NC Media Watch

Let me respectfully disagree - it is our problem.

Russ Steele

Mike McDaniel has taken the lead in discussing unfunded public employees unfunded liabilities and has an excellent post at CABPRO Report on the Solution to Public Employee Pension Plan Crisis. He points to Sacramento for solutions, re-enforcing the position that it is Sacramento's problem, and the solutions will have to come from State and Federal officials.

Since Mike is the expert I will have to agree. However is this really just Sacramento's problem? I think it is our problem. As taxpayers we are on the hook for those unfunded liabilities according to an article in the Wall Street Journal: More Pain for State's Taxpayers, Cities

Other local officials said Calpers's losses would ultimately have to be covered by the taxpayer. "I think the taxpayers are going to be footing the bill for years because of less-than-stellar decisions on investments," said Brett Barbre, a director with the Municipal Water District of Orange County, whose employees' pensions are with Calpers. "This is going to affect every city, county and special district that is in Calpers. They will have to cover all of the losses, as well as the ancillary issues that are being uncovered."

It is our problem because we let our local elected official raise benefits with out understanding the long term consequences when CalPERS was was flush with cash and charging low rates.  I am not sure that most citizen were even aware to the actions and would not have understood the complexity of the CalPERs system it they had take then the time to investigate. I took several sessions with George Foster, who was on the Nevada City Finance Committee, before I understood the long term consequences of just bumping up the benefits a half a precent and the process of spiking retirement benefits. 

It is our problem because we are going to be responsible for changing the politics in Sacramento. The current political class in Sacramento is under the control of the government employee unions, and are not going to make changes that impact their re-election revenue sources. Until the citizens of California retake control of our government, nothing is going to change, we will continue to be responsible for the uncovered losses. 

This is an economic crisis that is going to payout on our watch, and it time to start paying attention. Mike has some excellent input on the SESF Blog here, here and here. George Rebane will be discussing the issue in his Union column next Saturday. 

Exit question: What were those "less-than-stellar decisions on investments?" Could a lot of it be  those Green Investments that that CalPERs made in 2008? As I recall the green energy indexes crashed much faster that the other stock market indexes during our current economic crisis, and the green indexes are still struggling to recover. (www.nexindex.com)

Is going green a good investment?

Russ Steele

We have discuss the economic opportunities of going green here, mainly in the comments section on this blog, many times. My position is that going green can be a risky investment strategy, especially if it is based only on reducing greenhouse gases to lower the global temperature. What happens when the temperatures go down, like they are now, without any major reductions in greenhouse gases? What happens to the green investment?

Philip Stott, at Global Warming Politics points out that green companies focusing on climate change have seen their stocks slide much faster than indexes covering a broader sets of stocks. The Wilder Hill New Energy Global Innovation Index, 91 companies listed on 24 stock exchanges, is known as the NEX is an indicator to green investment.

Graphic

Philip Stott writes:

In these dark days, the NEX is not having a happy ride, and, according to the latest report in the Scientific American [’Climate change stocks fall more than wider markets’, Scientific American, October 3], “shares in companies specializing in curbing greenhouse gas emissions, including energy efficiency and renewable energy technologies, have tumbled faster than wider markets this year.” Figures for the last full quarter (June 30 to September 30) show that they fell by 30.3%, and that they are down by as much as 39% over the year so far.

No telling where they are today with even lower market.  When people are cold and hungry they are not going to be investing in green companies that are reducing CO2 to lower the earth temperature even more.  I would if investors are watching the global temperatures, as well as stock market indexes, and have decided that going green has a much higher investment risk than more traditional stocks. 

You can read the rest of the story here.

h/t to Benny Pieser and ICECAP

ERC Question #10: What suggestions do you have for improving communications from the ERC?

The ERC needs to elevate it’s profile in the community as a visionary leader. The Loma Rica Business Park survey revealed that many business did not know the ERC existed, and it they were aware it existed what it’s purpose was. Ask anyone on the street, what is the value of the ERC?  “What’s the ERC,” will most likely be the response. That has to change. 

This community is in desperate need of a vision of what it wants to be in ten years.  Even that time frame my be too long, given the current rate of change. Think back ten years, what was the big technology, what was the next great thing on the horizon.  Nevada County did not get dial up slow speed Internet until 1995, just 12 years ago. Limited DSL arrived in 2000, cable broadband in 2005. All the emerging business that need broadband still do not have access.  Yet, in a flat world every business needs to be part of a collaborative global network. The Internet has changed how business is done in just ten years.

Grass Valley is on the verge of approving some of the SDAs with out a clear vision what kind of industrial and business parks the community will need over the next ten years. In a flat world, it may not be the same kind built over the last ten years, they certainly need fiber optic broadband access. Lacking a vision of what businesses infrastructure will be needed over the next ten years, we are more likely to get more of the same because the City Council lacks a vision of what is needed.  I think it is the ERC responsibility to define that vision for the City Council.  Not as a single enterprise, but as the leader of community group to define where our local industrial base needs to be in ten years.

Is “cap and trade” good for our local economy?

Russ Steele

I will be giving a presentation on the cost global warming regulation at the April CABPRO Luncheon on the 18th, at the National Hotel in Nevada City. Details here. My research has produced some interesting finds, including this from the Washington Post this morning.

As U.S. lawmakers work on the details of their greenhouse-gas legislation, they are looking carefully at Europe's experience. Five Senate proposals all use the same basic approach, known as "cap and trade," that Europe has used for the past two years. But what the snappy name "cap and trade" means is that the market will put a price on something that's always been free: the right of a factory to emit carbon gases. That could affect the cost of everything from windowpanes to airline tickets to electricity.

Europe has already hit a few bumps with its program. There's the Dutch silicon carbide maker that calls itself the greenest such plant in the world, but now can't afford to run full-time; the French cement workers who fear they're going to lose jobs to Morocco, which doesn't have to meet the European guidelines; and the German homeowners who pay 25 percent more for electricity than they did before -- even as their utility companies earn record profits.

Complete story here.

All the European countries are worried their products will not longer be competitive under "cap and trade" regulations.  Can this happen in California, in Nevada County?  Ask Lowell Robinson about the impact current environmential regulation are having on his business, details in January CABPRO Newsletter here.

Regardless of your business, the cost of energy will go up in California, while PG&E profits soar. PG&E is on the record, they support California’s cap and trade legislation, reporting "cap and trade" is good for their business.  The question is, is it good for your business?

Risky action by Governor to save EU Carbon Trading Market

Russ Steele

The UK Carbon Trading Market collapsed, with the credits dropping to almost zero. Now the Governor wants to link California’s economy to a collapsed emissions trading system.

California hopes to link its planned emissions trading system to the European Union's market, boosting efforts to build a global mechanism to fight climate change, aides to Governor Arnold Schwarzenegger said on Thursday. Details here.

The ETS market soared to 30 Euros per ton when it first opened in 2006. It is now a 1.3 Euros per ton.  The last trade was on 7 December 2006. Not an active market. One analyst thinks that US entry in to the ETS market will save it.  So, now California is coming to the rescue of a failed EU Carbon Trading. In an earlier post we revealed that PERS was planning on investing in the carbon market.  Would you be ready to invest your PERS retirement in a failed carbon trading system?   Really?

UPDATE: The EU is hoping California will save their failed carbon trading scheme. This from Planet Arc.

The most populous US state, California passed last year the first significant law in the United States to curb emissions of greenhouse gases, a move Europeans hope will pre-empt national US action.

"We're looking to be a model for the United States, which is also what the Europeans are hoping," said Linda Adams, secretary of the California Environmental Protection Agency, after meeting EU and European state officials on a fact-finding trip.

"There's a sense of urgency in Europe."

Peak oil update

Russ Steele

With a major oil discovery in the Gulf of Mexico peak oil seems to be slipping into the future, beyond 2070 by one estimate.  New deep water drilling technology is opening more ocean for exploration.  It is time for the local peak oilers to take another look at their reason for existance. 

World has tapped just 18 percent of global oil supplies, Saudi executive says
By Associated Press
Wednesday, September 13, 200

VIENNA, Austria - The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.

World oil not running out, says energy boss
By Tim Dornin
September 11, 2006 01:39pm
Article from: AAP

The world has an abundant supply of oil, and high petrol prices are just the reality of a globally traded commodity, ExxonMobil Australia chairman Mark Nolan said today.

Global warming over the next twenty years will open up more of the Arctic Ocean for exploration, with less ice and more open water.  This is an attractive area for oil and gas, given the geology of the region.  One of the positive aspects of global warming, besides two more months a year of golfing in Canada.