So imagine if you will that you’re a small energy company. You’re thinking about building a wind farm, say, off the coast of Yorkshire. Problem is, you’re struggling to find investors to finance the project. Every time you talk to venture capital companies, private equity firms or other financiers, you get the same response. They’re worried about the risk – specifically, the risk of politicians lacking (how to put it?) lead in their pencil.
What, the investors ask you, happens if policy failure means that fossil prices stay low, so your wind farm can’t compete? Or, for that matter, if prices for emissions permits stay at rock bottom because government caves in to lobbying on permit allocation? What happens if the government simply misses all of its climate targets?
So maybe the investors agree to finance your project, but at punishing rates of interest. Or maybe they decide not to finance it at all. Either way, your energy firm and the government are stuck together in a vicious circle of self-fulfilling prophecy. The government can’t deliver its climatepolicy targets unless people like you build things like wind farms. But you can’t access capital at reasonable rates unless the investors are convinced that there’s a real future for what you want to build – and they figure that the government’s record of fudges kind of speaks for itself.
This is the kind of dilemma that David and talked about in our report on institutional architecture for climate change, where we argued that a key requirements for moving forward on climate policy was clearer signals from the future – whereby everyone believes that the low carbon economy is actually going to happen, and consequently acts in ways that deliver exactly that outcome.
Well, Michael Mainelli - a good friend of ours whom we worked with on the London Accord, which brought together a raft of investment banks in a collaborative research project on climate change – has come up with a delicious proposal that would in effect amount to just such a signal from the future. You’ll like this.
This little gem - spotted amid Iraq documents leaked to the Telegraph and apparently quoting one Colonel J.K. Tanner, chief of staff to the British general commanding a division in Iraq in 2003 and 2004 – is calculated to warm the cockles of Richard‘s heart (enthusiast for EU military operations that he is):
“I realise now that I am a European, not an American. We managed to get on better militarily and administratively with our European partners and indeed at times with the Arabs than with the Americans. Europeans chat to each other whereas dialogue is alien to the US military.
They need to reintroduce dialogue as a tool of command because, although it is easy to speak to Americans face-to-face and understand each other completely, dealing with them corporately is akin to dealing with a group of Martians. If it isn’t on the PowerPoint slide, it doesn’t happen.”
It echoes the words of US counter-insurgency expert William Lind in one of my favourite columns of his, from March 2007:
The U.S. military has carried the formal meeting’s uselessness to a new height with its unique cultural totem, the PowerPoint brief. Almost all business in the American armed forces is now done through such briefings. An Exalted High Wingwang, usually a general or an admiral, formally leads the brief, playing the role of the pointy-haired boss in Dilbert. Grand Wazoos from various satrapies occupy the first rows of seats. Behind them sit rank upon rank of field-grade horse-holders, flower-strewers and bung-holers, desperately striving to keep their eyelids open through yet another iteration of what they have seen countless times before.
The briefing format was devised to use form to conceal a lack of substance. PowerPoint, by reducing everything to bullets, goes one better. It makes coherent thought impossible. Bulletizing effectively makes every point equal in importance, which prevents any train of logic from developing. Thoughts are presented like so many horse apples, spread randomly on the road. After several hundred PowerPoint slides, the brains of all in attendance are in any case reduced to mush. Those in the back rows quietly pray for a suicide bomber to provide some diversion and end their ordeal.
When General Greg Newbold, USMC, was J-3 on the Joint Staff, he prohibited briefings in matters that ended at his level (those above him, of course, still wanted their briefs). Instead, he asked for conversations with people who actually knew the material, regardless of their rank. Five or ten minutes of knowledgeable, informal conversation accomplished far more than hours of formal briefing.
We’ve covered Blackwater a few times in the past here on GD, and when the founder of the firm was implicated in murder in two sworn depositions back in August, you might have thought that the firm’s star was waning. Not according to The Nation, though, which has just published a lengthy piece on what the company is up to in Pakistan:
At a covert forward operating base run by the US Joint Special Operations Command (JSOC) in the Pakistani port city of Karachi, members of an elite division of Blackwater are at the center of a secret program in which they plan targeted assassinations of suspected Taliban and Al Qaeda operatives, “snatch and grabs” of high-value targets and other sensitive action inside and outside Pakistan, an investigation by The Nation has found.
The Blackwater operatives also assist in gathering intelligence and help direct a secret US military drone bombing campaign that runs parallel to the well-documented CIA predator strikes, according to a well-placed source within the US military intelligence apparatus.
And if you liked that, you’ll love this:
Some of the Blackwater personnel, [the source] said, work undercover as aid workers. “Nobody even gives them a second thought.”
Read the whole thing.
Following the saga of hacked emails from the Hadley Climate Research Centre, the Anthropogenic Global Warming lobby has taken another body blow – with a new email coming to light this morning apparently containing the smoking gun that the Hadley emails lacked:
Sent: 29 October 2009
To: The Knights Carbonic
Gentlemen, the culmination of our great plan approaches fast. What the Master called “the ordering of men’s affairs by a transcendent world state, ordained by God and answerable to no man”, which we now know as Communist World Government, advances towards its climax at Copenhagen. For 185 years since the Master, known to the laity as Joseph Fourier, launched his scheme for world domination, the entire physical science community has been working towards this moment.
The early phases of the plan worked magnificently. First the Master’s initial thesis – that the release of infrared radiation is delayed by the atmosphere – had to be accepted by the scientific establishment. I will not bother you with details of the gold paid, the threats made and the blood spilt to achieve this end. But the result was the elimination of the naysayers and the disgrace or incarceration of the Master’s rivals. Within 35 years the 3rd Warden of the Grand Temple of the Knights Carbonic (our revered prophet John Tyndall) was able to “demonstrate” the Master’s thesis. Our control of physical science was by then so tight that no major objections were sustained.
More resistance was encountered (and swiftly dispatched) when we sought to install the 6th Warden (Svante Arrhenius) first as professor of physics at Stockholm University, then as rector. From this position he was able to project the Master’s second grand law – that the infrared radiation trapped in a planet’s atmosphere increases in line with the quantity of carbon dioxide the atmosphere contains. He and his followers (led by the Junior Warden Max Planck) were then able to adapt the entire canon of physical and chemical science to sustain the second law.
Then began the most hazardous task of all: our attempt to control the instrumental record. Securing the consent of the scientific establishment was a simple matter. But thermometers had by then become widely available, and amateur meteorologists were making their own readings. We needed to show a steady rise as industrialisation proceeded, but some of these unfortunates had other ideas. The global co-option of police and coroners required unprecedented resources, but so far we have been able to cover our tracks.
The FT’s Lex Column last week:
Like leaf blowers, commodity analysts seem pointless and full of hot air. Investors might have at least expected some respite when the resources bubble burst last May. In spite of buy recommendations across the board (if everyone in China bought a refrigerator, etc), the price of oil, copper and cotton halved. But it has taken less than a year for noise surrounding commodities to reach full volume again.
What is more, the worst economic slump in generations has done nothing to modify the bullish arguments of old. Commodity prices, apparently, will rise for ever on the back of rapid growth in emerging markets. The current rally may well have legs. But, just like last time, the fundamentals do not stack up.
Assume, for illustration, that the long-term supply of resources is more or less the same as before the crisis. That seems sensible…
Proposals to be unveiled [in a speech today by Conservative Shadow Chancellor of the Exchequer George Osborne] include a “green investment bank” designed to “spur economic growth by financing the next generation of British green technology companies”.
The Tories said the bank would be “similar” to state banks in Spain and Germany that back investment in strategically important sectors.
Financial Times, 23 November 2009
I suggest the UK sets up a British development bank in order to finance our shift to a zero carbon economy.
At the moment, we have several development institutions which finance clean-tech and renewables projects, such as the EIB, EBRD and World Bank, though they mainly finance them in emerging market countries, or in certain countries ear-marked by the EU as big receivers of renewable subsidies (Spain and Germany).
The UK needs its own institution to drive development of the green economy here. State-owned development banks have worked well in Asian economies, particularly for critical infrastructure projects which require long-term lending.
Jules Evans on Global Dashboard, 29 April 2009