Primary Sources

Primary Sources: "Reverse Psychology

Does antismoking advertising work? Not if it’s funded by tobacco companies, argues a new study that examines three such ad campaigns. The authors found that, on average, each additional youth-targeted prevention ad that a young person saw was associated with a 3 percent stronger intention to smoke at some point in the future. Exposure to prevention ads targeted at parents, meanwhile—like the Philip Morris campaign urging parents to “Talk. They’ll Listen.”—made older teens less likely to perceive smoking as harmful, more likely to approve of smoking, and more likely to plan to smoke in the future. In these ads, the authors note, “no reason beyond simply being a teenager is offered” to explain why kids shouldn’t smoke, which dovetails with Philip Morris’s stated aim of delaying smoking, not preventing it."

Primary Sources

Primary Sources: "The Bovine Menace

Forget SUVs and tractor-trailers—the world’s livestock play a larger role in global warming than all of our planes, trains, and automobiles combined, according to a report from the Livestock, Environment and Development Initiative (LEAD), an organization that promotes “ecologically sustainable livestock production systems.” Between the deforestation that’s necessary to create grazing lands, the fossil fuels required to manufacture fertilizer for the crops that feed the world’s growing livestock population, and the gases released by animal manure, livestock are responsible for 18 percent of greenhouse-gas emissions worldwide. The good news: There are ways to reduce these emissions, including more efficient feed production, improved soil conservation, and a better diet for all those gassy cows. Given that the global production of meat and milk is on track to double by 2050, livestock’s current environmental impact would need to be cut in half just to stay within the present level of damage to the global ecosystem."

The Ten-Cent Solution

The Ten-Cent Solution by Clive Crook
How private schools are providing much better education than government run schools to poor kids at lower cost.

Excerpts :
In Hyderabad, a city of more than 6 million people, Tooley and his team—confining their search to poor areas lacking amenities such as running water, electricity, and paved roads—counted 918 schools. Only about 40 percent were run or financed by the government; 60 percent were private. Of those, some were “recognized” by the government, but most were officially unknown to the authorities. These black-market private schools were smaller on average than the other kinds—but they still accounted for about a quarter of all the children in any sort of school. Remarkably, some of the slots in these private slum schools were offered free or at reduced rates: The parents of full-fee students, desperately poor themselves, willingly subsidized those in direst need.

This flourishing educational enterprise is all the more surprising once you understand that India has deliberately discriminated against private education—forbidding for-profit schools, for instance, and requiring schools to be run as trusts rather than proprietorships, and limiting their ability to borrow. Despite these handicaps, private education for the very poor has evidently thrived.

After comparing test scores for literacy and basic math, Tooley has shown that pupils in private schools do better than their state-school equivalents—at between a half and a quarter of the per-pupil teacher cost.

FT.com / Columnists / John Kay - Why poker can beat investment management hands down

FT.com / Columnists / John Kay - Why poker can beat investment management hands down
Luck and skill in life and investment management

FT.com / MARKETS / Commodities - Carbon trading clean up promised by EU

FT.com / MARKETS / Commodities - Carbon trading clean up promised by EU

FT.com / Comment & analysis / Columnists - In spite of sceptics, it is worth reducing climate risk

FT.com / Comment & analysis / Columnists - In spite of sceptics, it is worth reducing climate risk

Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare - New York Times

Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare - New York Times
When good intentions go bad.

Someone May Be Gaining on Us - Barron's Online

Someone May Be Gaining on Us - Barron's Online By HAROLD L. SIRKIN

Highlights :

All together in 2004, the 100 companies from rapidly developing economies (RDE) accounted for $715 billion in revenue (the total should hit $1 trillion this year) and $145 billion in operating profit. That produced a 20% profit margin, compared with 16% for companies in the Standard & Poor's 500, 10% for those in Japan's Nikkei and 9% for those in Germany's DAX.

Some 28% of the RDE 100's revenue, about $200 billion in 2004, came from international sales. The companies grew 24% a year from 2000 through 2004, which is 10 times faster than the U.S. gross domestic product, 24 times Japan's rate of growth and 34 times Germany's.

The challengers know how to market and sell profitably to low-income customers. They know how to deal with immature logistics and distribution networks. They know how to navigate ambiguous legal environments. They know how to manage successfully, despite shortages of management talent. And, in most cases, they have developed the ability to innovate quickly and make very rapid decisions. These qualities -- as much as the well-documented advantages they enjoy as a result of significantly lower labor, capital and raw-material costs -- will serve them well as they look beyond their home markets and prepare to go head- to-head with current leaders.

Cycling Into a Big Year for Tech Stocks - Barron's Online

Cycling Into a Big Year for Tech Stocks - Barron's Online
An interview with Michael Cahill. He launched a global technology, telecommunications and media fund for $4.5 billion Manhattan-based Chilton Investment in 2000, he's delivered returns of 119% net of fees, compared with a loss of 45% in the Nasdaq in the same span. Last year, his smart stock picking led to gains of 22.65% after fees. He accomplished that feat with a risk-averse 55% exposure to the market.

Highlights of the interview :
Big themes for the coming years :
1. Vista
2. Videogame Consoles ( Wii, PS3, XBox360)
3. 3G, Wi-Fi 802.11n, WiMAX
4. Video-on-demand over the Internet
5. Increasing Bandwidth demand
6. Solar Industry
7. Anadigics - supplier for Qualcomm 3G phones, Intel for Wi-Fi and WiMAX chip sets, chips for Cisco's Scientific-Atlanta, chips for set-top boxes of Motorola. 45.2 million outstanding shares, trading at $9 a share, $400m market cap, $1 a share of net cash, estimated earnings - 50c in 2007, 90c to $1 a share in 2008, it was break-even in 2006. 60% of all announced 3G phones have Anadigics chips, company will be helped by a move to 802.11n and WiMAX. Expect a new share offering to bolster their balance sheet (customers are asking for it as they need more supply). Expect a top-line growth of 30%. Currently trading at 9 times, earnings are increasing, multiple of 15-20 is possible.
8. EchoStar Communications - trading at 7.7 times 07 EBITDA and 6.7 times 08 EBITDA. Ebitda growth 18% in 07 and 15% in 08. $2.50 free cash flow per share in 07. Current share price $40. 3000,000 new subscribers in Sept compared to 165000 new subscribers for DirectTV. Expect an appreciation of 20% in the stock over the next year. Expect a buyout from AT&T or DirectTV.
9. Cable and Phone companies - Main theme is again broadband. Cable companies need to upgrade from 750 MHz to 1GHz. AT&T and Verizon - push on fiber-to-the-home. But fiber strategy is slow. Meanwhile cable is cutting into the Telco base. AT&T can solve this problem by buying EchoStar - adding 13 million subscribers. There are some more benefits - this acquisition frees their fiber for internet usage only. They can give better video on internet over this fiber, and TV (including Hi-Def) over satellite. This acquisition will not raise any ire from regulators and it will not dilute AT&T market share value also. DirectTV will have hard time overcoming these issues if it wants to acquire EchoStar.
10. Solar - main problem is shortage of polysilicon. Polysilicon is a critical component in solar cells. MEMC (WFR) is a leading producer of polysilicon. 230m outstanding shares, trading at $52 a share, $12b market cap, $2.04 earning per share (up from 1.14 in 2005), $2.40 a share in net cash, $600 m in cash, expect earning at $3 a share in 2007, $4 in 2008, stock is at 17 times 07 earnings and 13 times 08 earnings, growth at 45% in 07 and 33% in 08. Share is trading at discount to the semiconductor industry and its growth rate. Historically it has been very volatile. Expect a downturn in the coming months in the industry (semiconductor). But expect MEMC to grow during this downturn. It is a less volatile share now.

Wal-Mart Wants Suppliers, Workers to Join Green Effort - WSJ.com

Wal-Mart Wants Suppliers, Workers to Join Green Effort - WSJ.com
Excerpts:
Wal-Mart Stores Inc. Chief Executive Lee Scott called on the retailing giant's suppliers and employees to aid its green campaign, including a request that suppliers eventually eliminate nonrenewable energy from their processes and products.
But Mr. Scott's remarks yesterday in London marked Wal-Mart's first formal call for suppliers to decrease their use of nonrenewable energy such as that generated by burning coal or gas. Wal-Mart pledges to eventually power its operations entirely with renewable energy sources such as wind and solar energy.

Mr. Scott issued the call while introducing a campaign he christened "Sustainability 360." In another aspect of the campaign, Wal-Mart will ask its 1.35 million U.S. employees this year to make commitments of their own, such as biking to work or encouraging friends to buy energy-efficient light bulbs.

Among the initiatives Mr. Scott outlined, prodding suppliers off nonrenewable energy could have the largest commercial ramifications. Wal-Mart, with an estimated $350 billion in sales last year, buys goods from more than 60,000 suppliers globally.

Some suppliers, such as General Electric Co., already are working with Wal-Mart to promote products such as energy-efficient light bulbs. Osram Sylvania, a unit of Siemens AG, produces 30 types of energy-efficient, compact fluorescent light bulbs.

FT.com / Comment & analysis / Editorial comment - We need a clear and predictable price for carbon

FT.com / Comment & analysis / Editorial comment - We need a clear and predictable price for carbon

Excerpts :
Adaptation is going to be part of the response, not least because a substantial rise in temperatures is already on the way: the stock of greenhouse gases in the atmosphere is already 50 per cent above pre-industrial levels. But it is also essential to mitigate growth in the stock, ideally to keep it below 550 parts per million, which would still be double the pre-industrial levels.
On present trends, the atmosphere is likely to reach such a concentration in just three decades. To prevent levels rising further, emissions will need to be reduced to at least 50 per cent below what Sir Nicholas Stern called “business as usual” – that is, the continuation of historic trends – by then.
For this reason, the world – and business, above all – needs a predictable and effective replacement for the Kyoto protocol, which expires in 2012. If this is to happen, negotiations will need to be completed by 2010, so progress this year, particularly in discussions between the leading high-income countries and five significant developing countries (Brazil, China, India, Mexico and South Africa) is essential.
The way forward is a framework that compensates developing countries for the costs they bear, but also encourages the most efficient possible use of energy resources. The buying of rights to emit by high-income countries from developing countries is one way to achieve this result. A common tax regime, with accompanying cross- border transfers, would be another.

The crucial requirements, however, are three: a clear and predictable price for carbon emissions across the world; much increased investment in research and development in renewables, nuclear power and carbon capture and storage; and arrangements for transfer of best technology across the globe.

This is a huge, long-term and global challenge that involves difficult questions of justice both within and across generations. Humanity’s ability to address it is a test of its capacity to manage the consequences of its own actions. So far it has failed. It can afford to do so no longer.

Stern Report

Stern Report

FT.com / In depth - Senators to host climate change talks

FT.com / In depth - Senators to host climate change talks

FT.com / In depth - A warmer world is ripe for conflict and danger

FT.com / In depth - A warmer world is ripe for conflict and danger
Excerpts :
“Picture Japan, suffering from flooding along its coastal cities and contamination of its fresh water supply, eyeing Russia’s Sakhalin Island oil and gas reserves as an energy source...Envision Pakistan, India and China – all armed with nuclear weapons – skirmishing at their borders over refugees, access to shared river and arable land.”
It is from a Pentagon memo on the possible consequences of global warming.
Oxfam predicts 30m more people could be at risk of famine as a result of global warming.
The demand for essential resources could exacerbate tensions within countries.
A contributing factor to the conflict in Darfur has been a change in rainfall that pitted nomadic herders against settled farmers.
Creeping environmental deterioration already displaces 10m people a year. This could rise to 50m by 2010. Movements like this will have a huge impact on worldwide immigration patterns.
China’s economy is dependent on Himalayan glaciers to feed its southern rivers. But rising temperatures are now causing these glaciers to melt at an alarming rate.
In America, Hurricane Katrina turned New Orleans from a stable, wealthy and vibrant city into a wasteland in the space of a few days. In the UK, the Thames barrier, designed to be raised once every six years, is now being raised six times a year. Just one big flood would cost £30bn, or 2 per cent of UK gross domestic product.
We need to take action to prevent it, rather than just mitigate its effects. But, at the same time, politicians have a duty to prepare for its consequences in terms of domestic and international security.
Action means the UK needs a climate change bill with annual binding targets for emissions.
Only annual targets will create an economic price for carbon and encourage us to diversify our energy sources.
Using more renewable energy sources will also make our energy supplies more secure. By 2020, 90 per cent of UK energy will be supplied from abroad, leaving us vulnerable to political pressure. Reducing our reliance on oil and gas will help fight climate change and reinforce our security.
Showing leadership domestically also builds the trust necessary to get diplomatic agreement abroad – underpinned by a new global emissions authority. Sceptics who argue that the likes of China and the US would never agree misunderstand how energy security is already influencing their policies.
China, a resource-poor country, recently set a goal of doubling the use of alternative sources of energy. President George W. Bush last year promised a 22 per cent rise in US government clean energy funding to help end what he called the country’s “addiction to oil”.

Preparing for the consequences of climate change means we must re-evaluate our policies. We need a sharper focus on preventing and addressing climate change in the developing world. We must also examine potential areas of conflict caused by climate changes in planning defence policies.

As early as 1971, Richard Falk argued that environmental change was a security issue and outlined his “first law of ecological politics”: the faster the rate of change, the less time to adapt, the more dangerous the impact will be.

FT.com / In depth - American businesses must play leading role

FT.com / In depth - American businesses must play leading role
Excerpts :
Corporate America worries that regulations at the state level – such as those emerging in California and New York amid the policy vacuum in Washington – will create an expensive obstacle course of inconsistent laws. Business executives also fear that, if the Democrats win both the presidency and Congress in 2008, companies will face heavy-handed federal regulation. They want to pre-empt that possibility with their own ideas now or they want to be at the table when the big decisions are made.
The behaviour of big companies in the 1950s could serve as a model. At that time, many corporations such as Eastman Kodak and R.H. Macy banded together in what was called the Committee on Economic Development. They worked with Washington to devise stable monetary and fiscal policies, job creation programmes, educational opportunities and the first foreign aid programmes. It was an unprecedented effort by US business to work with government on pragmatic solutions to massive postwar problems.
US companies could be realising that today’s public policy challenges will overwhelm them if left unaddressed and that business itself can make a major contribution to meeting these challenges.

Finally, chief executives such as GE’s Jeff Immelt, IBM’s Sam Palmisano and many of their colleagues may well represent a new breed of leader. They are riveted on competitive performance and shareholder value, to be sure. However, they are also focused on strengthening the national and global policy frameworks so vital to their success. It was Mr Immelt who cried out for clear environmental regulations two years ago. Mr Palmisano has been vocal about education and innovation.

It is too soon to say that corporate America is embarking on a more assertive and constructive involvement in public policy but, for the first time in many years, the possibility exists

FT.com / In depth - Companies must adapt or die in a changing climate

FT.com / In depth - Companies must adapt or die in a changing climate
Excerpts :
A middle-of-the-road view is that rising temperatures have already started to alter earth’s climate. Effects will depend on the degree and speed of adaptation of countries, economies and people, and differ by region.
Likely effects include: melting of glaciers and ice caps; higher sea levels; more frequent and violent weather events; and degradation of water resources. Sectors likely to be particularly affected include: utilities; integrated oil and gas; mining and metals; insurance; building and construction; and property.
Such developments will probably evolve over decades. In planning, therefore, companies will regard climate change as the same sort of slow-moving but powerful force as globalisation, technical change and population ageing – forces that slowly but inexorably shape the economic environment.
Climate change may cause the economic environment to alter more suddenly, particularly when government policy responds to the perceived threat. A change in greenhouse gas regulations on utilities, fuel economy standards for vehicles, airline taxes or building regulations can immediately affect companies’ profitability and prospects. They will therefore want, at a minimum, insights not only into how climate change will affect business, but also into how policy is likely to affect it. Not surprisingly, some companies will want to shape that policy.
Most economists would wish to see the price system – the principal mechanism by which resources are allocated in a market economy – at the centre of emissions reduction policy, whether through taxation of carbon or the selling of emission permits. But there is a place for regulations and standards policies also, provided that the resulting implicit cost of abatement is reasonably uniform across sectors and economies and acceptably close to the value of the damage avoided.
We see a greater than 50 per cent likelihood that some sort of global emissions trading system, covering many of the most important sectors, will be in place in five years’ time. But a somewhat motley mixture of policies is likely to continue also.

FT.com / In depth - Sydney heat deaths to soar by 2050

FT.com / In depth - Sydney heat deaths to soar by 2050
Excerpts :
Climate change and the soaring temperatures it is expected to bring to Sydney will cause a considerable rise in heat-related deaths among the elderly, according to a report released on Wednesday.
The report forecasts that maximum temperatures in the city would rise as much as 1.6C by 2030 and 4.8ºC by 2070. In comparison, average temperatures in Australia climbed just 0.9ºC between 1910 and 2004, according to the CSIRO. Expectation of 40 percent drop in rainfall and rise in bushfires.
Large cities needed to implement more efficient early warning mechanisms and emergency response systems to deal with the increasing probability of heatwaves and help protect vulnerable citizens, in particular the elderly.

FT.com / In depth - Bangladesh plight serves as warning to world

FT.com / In depth - Bangladesh plight serves as warning to world
Excerpts :
Most parts of Bangladesh are less than 10m above sea level, so rising seas coupled with storm surges could put large parts of the population and agricultural land under threat of severe flooding.
South and east Asia, including Vietnam, Bangladesh, India and parts of China, including Shanghai, will be most vulnerable to climate change because of their large coastal populations in low-lying areas, according to the UK International Institute for Environment and Development.
Poor countries, which consume little energy per capita relative to developed countries, have historically played the smallest role in producing carbon emissions.
The average Briton, for example, produces 48 times more carbon dioxide than someone living in Bangladesh. India’s per capita annual energy consumption was just 594 kWh in 2003 compared with 14,057 kWh in the US.
But India, Bangladesh and other countries in the region, face some of the biggest threats, including melting glaciers and more severe storms, floods and droughts caused by depletion of ­glacier-fed rivers. Rising sea levels and warmer temperatures would also fuel malaria and other diseases.
Melting glaciers would increase flood risk during the wet season and sharply reduce water during the dry season to one-sixth of the world’s population living mainly in the Indian sub-continent, parts of China and the Andes in South America.
The impact on India’s agriculture, which supports 70 per cent of its population and relies on monsoon rains, would be severe. “Clearly this has global implications. Foodstocks worldwide will be under pressure,” said Mr Pachauri.
While India has a natural annual monsoon season, heavy rains in central India between 1981 and 2000 were more intense and frequent than in previous decades. “A substantial increase in hazards related to heavy rain is expected over central India in the future,” wrote a team of scientists led by B.N. Goswami of the Indian Institute of Tropical Meteorology in the December issue of the journal Science.

FT.com / In depth - Climate change will spark extreme weather

FT.com / In depth - Climate change will spark extreme weather
Excerpts :
The world has warmed by about 0.74°C in the last 100 years, and will warm a further 0.2°C per decade for the next two decades.
The IPCC said its “best estimate” was that temperatures would increase by 3°C by the end of the century, if carbon dioxide levels continue to rise as predicted.
Other studies have found that such a temperature rise would result in serious water shortages for billions of people, lower crop yields, the spread of tropical diseases and the mass migration of people, mainly in developing countries, away from the worst affected areas.
Temperatures could rise even higher, by 4°C, if “feedback” effects take place. One such effect would be if thawing Siberian permafrost releases large quantities of methane, a greenhouse gas more potent than carbon dioxide.
Another possibility feared by many scientists is that rising temperatures and drought could cause the Amazon rainforest to die. If that were to happen, the vast forest would turn from absorbing carbon from the atmosphere as it does at present to producing carbon dioxide.
The report noted that “the last time the polar regions were significantly warmer than present for an extended period (about 125,000 years ago), reductions in polar ice volume led to four to six metres of sea level rise.”
However, Peter Stott of the UK’s Met Office said although Arctic ice was disappearing, the melting of the massive Greenland ice sheet could take “thousands of years”. Accordingly, the IPCC estimates a sea level rise of between 18 centimetres and 59 centimetres by 2100, compared with the average between 1980 and 1999. But these estimates do not take account of possible feedback effects.

Intergovernmental Panel on Climate Change

Intergovernmental Panel on Climate Change

New UN report on global warming

The assessment states that there is a 90% chance that global warming is caused by humans, according to a person familiar with the document. The new report also says a doubling of greenhouse gases will likely raise the planet's temperature by more than two degrees Centigrade, at a minimum. The assessment states that human activity is leading to warmer oceans, which in turn is likely to give rise to more intense and damaging hurricanes.

Excerpted form wsj.com article : U.N. Report Adds Pressure To Global-Warming Fight

Green in Silicon Valley

From nytimes.com : Sillican Valley Rebounds

Excerpts :
In Silicon Valley, investment in clean technology — from alternative energy products, like solar panels and hybrid cars, to the use of nanotechnology to solve environmental problems — went from $34 million in the first quarter of 2006 to $290 million in the third quarter, according to an annual report released Sunday by Joint Venture: Silicon Valley Network, a research organization in San Jose, Calif.
Clean technology crosses many industries, with nearly a quarter of the venture capital in clean technology going to software companies, followed by 15 percent going to semiconductor companies.

VCs in Washington D.C.

From nytimes.com : Tech Barons Take on New Project

Excerpts :

The venture capitalists say that their research and lobbying helped with the creation and passage of a California bill that Gov. Arnold Schwarzenegger signed into law in September, capping the state’s greenhouse gas emissions at 1990 levels by 2020.

When it comes to supporting alternative energy sources, the venture capitalists are backing up their words with money. In 2006, venture capitalists put $727 million into 39 alternative energy start-ups, compared with $195 million in 18 such firms for 2005, according to the National Venture Capital Association.

More than a third of the 2006 investments went to technologies related to ethanol, a gasoline alternative that is made from corn and other plant material. Mr. Bush has high hopes for ethanol and other alternative fuels, calling for them to take the place of 35 billion gallons of gasoline by 2017.

One venture-backed ethanol start-up is Altra, a 50-employee company based in Los Angeles. It offers a twist on ethanol production by making the fuel from nonedible plant matter, producing what is known as cellulosic ethanol. Kleiner Perkins Caufield and Byers invested an undisclosed amount in Altra as part of a financing round that raised $50 million, Altra said.

Mr. Denniston, a partner at the Silicon Valley investment firm Kleiner Perkins Caufield and Byers, said Altra could benefit from policy changes. For example, the government could require that cars be able to run on either ethanol or gasoline, or it could set up a national carbon trading system that would increase demand for ethanol by forcing companies to find greener alternatives to oil and gas. Such a system would put a limit on the volume of carbon dioxide emissions and then create a trading system where companies could buy credits that would permit them to emit more.

Mr. Denniston also wants to see a change to the so-called blender’s credit, a 51-cents-a-gallon subsidy that goes to the company that mixes gasoline with ethanol, typically one of the major gas companies. He would like that money to go to producers like Altra. And he wants the subsidy to rise when the price of oil falls, or drop when oil prices rise.

Kleiner Perkins has formed the Greentech Innovation Network to bring together entrepreneurs, scientists, academics and policy makers. The National Venture Capital Association has a committee focused on energy policies.

In September Vinod Khosla put together a 19-page paper calling for new energy policies — from mandating that 10 percent of gas stations have at least one ethanol pump to requiring that 70 percent of new cars sold in the United States by 2010 be able to use more than one type of fuel.

Bottom-up green movement in USA

States and cities are taking lead in America in enacting laws to regulate emission and alternative energy usage. A nice overview is in Economist : The Greening Of America.