technology using lasers to communicate in battlefield conditions. His first thought: "I wonder if they can put those on a tower?"
The technology traced back to the 1990s, when two scientists designed a method to gather images from outer space that corrected for atmospheric distortions. They developed technology for telescopes with flexible mirrors that could adjust thousands of times a second.
Soon, they realized the technology could also be used to transmit data using lasers. They formed AOptix and contracted with the U.S. government to provide communication devices for military aircraft.
Mr. Persico asked AOptix whether its laser system could be used to send stock-market data. The company was confident it could, because stock data would only have to move from one fixed spot to another.
"Finding a tower isn't hard for us, because we can find airplanes" with the lasers, said the CEO of AOptix, Dean Senner.
Mr. Persico wasn't the only one who thought of adapting the lasers for stock orders. Several Wall Street firms also reached out to AOptix. After weighing offers, AOptix signed a deal with Anova in December 2012, partly, it says, because Anova had backing from a large Wall Street bank. The bank's identity couldn't be learned.
Mr. Persico set about securing rooftops and other spots to place his lasers between the New Jersey communities housing the NYSE and Nasdaq data centers. Anova said it has dozens of trading firms waiting to try the lasers when they go live.
He said the technology is expected to be largely free of weather-related consistency issues. The flexible mirror system weeds out atmospheric distortions, and a stabilizing system—first designed to let planes use the lasers while in flight—helps keep the devices in contact.
The stabilizing system also means the devices can be put in spots where other technology, such as microwave dishes, can't go. That lets the lasers send signals along a straighter path and thus speeds up transmissions, Mr. Persico said.
One firm that plans to use the system is XR Trading LLC of Chicago. It is a "very compelling technology," said XR's president, Matthew Haraburda. He said if it behaves as intended, it could be "a huge development" in trading technology.
Not that it will be the end of the race for speed, though, or will stop traders from trying to think up new ways to move their orders along quickly. Some dream of a replacement for the fiber-optic cables across the Atlantic and Pacific. The idea: Turbocharge intercontinental trading by floating balloons carrying microwave dishes over the ocean.

Sunday, March 2, 2014

Jenkins: Personal Score-Settling Is the New Climate Agenda


It must be Climate change week; now it is described as personal score settling. Aivars Lode

The cause of global carbon regulation may be lost, but enemies still can be punished.
By Holman W. Jenkins, Jr.
Surely, some kind of ending is upon us. Last week climate protesters demanded the silencing of Charles Krauthammer for a Washington Post column that notices uncertainties in the global warming hypothesis. In coming weeks a libel trial gets under way brought by Penn State's Michael Mann, author of the famed hockey stick, against National Review, the Competitive Enterprise Institute, writer Rand Simberg and roving commentator Mark Steyn for making wisecracks about his climate work. The New York Times runs a cartoon of a climate "denier" being stabbed with an icicle.
These are indications of a political movement turned to defending its self-image as its cause goes down the drain. That's how thoroughly defunct, dead, expired is the idea that humanity might take charge of earth's atmosphere through some supreme triumph of the global regulatory state over democracy, sovereignty, nationalism and political self-interest, the very facts of political human nature.
Business World columnist Holman Jenkins Jr. on why climate-change activists are losing the battle for public opinion. Photo: Getty Images
Let's restate more accurately a plan recently announced by Thomas Steyer, a California hedge-fund billionaire whose idea is to make the coming midterms about climate change: He would spend $100 million to flog an issue voters don't care about, to defeat Republicans whose defeat would have no impact on climate change, in order to replace them with Democrats whose election would have no impact on climate change.
Mr. Steyer's thinking is puzzling unless his goal is to make $100 million disappear. If his purpose were to elect Democrats, wouldn't his money go further attacking Republicans on matters of interest to voters? If he wants to move the ball on climate change, wouldn't a better place to start be undoing the damage his fellow climate lobbyists have done to the cause with their hysterical exaggerations, false statements and moral bullying?
He could begin by running ads leveling with Americans about climate science. We know with comfortable certainty that human industry is adding to carbon dioxide, a so-called greenhouse gas, in the atmosphere. An insoluble noise-to-signal problem, though, is how much the human component may have influenced climate change already. And forecasts of future warming depend on theoretical models that are highly speculative and necessarily suspect.
Then there's the political problem: Nothing America could do by itself would make a significant difference. Anything agreed with other countries, given diplomatic incentives, would be an empty gesture designed mainly to benefit incumbent politicians.
Indeed, a rational case for action on cost-benefit grounds is challenging to make at all. Even if it weren't, the nature of human power games, which advocates are powerless to change, means the effort could easily degenerate into a corrupt scramble for climate pork (see America's ethanol and Germany's solar subsidies).
If this sounds like a counsel of despair, think again. The counsel of despair was to rest mankind's hopes on a colossal pipedream. A world-wide social engineering project was never going to happen—luckily, since its results would have been less charming than activists imagine.
After 35 years, it's time to accept that adaptation is the way ahead. The problems of climate change, whatever its causes, are the same old human problems of poverty, disease and natural hazards like floods, storms and droughts. The best hope on offer is the continued accumulation of human wealth and knowledge.
Those who wish to slit their wrists at this point, feel free. But think about this: When human knowhow produces new energy technologies to replace current energy technologies, as it eventually will, we know the new technologies will be lower carbon. Why? Because extracting and distributing fossil fuels is fantastically expensive and becoming more so.
Chevron's CVX -0.31% massive Gorgon gas project in the coastal waters of Australia is expected to cost $54 billion. Exxon, XOM +0.45% Shell and several others are spending $116 billion to get oil from under the Caspian Sea in a remote part of Kazakhstan. Not to be flip, but a battery 10 times more efficient than today's would largely undermine the economics of these projects and make its inventor extraordinarily rich.
But engineering and venture capital (Mr. Steyer's job until he retired a year ago) are hard work and require personal resilience, while the pleasure of climate warriorhood is sitting at your little blog and picturing yourself a moral hero whose opponents deserve to be silenced if not exterminated. In our time, climate activism has devolved into self-medication for the moderately mentally ill (and who's to say this is not a useful service). Anyone genuinely concerned about the climate future might do better to get an engineering or finance degree.

Saturday, March 1, 2014

Climate Change Is Bunk?

Climate change- now the guy that founded Greenpeace says  that man does not cause global warming! Aivars Lode

By: Eric Brown
A Greenpeace founder suggested carbon emissions aren't to blame for climate change.     Photo: Getty Images/iStockphoto
Earlier this week, a co-founder of the environmental group Greenpeace told a Senate panel something unexpected for a green activist: Climate change is not caused by humans.
Patrick Moore, a Canadian ecologist who helped found the organization in 1971 and remained a member for 15 years before leaving in 1986 because he disagreed with the group's turn from science to politics, told the Senate Environment and Public Works Committee, “There is no scientific proof that human emissions of carbon dioxide are the dominant cause of the minor warming of the Earth’s atmosphere over the past 100 years,” according to a Washington Times report. “Today, we live in an unusually cold period in the history of life on earth, and there is no reason to believe that a warmer climate would be anything but beneficial for humans and the majority of other species."

Moore added that humans evolved as a tropical species and can only survive colder climates today because of fire, clothing, and housing. He also said that during the Ice Age, carbon dioxide was 10 times higher than today, but humans still prospered—an interpretation dismissed by some scientists. Moore blamed environmental groups like Greenpeace for spreading misinformation. Activists use faulty computer models and scare tactics to advance their political agendas, he alleged.

Meanwhile, American and British scientists collaborated on a paper released yesterday in Scientific American explaining that, despite occurrences like this winter's polar vortex, any perceived global-warming slowdown will likely be brief.

Scientists from Britain's Royal Academy and the U.S. National Academy of Sciences reported that since a very warm 1998, the warming rate of Earth's surface has slowed slightly—but this change should be only temporary. Notably, the study used accessible language, likely in an attempt to garner a larger, more diverse readership