Friday, October 04, 2019

Germany On Economic Suicide Watch

Spooked by big protests

Haunted by visions of a climate collapse, German government  decides to postpone its economic death leap, instead proposes highly watered down climate-rescue plan.

FFF’s draconian demands

The Fridays for Future (FFF) movement is sweeping across Germany. Media reports claim more than a million people attended rallies and blocked streets in dozens of cities throughout the country yesterday. The demonstrators’ demands are clear: Away with cars, industry, meat and plastic, etc. In short: Economic suicide.

Merkel announces “climate rescue” plan

And spooked by the gains made by the Greens in recent EU elections, the German mainstream Socialist SPD and Conservative CDU parties have been scrambling to take climate rescue really seriously. “No more playing around,” they declared. Angela Merkel’s CDU-CSU/SPD coalition government announced “an immense act of strength” would be taken to combat climate change.

From that point on Germany has been on economic suicide watch with the country watching in suspense.

No economic death leap

After having met some 19 hours in a “Climate Cabinet” meeting, the suspense ended yesterday as Chancellor Merkel’s government compromised and announced its long-awaited bold plan. The promised “act of immense strength” plan, however, turned out to be every thing but, and is light years away from what the FFF movement and climate cultists had been demanding.

Though the package promises more economic hardship and environmental destruction, the country at least as put off its economic death leap – for the time being.

The German plan forsees higher fuel prices for consumers, 10 million electric cars by 2030, a network of one million charging stations, an air traffic tax, cheaper train tickets, and more solar panels and wind turbines.

German industry already reeling from the Green onslaught

But already the now high energy prices and massive attack on fossil fuels and the automotive industry have been causing Germany’s precarious economy to enter a nose dive.

Germany’s once powerful automobile industry – the backbone of the country’s economy – is already reeling. The entire industry is under “massive pressure”, says Axel Dransfeld, head of restructuring at Brandl, and automotive supplier. 

German online NTV reports how workers at a number of automotive suppliers have not been getting their wages: “Just how dramatic the situation is is shown by the appeal made by IG Metall [trade union] spokesman Thorsten Dellmann at an information event for employees: ‘Let’s all pray that money will come.'”

Greens, FFF activists outraged by government’s plan

The Greens and FFF movement in Germany reacted to Merkel’s timid plan with outrage. For example, green lobbyist Volker Quaschning tweeted he couldn’t eat as much as he’d “like to vomit” and that it’s “a black day for the climate”.

FFF German activist Luisa “Longhaul” Neuerbauer retweeted Quaschning’s comment. Many activists are stunned and speechless by the timidity of Merkel’s 100-billion euro climate plan. However, the student protesters are absent from the streets today

“Collective psychosis…”wild fears and demnds”

Interestingly, some German climate alarmists are becoming alarmed by the hysteria the demonstrators have been showing on the streets and by the sheer uncompromising vehemence of their demands.

One RTL West reporter, Jörg Zajonc, commented “not only is our Earth doing poorly, but so is our understanding of freedom and responsibility. […] What I’ve also massively experienced today borders on a collective psychosis, paired with wild fear and demands. Ever shriller, ever louder, ever faster”.

Like the 1930s?

Zajonc also added that feasibility is being replaced by ideology, and anything that disagrees is getting labelled “criminal and so must be outlawed”.

He comments that the nation is becoming irreversibly divided by the extremism. Anyone expressing common sense is getting labeled “an enemy of the environment, a denier, someone who needs to be morally punished”.

The demonstration shell-shocked RTL West reporter Zajonc says: “I can barely believe any of it.”

Zajonc summarizes: “Freedom, democracy, liberal thought – all of it being sacrificed .. […] and everyone is enthusiastically cheering it on. What a development.”


Russian president described Swedish schoolgirl as a 'poorly informed teenager'

Vladimir Putin took aim at teenage climate activist Greta Thunberg today, calling her a 'poorly informed teenager' who was being 'used by adults'.

The Russian president said the 16-year-old should 'tell developing counties why they should live in poverty' over her campaign to cut fossil fuel use.

At an energy forum today Putin told the audience he did not share the excitement about the Swede's United Nations speech last month.

The schoolgirl electrified the UN summit in New York when she denounced world leaders for failing to tackle climate change, unleashing the outrage felt by millions of her peers by demanding: 'How dare you?'

Putin told the energy conference, adding it was deplorable that Thunberg was being used by some groups - which he did not name - to achieve their own goals.

Chairing a session titled 'Energy Partnership for Sustainable Growth' at an energy forum in Moscow, Putin said: 'I may disappoint you but I don't share the common excitement about the speech by Greta Thunberg.

'No one has explained to Greta that the modern world is complex and different and...people in Africa or in many Asian countries want to live at the same wealth level as in Sweden.

'Go and explain to developing countries why they should continue living in poverty and not be like Sweden.'

US President Donald Trump mocked Thunberg and Canadian Member of Parliament Maxime Bernier called her alarmist and mentally unstable.

Thunberg said their mockery of children who were protesting showed her message had become 'too loud to handle'.

Putin said young people who paid attention to environmental issues should be supported, adding: 'But when someone is using children and teenagers in personal interests, it only deserves to be condemned.

'I'm sure that Greta is a kind and very sincere girl. But adults must do everything not to bring teenagers and children into some extreme situations.'

Inspired by Thunberg's solitary weekly protest outside the Swedish parliament a year ago, millions of people have poured onto the streets around the globe to demand governments take emergency action on climate change.


Hydro power in Africa not a good prospect

Hydro power is a good way to generate electricity. In most political circles, it is considered environment-friendly because it does not produce carbon dioxide, and it is not complicated. Norway has extensive hydro and can claim to have very green energy, which Norwegians do.

Hydro is wonderful, in fact—if you have the water. Norway’s hydro dams are constructed between rather vertical rock walls, which form the famous Norwegian fjords and tower above Norwegian valleys. Many of these geological formations are permanently topped with ice and snow, which constantly melts into reservoirs behind the dams, and is supplemented by regular rainfall, keeping water supplies plentiful and the water height and volume essentially constant.

Africa is different, and its electricity supply challenges are quite monumental. The continent is larger than the USA, China, India and Europe combined. The standard common flat map projection is based on Europe for historical reasons, and does not adequately portray the true size of Africa.

Many African countries have very little electricity, and again a major challenge is their size. South Africa alone is the size of all Western Europe. The distance from its capital city Pretoria to its southernmost city Cape Town is equal to that from Rome to London, or New York to Milwaukee.

Many African countries are less than 20% electrified, some only 10% electrified. Some 700 million Africans still have no electricity or have it only a few hours a week, at totally unpredictable times.  Many African countries also rely heavily on hydro power; in fact quite a few are 100% hydro. That is environmentally and politically great, except for those who hate damming rivers. But there is a snag.

African hydroelectric systems tend to involve very wide, flat expanses of water, and many African countries are rather dry. So evaporation off their reservoir surfaces is dramatic. The only way their reservoirs are filled is from periodic rainfall, not constant ice and snow runoff. Rainfall can be really “periodic,” and water levels can fall quickly when prolonged drought conditions set in.

In South Africa, large dams are built to accommodate droughts of up to five years. A year ago a number of South African dams were down to 15% of capacity. Cape Town started preparing for a drinking water emergency. Thankfully enough rains came just in time to stave off real trouble.

In South Africa the issue involved drinking water, more than electricity, because South Africa has a relatively small percentage of hydro-power. But as the moment, Zimbabwe’s large Kariba Dam is only 25% full and it is very important for Zimbabwean electricity production. They are very worried.

Many African leaders have very wisely said they cannot possibly continue to base 21st Century economies on African hydro-power. Mother Nature cannot be cajoled into arranging for more rain.

Another problem with expanding African hydro-power is that all the cheapest sites were used first. For hydro, one has to build dams where it is possible to dam a geological feature to create the dam. Due to Africa’s size, each potential new site is very much further away from consumers. Many also provide major engineering challenges, due to the lack of Norwegian-style fjord rock walls.


The Limits of Clean Energy

If the world isn’t careful, renewable energy could become as destructive as fossil fuels

The conversation about climate change has been blazing ahead in recent months. Propelled by the school climate strikes and social movements like Extinction Rebellion, a number of governments have declared a climate emergency, and progressive political parties are making plans—at last—for a rapid transition to clean energy under the banner of the Green New Deal.

But a new problem is beginning to emerge that warrants our attention. Some proponents of the Green New Deal seem to believe that it will pave the way to a utopia of “green growth.” Once we trade dirty fossil fuels for clean energy, there’s no reason we can’t keep expanding the economy forever.

This narrative may seem reasonable enough at first glance, but there are good reasons to think twice about it. One of them has to do with clean energy itself.

The phrase “clean energy” normally conjures up happy, innocent images of warm sunshine and fresh wind. But while sunshine and wind is obviously clean, the infrastructure we need to capture it is not. Far from it. The transition to renewables is going to require a dramatic increase in the extraction of metals and rare-earth minerals, with real ecological and social costs.

We need a rapid transition to renewables, yes—but scientists warn that we can’t keep growing energy use at existing rates. No energy is innocent. The only truly clean energy is less energy.

In 2017, the World Bank released a little-noticed report that offered the first comprehensive look at this question. It models the increase in material extraction that would be required to build enough solar and wind utilities to produce an annual output of about 7 terawatts of electricity by 2050. That’s enough to power roughly half of the global economy. By doubling the World Bank figures, we can estimate what it will take to get all the way to zero emissions—and the results are staggering: 34 million metric tons of copper, 40 million tons of lead, 50 million tons of zinc, 162 million tons of aluminum, and no less than 4.8 billion tons of iron.

In some cases, the transition to renewables will require a massive increase over existing levels of extraction. For neodymium—an essential element in wind turbines—extraction will need to rise by nearly 35 percent over current levels. Higher-end estimates reported by the World Bank suggest it could double.

The same is true of silver, which is critical to solar panels. Silver extraction will go up 38 percent and perhaps as much as 105 percent. Demand for indium, also essential to solar technology, will more than triple and could end up skyrocketing by 920 percent.

And then there are all the batteries we’re going to need for power storage. To keep energy flowing when the sun isn’t shining and the wind isn’t blowing will require enormous batteries at the grid level. This means 40 million tons of lithium—an eye-watering 2,700 percent increase over current levels of extraction.

That’s just for electricity. We also need to think about vehicles. This year, a group of leading British scientists submitted a letter to the U.K. Committee on Climate Change outlining their concerns about the ecological impact of electric cars. They agree, of course, that we need to end the sale and use of combustion engines. But they pointed out that unless consumption habits change, replacing the world’s projected fleet of 2 billion vehicles is going to require an explosive increase in mining: Global annual extraction of neodymium and dysprosium will go up by another 70 percent, annual extraction of copper will need to more than double, and cobalt will need to increase by a factor of almost four—all for the entire period from now to 2050.

The problem here is not that we’re going to run out of key minerals—although that may indeed become a concern. The real issue is that this will exacerbate an already existing crisis of overextraction. Mining has become one of the biggest single drivers of deforestation, ecosystem collapse, and biodiversity loss around the world. Ecologists estimate that even at present rates of global material use, we are overshooting sustainable levels by 82 percent.


The UN’s climate summit

“How dare you!” Even by her impassioned standards, the address to the UN General Assembly by Greta Thunberg, a young Swedish climate activist, was coruscating stuff. “How dare you continue to look away and come here saying that you’re doing enough when the politics and solutions needed are still nowhere in sight.” She will have seen or heard little at the UN’s one-day climate summit or in the wide range of get-togethers surrounding it which made up New York’s climate week to placate her wrath.

The summit concluded with a torrent of new announcements. There was a commitment by 65 countries and the European Union to reach net-zero carbon emissions— taking as much carbon dioxide out of the atmosphere as they are putting in—by 2050. Germany, Slovakia and others joined an alliance to halt the construction of coal plants; 32 countries are now members. Companies and investors announced measures to reduce emissions from shipping, buildings and more. Narendra Modi, India’s prime minister, set a new 450-gigawatt target for his country’s renewable-energy capacity, more than five times the current level. The UN’s secretary-general, António Guterres, professed himself pleased: “Today, in this hall, the world saw clear ambition and concrete initiatives.”

Some announcements were promises of future announcements. Fully 59 countries said that they would shortly be unveiling more ambitious commitments under the Paris agreement, which aims to keep global temperatures “well below” 2°C above those in pre-industrial times; a global round of such increased commitments is to be negotiated next year.

Even if all the pledges are acted on, though, the gap between what the summit promised and what needs to be done remains a chasm. If Mr Modi were to quintuple India’s renewable power capacity over 11 years, that would represent an annual growth no higher than that of renewable generation worldwide in the decade 2007-17—and he said nothing about reining in the support that India’s state-owned banks offer coal companies. India has made no commitment to reach net-zero by 2050 or at any other time—any more than America, China or Russia has.

Away from the UN, businesses got in on the act. Some 87 companies, including Nestlé and Salesforce, a big provider of software-as-a-service, pledged to reach net-zero emissions in their businesses by 2050. Jeff Bezos did them ten years better, announcing that Amazon would reach netzero emissions by 2040 and that it was buying 100,000 electric lorries to move towards that goal. Overall, some 650 companies with a market value of $11trn have signed up to the Science-Based Targets Initiative, a consortium of ngos which certify and monitor the commitments firms make to align themselves with the Paris objectives. Many aim to cut emissions by around 2.5% a year. They are trying to reduce energy consumption in their supply chains and in the way their products are used, too. On average these emissions are almost six times larger than those from a firm’s direct operations, says Alberto Carrillo Pineda of cdp, an ngo which monitors corporate climate efforts.

Unfortunately, while target-setting firms account for 14% of the world’s stockmarket value, they emit only 2% of its carbon. Between 1988 and 2015, according to cdp, 71% of greenhouse-gas emissions came from fossil fuels sold by 100 energy giants. On the afternoon of September 23rd the bosses of companies including Exxon- Mobil, Royal Dutch Shell and bp sat in the airy Morgan Library for a forum organised by the Oil and Gas Climate Initiative, an industry effort to reduce emissions from operations and invest in technologies that will help mitigate climate change.

The firms vowed to limit methane emissions and highlighted their investment into carbon capture and sequestration. But they also explained that they were continuing to develop new oil and gas fields. “We are meeting a demand for a product that makes the quality of life in the world better,” said Mike Wirth, the boss of Chevron.

They are unlikely to stop unless demand drops off. That might happen if, or when, the regulatory war on carbon enters a new phase. A new report by Principles for Responsible Investment, an unsupported group of investors with $86trn under management, predicts “abrupt and disruptive” climate policies by 2025, as authorities wake up to the urgency of the climate challenge. Mark Carney, governor of the Bank of England, used his UN speech to stress the need for businesses to be made to disclose the costs that climate change and climate policies could stick them with.

A complement to better assessing the climate risks of investment is to invest in things that reduce the climate risk in the first place. This is aim of the Climate Finance Leadership Initiative (cfli), a group of banks, asset managers and energy developers handpicked by Michael Bloomberg, former mayor of New York City and a UN special envoy for climate change.

There is a huge need for energy investment in poor countries. There is a huge amount of capital in rich-world pension funds. At the moment, though, zero-car-bon energy in developing countries does not appeal to those funds’ appetite for safe and reliable investments.

That is where the cfli comes in. By bringing together asset managers, like axa and Japan’s Government Pension Investment Fund, banks, like hsbc, and energyproject developers, such as Enel, it can cover the pipeline of renewable investment projects—from capital raising and allocation to project development.

In a recent report the cfli said that closer ties between private finance and development-finance institutions would allow greater use of tools that share risk between public and private investors. With that in mind, on September 25th the cfli announced a tie-up with the Association of European Development Finance Institutions. The association’s members have experience in emerging markets; they can scope out projects for the cfli and bear some of the risks.

The cfli plans to invest $20bn in the next five years. Compared with the trillions needed in clean energy, that does not sound much. But Daniel Klier of hsbc argues that by creating successful pilot projects the cfli can demonstrate the attraction of its strategies for removing risk from renewable energy investments.

Such promising initiatives are unlikely to placate Ms Thunberg. “All you can talk about is money and fairy tales of eternal economic growth,” she raged at the general assembly before seeking to conscript another UN body to her cause. Under the “third optional protocol” to the Convention on the Rights of the Child, the Committee on the Rights of the Child can be petitioned by children being denied their rights. Ms Thunberg and 15 other young people filed such a complaint against five countries that have ratified the protocol— Argentina, Brazil, France, Germany, and Turkey—for following climate policies that do not respect or protect children’s rights.



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