This is a fascinating article, and huge.
The idea is that — worldwide — stocks based on carbon reserves are essentially a multi-trillion dollar bubble, because they cannot actually ever be burned (if they are burned it’s — as James Hansen has said — “game over for Planet Earth”).
The bubble is real only if carbon reserves are “unburnable,” and the argument for why they are unburnable is essentially the argument being made by the carbon divestment (“Do The Math”) campaign led by Bill McKibben, Naomi Klein, and millions of climate activists.
It comes down to this: EITHER the carbon reserves (and thus stocks) of energy companies have full value OR civilization on Earth has a viable future. Up until reading this article, I was betting on the energy companies and not holding much hope for the Earth (which is absurd, of course).
I find this a very hopeful development (for the planet, but not for the markets).
This is a grim development for financial markets.
Hold on to your hats, a disturbance in the force may be coming soon to a planet near you.
By Damian Carrington, The Guardian
Thursday, April 18, 2013 20:11 EDT
The world could be heading for a major economic crisis as stock markets inflate an investment bubble in fossil fuels to the tune of trillions of dollars, according to leading economists.
“The financial crisis has shown what happens when risks accumulate unnoticed,” said Lord (Nicholas) Stern, a professor at the London School of Economics. He said the risk was “very big indeed” and that almost all investors and regulators were failing to address it.
The so-called “carbon bubble” is the result of an over-valuation of oil, coal and gas reserves held by fossil fuel companies. According to a report published on Friday, at least two-thirds of these reserves will have to remain underground if the world is to meet existing internationally agreed targets to avoid the threshold for “dangerous” climate change. If the agreements hold, these reserves will be in effect unburnable and so worthless – leading to massive market losses. But the stock markets are betting on countries’ inaction on climate change.
Read the full article here.
When the subject of revenue increases comes up, Republicans usually complain that the United States is among the most highly taxed country in the world, and that taxes must be lowered.
Here’s a graph — from a report by Citizens for Tax Justice — that proves that the US bears nearly the lowest tax “burden” among OECD countries..
The US is third from the bottom in this graph. Only Chile and Mexico have a lower rate, measured as the total of local, state and federal taxes as a percentage of GDP.
Young farmers in Scarborough, Maine can’t afford to buy land, so they lease it from the Scarborough Land Trust.
Could that model work here in Nevada County, California?
Paul Krugman has a fascinating op-ed in yesterday’s NY Times. In it, he recounts some of the litany of conservative alarms about liberalism sinking California’s economy. Krugman argues convincingly that the truth is quite the opposite: California’s worst problems over the decades have often been connected to conservative greed and obstructionism (my terms).
A dozen years ago, the state was supposedly doomed by all its environmentalists. You see, the eco-freaks were blocking power plants, and the result was crippling blackouts and soaring power prices. “The country’s showcase state,” gloated The Wall Street Journal, “has come to look like a hapless banana republic.”
But a funny thing happened on the road to collapse: it turned out that the main culprit in the electricity crisis was deregulation, which opened the door for ruthless market manipulation. When the market manipulation went away, so did the blackouts.
Krugman sees in the confluence of the state’s leftward political shift and the GOP’s rightwing meltdown (and consequent loss of influence) the glimmering of hope that California can have effective (non-gridlocked) government once again:
Reports of the state’s demise proved premature. Unemployment in California remains high, but it’s coming down — and there’s a projected budget surplus, in part because the implosion of the state’s Republican Party finally gave Democrats a big enough political advantage to push through some desperately needed tax increases. Far from presiding over a Greek-style crisis, Gov. Jerry Brown is proclaiming a comeback.
Needless to say, the usual suspects are still predicting doom — this time from the very tax hikes that are closing the budget gap, which they say will cause millionaires and businesses to flee the state. Well, maybe — but serious studies have found very little evidence either that tax hikes cause lots of wealthy people to move or that state taxes have any significant impact on growth.
Read Krugman’s complete op-ed here –> “Lessons From a Comeback“
Journalism Professor Lee Banville asks whether Facebook has “jumped the shark?”
He quotes Eric Schmidt: “Every two days, we create as much information as we did from the dawn of civilization up until 2003.”
Here are a couple of other factoids Banville mentions to give an idea of the explosive growth of information on the Internet:
“Every minute 48 hours of video is uploaded to YouTube.”
“Every minute 2 million people search Google for something”
In the sphere of the Internet, Banville observes, there are about four titanic “gatekeepers:” Google, Amazon, Facebook and Apple (iTunes).
Most of those gatekeepers have various ways to make money.
Banville, in this short video, explains why Facebook has only one way to make money, and why, since it went public, it will be under continuing pressure to increase its profit year after year.