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Hard to believe Japan hosted Kyoto protocol talks
June 11, 2009
While Washington's climate denialists have made way for a US presidency that is bringing far greater focus to greening the economy, on the opposite side of the world, US ally Japan appears to be going the other way.
Prime Minister Taro Aso yesterday announced a carbon emissions reduction target of 14 percent from 2005 levels, equating to emissions cuts of about 8 percent from 1990 levels.
More than a decade ago, Japan pledged a 6 percent cut by 2012, as outlined in the Kyoto protocol, which was signed in that nation's cultural capital. So the latest announcement represents barely a nudge in further emissions reductions until 2020.
Then again, a pledge does not amount to much if it is not honoured. Japan's emissions are currently about 6 percent above 1990 levels.
The developed world is being urged to take bold action that would to persuade developing economies to follow suit, but Japan has snubbed this call. Instead, it is favouring the interests of its powerful industrial lobby over, firstly, the wishes of six out of 10 Japanese to take stronger action on climate change (according to a recent poll) and, secondly, the interests of the poor in the developing world to limit rising average temperatures.
It seems to be taking a short-term attitude for an island nation that is itself threatened by rising sea levels.
Aso's stubborn stance perhaps reflects the dark side of the fact that the Copenhagen negotiations for a post-Kyoto deal on global warming later this year will come amid a global recession in much of the developed world.
The brighter side of the financial crisis for clean technologies has been the green emphasis in much of the economic stimulus packages put in place by developed countries.
Time to ruffle feathers
Annual general meetings (AGMs) in Ireland have become a little more exciting since the financial meltdown that speeded up the demise of the Celtic Tiger last year.
A few weeks ago a frustrated pensioner attending the AGM of Allied Irish Bank (AIB), one of the two largest in the country, decided things had gone beyond words and pelted the chairman with rotten eggs.
He was egged on - as it were - by the prospect of facing old age in near penury, as his very long-term investment in AIB shares had been just about wiped out.
The largest media group in Ireland, Independent News & Media (INM), never enjoyed the sort of blue chip status among investors as AIB had, so the INM board will likely be spared the egg embarrassment.
Nonetheless, the collapse of the INM share price will have caused much hardship to many shareholders. They will no doubt be extremely keen to know what progress has been made to secure the group's very precarious financing situation.
The reality, of course, is that in this particular case the AGM is just a sideshow to the real event, which is being played behind closed doors and includes only the group's financiers.
Whatever happens at tomorrow's AGM, it would probably be considerably more useful to shareholders if local investor activist Theo Botha were able to make an appearance. Irish institutional shareholders are appallingly inactive and seem to prefer a quiet existence.
Money is indeed power
The National Energy Regulator of SA (Nersa) will be doing us all a disservice if it does not make Eskom resubmit its application for a price increase with a thorough, transparent and in-depth justification for its call for a 34 percent hike.
From the two days of hearings at Nersa so far this week, it is clear that the power utility expects to use its application, submitted more than eight months late, to bulldoze through a hard-hitting increase in power prices.
Eskom's rocketing operating costs could point to the fact that management has simply lost control of them.
Such a possibility will indeed ultimately have the effect of pushing up power prices at a time of a recession.
Over the six years to March 2012, Eskom is forecasting its operating expenditure to increase on average by 32 percent a year - nearly four times the rate of consumer inflation - despite lower prices for both oil and coal.
Jacob Maroga, Eskom's chief executive, says the group's operating costs are increasing because of changes in the acquisition of coal and the much greater distances now required to transport the fuel to power stations. In other words, there is a coal management problem.
Maroga says Eskom delayed its application because it was trying to work out how to fund its expansion. However, he and his team should have secured all the funding they needed before he turned a single sod of earth to build any of Eskom's new power stations.
In the rush to build new capacity, Eskom appears to have failed to do its funding homework, implicitly assuming that the public would bail it out with substantial power tariff increases.
Without such funding, Maroga's new stations are going to end up incomplete - another tremendous waste.
The real reason for Eskom's delayed application is likely to be that it wanted to hold off until after the elections, thus avoiding the political consequence of a large power tariff increase. Eskom applied to Nersa on May 5, 13 days after election day.
Mthobeli Kolisa, the executive director of infrastructure services at the SA Local Government Association, said on Tuesday that the delay in Eskom's application had raised concern that a "chaotic and incoherent approach" was the norm for the electricity sector.
The late application caused havoc with the budgetary processes of the 187 municipalities, which consume 40 percent of Eskom's power.
Edited by Peter DeIonno. With contributions by Ingi Salgado, Ann Crotty and Justin Brown
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