EU Greenhouse-Gas Emissions

EU Greenhouse-Gas Emissions
Rose 1.1% Last Year

The European Union's greenhouse-gas emissions from key industries rose 1.1% last year, despite its antipollution policies, demonstrating the difficulty in meeting international commitments to fight climate change.

Carbon-dioxide emissions reached 1.914 billion metric tons last year in the sectors covered by Europe's Emission Trading Scheme, according to an analysis of data by Oslo-based Point Carbon, a carbon market-research and consulting firm. The data released Wednesday aren't complete, because some companies' results are still trickling in, but it represents about 93% of the total, according to the EU Web site.

For the past three years, Europe has been trying to reduce emissions by imposing a market-based cap-and-trade system. Industries such as power generators, steel, cement and aluminum are supposed to cap the amount of carbon dioxide they spew. If they can't make their targets, they must buy permits to emit carbon on the open market.

By forcing companies to buy and sell the right to pollute, Europe's system is supposed to give them a financial incentive to clean up their acts. It is also supposed to provide European countries with a way to meet their commitments to the Kyoto Protocol, the United Nations accord that set emissions-cutting targets for the 175 nations that ratified it for the period between this year and 2012.

Some 11,500 factories, oil refineries, steel mills and other installations are covered by the EU scheme, accounting for about half of Europe's total emissions. There is still no limit on the other half, produced by everything from cars and planes to buildings and retail outlets.

But the caps that the EU set for different industries turned out to be too high. As a result, instead of shrinking, as was originally envisioned, emissions in these industries have crept up by about 1% each year since the program began.

Europe's struggle to make its cap-and-trade program work shows just how hard it will be for the industrialized world to achieve any meaningful reduction in greenhouse-gas emissions. Japan isn't faring any better: Its Kyoto targets call for it to reduce emissions by 6% below 1990 levels, but emissions are actually increasing there as well.

The issue is taking on greater importance in the U.S., the world's biggest economy and still the largest emitter of carbon dioxide, the main global-warming gas. All three leading presidential candidates say they are in favor of establishing a cap-and-trade system similar to Europe's, and the Senate is expected to consider cap-and-trade bills this summer.

Europe's cap-and-trade system has been plagued with design and implementation problems from the start. Chief among them: National governments issued too many carbon permits -- essentially a license to pollute -- to regulated industries. As a result, companies had no real incentive to revamp their factories. Regulators in Europe have tried to get the scheme back on track by forcing governments to ratchet down the number of permits they issue during the program's second phase, from 2008 to 2012.

Although the scheme has so far failed to reduce emissions, it has spawned a fast-growing market for trading carbon permits. Last year, the value of all the carbon credits traded in Europe topped $40 billion, up 55% from the previous year. Hedge funds, investment banks and brokers trade carbon permits as they would any other commodity, like gold or oil. And while the data released Wednesday might fuel pessimistic predictions about the effectiveness of the scheme in holding back emissions, financial players were bullish about what it meant for the carbon market.

Patrick Weber, a carbon trader for Allianz AG's investment-banking unit Dresdner Kleinwort in London, spent the day fielding phone calls from German utilities and industrial companies regulated by Kyoto. "We still think there will be a net shortage in carbon credits through 2012, so prices should go up from here," he said.

The price for a carbon permit for delivery in December 2008 increased 4% to €23.45 ($36.58) at the close of trading Wednesday on the European Climate Exchange, up 93 European cents from Tuesday's close at €22.52

Companies such as German utility RWE AG and steelmaker ArcelorMittal are expected to be big buyers of carbon credits in the next phase of the scheme, and an increase in carbon prices could sharply boost their cost of complying with Europe's carbon-emissions caps.

According to an analysis of the EU data by Point Carbon, the German power sector is expected to emit 310 million metric tons of carbon dioxide in 2008. But emissions for the sector are capped at 236 million metric tons for 2008, meaning power companies like RWE and Eon AG will have to make major cuts to their emissions or buy carbon permits on the market. In previous years, power companies had more permits than they needed because of the design flaws in the scheme.

"We see the same picture all across Europe," said Henrik Hasselknippe, analyst at Point Carbon. "The power sector will have to reduce its emissions either by switching from burning coal to natural gas, building renewable energy, or by buying massive amounts of carbon credits."

For its part, RWE expects to have annual emissions of around 140 to 147 million metric tons of carbon dioxide from 2008 to 2012, but only anticipates being given 75 to 80 million tons worth of carbon permits. To make up the shortfall, RWE says it is upgrading its power plants, urging its customers to be more energy-efficient, starting a renewable-energy subsidiary and buying 18 million metric tons worth of carbon permits from projects done in the developing world. "We have an ambitious strategy," said an RWE official.

Write to Leila Abboud at leila.abboud@wsj.com¹

Posted by: oldasyoufeel on 4/6/2008 2:54:35 PM , 0 comments

Interesting

U.S. Records Surplus in January

WASHINGTON -- The U.S. federal government ran a monthly budget surplus of $17.84 billion in January, the Treasury Department said Tuesday.

Treasury's monthly budget statement shows the January surplus was 53% smaller than a surplus of $38.24 billion in January 2007.

Historically, January is a deficit month; Treasury said 34 of the last 53 Januarys had budget shortfalls. Treasury couldn't explain why a surplus occurred last month. In December 2007, the government had a surplus of $48.26 billion, which was unrevised.

Outlays were $237.38 billion during January, up 6.7% from January 2007's $222.37 billion. Government receipts in January were $255.22 billion, down 2.1% from January 2007's $260.61 billion.

The January surplus figure was bigger than the Congressional Budget Office's estimate of a surplus of $15 billion for the fourth month of fiscal year 2008, which began Oct. 1.

In the first four months of fiscal year 2008, the budget deficit totaled $87.70 billion, 108.0% bigger than the $42.17 billion deficit in the same period in fiscal year 2007. Fiscal year-to-date outlays were $949.13 billion, up 8.3% from $876.30 billion in the same period in the previous fiscal year, and revenue was $861.43 billion, 3.3% higher than $834.14 billion in the year-ago period.

January individual income tax receipts totaled $148.84 billion. Corporate taxes totaled $6.06 billion.

Last month, the government paid net interest on the federal debt of $22.78 billion. Net interest on the federal debt excludes interest paid on non-marketable government securities held by federal trust funds, such as Social Security.

The Treasury said it plans to release budget data for February on March 12.

Write to Jeff Bater at jeff.bater@dowjones.com¹

Posted by: oldasyoufeel on 2/14/2008 6:22:28 AM , 0 comments

Friday the 13th came on a Wednesday this month

Posted by: oldasyoufeel on 2/13/2008 8:48:10 AM , 0 comments

A Contrarian View

This was in the St. Louis Post Dispatch on 6/11/07.  Dr. Meyer spoke this afternoon at my LLI class.  I don't agree with his opinion on Wachovia, but he was very interesting.

In Warner Bros.' animated movie "Happy Feet," a penguin named Mumble hatches from his egg and starts dancing:

"Whatcha doin' there, boy?" asks his dad, Memphis.

Posted by: oldasyoufeel on 2/11/2008 6:17:31 PM , 0 comments

The Race Card

	January 28, 2008

REVIEW & OUTLOOK

DOW JONES REPRINTS This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: www.djreprints.com. • See a sample reprint in PDF format. • Order a reprint of this article now. The Clinton Race Gambit January 28, 2008; Page A14 About Bill Clinton, what can you say? Even before the polls closed in South Carolina on Saturday, the former President was diminishing Barack Obama's victory and trying to boost his wife in the next primaries by playing the race card. Asked by a reporter why it took "two" Clintons to beat Mr. Obama, Mr. Clinton replied that "Jesse Jackson won South Carolina" in 1984 and 1988. And he added that both Rev. Jackson and Mr. Obama had run "a good campaign here." Hmmm. The reporter hadn't mentioned Jesse Jackson, but Mr. Clinton somehow felt it apposite to refer to him anyway. He thus associated Mr. Obama's landslide victory with that of a black candidate who never did win the Democratic nomination, much less the Presidency, and who had run overtly as an African-American candidate in contrast to Mr. Obama's explicit campaign theme of transcending race. Anyone who thinks this was accidental has spent too much time with Sid Blumenthal. While Mr. Obama won a respectable 24% of white voters, according to Saturday's exit polls, Mrs. Clinton still won 36% and John Edwards 39% of the white vote. Mr. Obama won 78% of the black vote. The Clintons are now eager to make Mr. Obama into a Rev. Jackson-style "black candidate" as they contest primaries with a larger share of white and Hispanic voters than there were in South Carolina. The Clintons want to portray Mr. Obama as a candidate with a narrowly racial appeal, both to undermine his larger and inspirational message of "unity," and also to play to whatever doubts still exist about an African-American candidate among Democratic voters. It's going to be fascinating to see if Democrats and the press let the Clintons get away with this. Imagine if Mitt Romney had made the Jesse Jackson comparison. Democrats would have immediately denounced the remarks as "racist," or as a part of some Republican "Southern strategy." This primary contest has been a rolling revelation for many Democrats and the media, as they've been shocked to see the Clinton brand of divisive politics played against one of their own. Liberal columnists who long idolized the Clintons are even writing more-in-sorrow-than-anger pieces asking how Bill and Hillary could descend to such deceptive tactics. Allow us to answer that lament this way: Our readers aren't surprised.

Posted by: oldasyoufeel on 1/29/2008 7:11:43 AM , 0 comments

CAPITAL By DAVID WESSEL

A Source of Our Bubble Trouble January 17, 2008; Page A2 (See Corrections & Amplifications item below.) First came the bursting of the tech-stock bubble, now the bursting of the housing bubble. The bursting of a bubble in finance -- and the pay of those who helped make the tech and housing bubbles possible -- can't be far behind. And as painful as that will be for the Bentley/Rolls-Royce/Aston Martin/Ferrari dealership near the railroad station in Greenwich, Conn., the nation's hedge-fund capital, it might be good for the overall economy. Finance has had a remarkable run. It has been one of the fastest-growing industries in the U.S. (and Britain), and has attracted an increasing share of the country's, and the world's, talent. Today, roughly $1 in every $13 of employee compensation in the U.S. goes to those working in finance. The value added by finance -- a measure for calculating the industry's contribution to the economy -- rose to 4.4% of gross domestic product in 1977 from 2.3% in 1947, says Thomas Philippon, a finance professor at New York University's Stern School of Business. Its work force grew commensurately, with employees that were only slightly more educated than the typical American worker, and their compensation grew at roughly the same pace as that of other workers. After 1980, finance kept growing, reaching 7.7% of GDP by 2005. But the nature of the industry's work and work force changed. "From the 1980s onward, the financial sector grows by increasing the value added and compensation of its employees faster than in the rest of the economy," Mr. Philippon says. Workers in finance are increasingly highly skilled and educated. In short, there are fewer bank tellers and back-office clerks and more M.B.A.s, Ph.D.s and even M.D.s on Wall Street. In the 1960s and 1970s, graduates of Harvard University were much more likely to be lawyers, doctors and academics than to head for Wall Street. "Today, we see a huge shift of talent from elite schools toward finance," says Harvard economist Lawrence Katz, who, with colleague Claudia Goldin, recently surveyed 6,500 Harvard graduates from selected classes between 1969 and 1992.     About 15% of men who graduated from Harvard around 19 were working in finance 15 years after graduation, compared with about 5% of those who graduated around 1970. Among Harvard women, the share employed in finance increased to 3.4% from 2.3%. (Wall Street remains a man's world.) The trend toward finance appears to be accelerating. A survey of the Class of '07 last spring by the campus newspaper, the Harvard Crimson, found more than one-fifth of the men -- and about one-tenth of the women -- who took jobs, as opposed to going to graduate school or other pursuits, headed to investment banks. The lure is obvious. It's the money. Comparing graduates with similar SAT scores, grade-point averages, gender, age, occupation and everything else they can measure, Mr. Katz and Ms. Goldin find Harvard grads who work in finance earn 195% more than similar graduates in other careers, or triple the pay. That's no typo: Going into finance means making nearly three times as much as your classmates with other careers. In fact, pay on Wall Street and elsewhere in finance -- even more than those huge salaries of chief executives outside finance -- is a major driver of the widening gap between paychecks of the biggest winners in the economy and the rest of us. "Wall Street and legal professionals have contributed at least as much as, and probably more than, top executives of nonfinancial public companies to the widening of the income distribution," writes Steven Kaplan of the University of Chicago's Graduate School of Business. The top 25 hedge-fund managers combined earned more than CEOs of the Standard & Poor's 500 companies combined in 2004, he calculates. Modern finance is, truly, as powerful and innovative as modern science. More people own homes -- many of them still making their mortgage payments -- because mortgages were turned into securities sold around the globe. More workers enjoy stable jobs because finance shields their employers from the ups and downs of commodity prices. More genius inventors see dreams realized because of venture capital. More consumers get better, cheaper insurance or fatter retirement checks because of Wall Street wizardry. But financial innovation is like splitting the atom: Nuclear power offers energy without greenhouse gases, but nuclear weapons can blow up the planet. It all depends on how wisely it is used. Helping promising companies raise capital? Vital to U.S. prosperity. Devising, selling and trading mortgage-backed securities so complex that no one, even those Harvard grads, can fully understand them? Could be a waste of talent and energy. Yes, the Harvard-trained physician who helps venture capitalists pick among competing cures for cancer may help millions instead of the hundreds of patients he or she might have treated directly. But tens of billions of dollars of losses in new-fangled investments at the largest U.S. financial institutions -- and the belated realization that some of those Ph.D.-wielding, computer-enhanced geniuses were overconfident in the extreme -- strongly suggests some of the brainpower drawn to Wall Street would have been more productively employed elsewhere in the economy. And it looks like many of those folks will get the chance to find out if that is so. Write to David Wessel at capital@wsj.com4 Corrections & Amplifications: Graduates of Harvard University who go into finance earn 195% more than Harvard grads in other careers, or nearly triple the pay. This column incorrectly says they earn 195% of the pay of those who work elsewhere. In addition, the first name of Steven Kaplan of the University of Chicago's Graduate School of Business was misspelled as Stephen in an earlier version of this column.

Posted by: oldasyoufeel on 1/19/2008 9:38:35 AM , 0 comments

I think she's been reading my blog

Last night Madeleine Albright was at the St. Louis Speaker Series. I agreed with most of what she had to say. Among other things she spoke of the need for people who were militant in their moderation.

She has just published a new book that I need to add to my list and she is actively supporting Hillary.

There is a very good interview here.
http://paulharrisonline.blogspot.com/2008/01/madeleine-albright.html

Posted by: oldasyoufeel on 1/16/2008 9:35:05 AM , 0 comments

Friday the 13th

Posted by: oldasyoufeel on 1/13/2008 8:56:15 AM , 0 comments