On Energy and Geometric Progression

The following video has been labeled “The Most Important Video You’ll Ever See.” Hyperbole? It’s just a lecture on math, given by a Professor Emeritus of Physics at the University of Colorado-Boulder. It explains how just a 7% annual growth in energy use equals a 100% growth in 10 years. After a few decades, you’ve got a really big number. And a tremendously enormous problem. Watch and learn, please.

[H/T Peter Hufnagel]

Double Dippin’ with MERLE HAZARD

Merle Hazard is the one and only country-music singer writing songs about the Financial Crisis. He’s been on PBS NewsHour with Jim Lehrer; he’s been the subject of articles by The Economist, London’s Financial Times, The New York Times, and Der Spiegel. And by gum, the man can carry a tune! Here’s Merle Hazard performing “Double Dippin'”!

Why the BP Oil Spill is Like the Mortgage Crisis

Okay, it’s like this. The main reason we’re in a Great Recession is that, back in 1999, the U.S. government compromised itself to death. Bill Clinton wanted to increase lending to minorities. The Republican-controlled Congress (swept into office by Newt Gingrich’s “Contract with America”) said, “Only if you decrease regulation at the same time,” and so Phil Gramm (appointed senior economic adviser to McCain’s presidential campaign) drew up a bill that gutted Glass-Steagall, the 1933 act that prevented the Depression from happening again. President Clinton, weakened by the Monica Lewinsky scandal, didn’t have much wiggle-room in the Oval Office any more, and signed the legislation.

So, naturally, you get a huge housing boom totally based upon dodgy accounting and ludicrous credit standards which blows up in the world’s face.

You can’t make this stuff up, right?

Guess what. The BP oil spill is a result of exactly the same legislative deathmatch. The New York Times has a superb piece this morning by David S. Abraham declaring, this is a disaster that Congress voted for. In a highly balanced and nuanced argument, Abraham details how Congress really and truly has been addicted to providing the oil industry with economic incentives beyond all reason:

In a 1995 attempt to encourage more exploration, Congress agreed to reduce the cut of the proceeds the government could collect on oil and gas drilling in deep waters. Ten years later, despite higher oil prices and declarations from President George W. Bush that more incentives were not needed, a Republican-led Congress reduced royalties yet again.

It’s madness, of course – especially when

at the same time that Congress called for new drilling incentives, it also gutted oversight. From 2002 to 2008, legislators approved budgets reducing regulatory staffing levels by more than 15 percent… A 2004 Coast Guard study found that its “oil spill response personnel did not appear to have even a basic knowledge of the equipment required to support salvage or spill clean-up operations.”

When Bobby Jindal calls for more offshore drilling in order to help pay for coastal damage inflicted by offshore oil-and-gas operations (yeah, you read that right), then we have truly entered a land of the comedic insane, where the Mad Hatter starts writing Catch-22 contracts. The astounding thing is that, at base, it’s an exquisitely simple recipe for disaster: radically lower the barriers to enter the market, while radically de-regulating (by which we mean: knocking down the laws and rules that govern participation in this country’s economy) and what you get are toxic assets. That’s what we call a house, these days: a toxic asset, destroying the person who possesses it (for D&D fans, that’s kind of like a poisoned amulet, except with lots of bricks and mortar and wiring and plumbing).

But we should  be calling the oil spill a toxic asset too. The definition’s more apt; no metaphors needed here. It’s a natural resource that’s killing our economy and destroying the ecosystems of our oceans. It’s a substance that, for decades now, has powered our economy; now it’s bringing the Gulf to a standstill. It’s the toxic asset, our home mortgage that’s underwater. The rich will probably walk away from it, their dirty souls skimming the tops of the oily waves in that Gulf between them and us.

The Crises of Capitalism – the smartest video you’ll watch this year.

David Harvey, Distinguished Professor at the City University of New York, gives the world’s most pithy and complete explanation of the cumulative financial crises over the last 80 years to show us what’s happened. It’s an 11-minute showstopper of a lecture, and it is the only coherent 360-degree view of the crisis I’ve ever seen. I can’t emphasize how brilliant this is. Harvey is having an open online course reading Book I of Marx’s Capital. Watch this, and it’ll all make sense. Plus, it’s cartoony!

[H/T 3QuarksDaily]

Vow What?

After several reports of its demise, the Climate Bill is back on the burner. The president made a speech in its support today at Carnegie Mellon University . If Obama passes this one, he will be known as the President of reanimated zombie bills. Speaking of familiar, Republican support for the bill is no where to be found since Sen. Lindsey Graham backed off from Sen. Kerry’s shadow, but there are a pack of moderates targeted for swinging sides. Mentioning them, Obama said, “The votes may not be there right now, but I intend to find them in the coming months,”

While he had the microphone, he took the time to outline some of his ideas for the legislation. The President said he would like to roll back the oil tax breaks and use that money to invest in our energy independence. This is something that has been talked about during drum circles for over four decades, but this time the talk may become law in the wake of the disaster in the Gulf.

Here is an excerpt from his speech,

And the time has come to aggressively accelerate that transition.  The time has come, once and for all, for this nation to fully embrace a clean energy future.  (Applause.)  Now, that means continuing our unprecedented effort to make everything from our homes and businesses to our cars and trucks more energy-efficient.  It means tapping into our natural gas reserves, and moving ahead with our plan to expand our nation’s fleet of nuclear power plants.  It means rolling back billions of dollars of tax breaks to oil companies so we can prioritize investments in clean energy research and development.
But the only way the transition to clean energy will ultimately succeed is if the private sector is fully invested in this future — if capital comes off the sidelines and the ingenuity of our entrepreneurs is unleashed.  And the only way to do that is by finally putting a price on carbon pollution.
No, many businesses have already embraced this idea because it provides a level of certainty about the future.  And for those that face transition costs, we can help them adjust.  But if we refuse to take into account the full costs of our fossil fuel addiction — if we don’t factor in the environmental costs and the national security costs and the true economic costs — we will have missed our best chance to seize a clean energy future.
The House of Representatives has already passed a comprehensive energy and climate bill, and there is currently a plan in the Senate — a plan that was developed with ideas from Democrats and Republicans — that would achieve the same goal.  And, Pittsburgh, I want you to know, the votes may not be there right now, but I intend to find them in the coming months.  (Applause.)  I will continue to make the case for a clean energy future wherever and whenever I can.  (Applause.)  I will work with anyone to get this done — and we will get it done.

read more at the Atlantic

Two Terrible Words: Transfer Pricing

We all know that big companies search for loopholes in the tax code, but sometimes you read a case that just questions the whole system. Apparently there is a new fun practice called Transfer Pricing in which with very flittle foreign investment, you can bounce your companies profits through other nations that have light taxes. It literally takes a financial transaction in America and transfers the profits to another country. It’s a miracle every hot dog stand in Battery Park hasnt figured a way to game this.

Off shore banks have now become metaphysical.

Jesse Drucker writes for Bloomberg News,

After an economic bailout in which the U.S. government lent, spent or guaranteed as much as $12.8 trillion, the Obama administration faces a projected budget deficit of $1.5 trillion this year. In February, the administration said it would target some of the techniques companies use to shift profits offshore — part of a package intended to raise $12 billion a year over the coming decade.

Losing $60 Billion

That’s only about a fifth of the $60 billion in annual U.S. tax revenue lost to thousands of companies’ income shifting, according to a study published in December in the National Tax Journal by Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.

The lost revenue could pay the federal government’s share of health coverage for more than 10 million uninsured Americans, such as Hurst — more than a third of the people who will gain insurance under the health-care overhaul passed in March. The administration’s proposed tax on certain financial institutions would take almost seven years to generate $60 billion.

“Transfer pricing is the corporate equivalent of the secret offshore accounts of individual tax dodgers,” said Sen. Carl Levin, a Michigan Democrat and chairman of the Senate’s Permanent Subcommittee on Investigations, in a statement to Bloomberg News. Levin has overseen hearings on tax shelters including those sold to wealthy people by KPMG LLP. “Now that progress has been made in addressing offshore tax abuse by individuals, transfer pricing is an issue that deserves scrutiny.”

read more at Bloomberg

An End To Selling Favorable Ratings?

David Lightman and Kevin G. Hall write for McClatchy

WASHINGTON — The Senate took strong steps Thursday to fix a key cause of the recent financial crisis, approving measures to limit the ability of Wall Street firms to shop around for favorable ratings from now-discredited credit rating agencies.

Lawmakers approved two rating-agency amendments to a sweeping overhaul of financial regulation, despite objections from Senate Banking Committee Chairman Christopher Dodd, D-Conn.

Moody’s Investors Service, Standard & Poor’s and Fitch Ratings were all key players in the nation’s financial meltdown, giving blue-chip ratings to complex mortgage-backed bonds that turned out to be junk.

A McClatchy investigation last October revealed how Moody’s and its competitors sold out investors by trading their ratings for huge fees that came from rating complex deals.

Sen. Al Franken, D-Minn., offered an amendment aimed at putting an end to this Wall Street behavior that passed on a bipartisan 64-35 vote.

“They shop around for their ratings. They select those agencies that tend to offer them the best ratings, and threaten to stay away from rating agencies that are too tough on them,” Franken said.

Read more at McClatchy

Some Call it Groundhog Day… We Call it WHEN HISTORY ATTACKS!

Lots of things get recycled. Like our historical amnesia.

From Timothy Egan in the May 5 New York Times‘ Opinionator:

On energy, amnesia is the American way. Things lumber along, 300-million-year-old fossil fuels are pulled from deep inside the kingdoms of desert despots and shipped to our shores. It’s slow-motion suicide, of sorts, to the planet — and I’m no worse or better than anyone else who uses oil for everyday comforts — but we don’t see the wounds until a spill brings it all home.

Totally. As you may remember from our About Us page,

Santayana said: “Those who do not learn from history are doomed to repeat it.” This may be truer for America than anywhere else, because we pride ourselves on dismissing the past, moving forward, progress. In America, the past just gets in the way, and has to be torn down like an old building.

We think this time is different. This time, the past has blocked our way, and is threatening to tear us down instead. We chronically bubble our economy, import our energy and use it inefficiently, and waste our water resources.

Egan is absolutely right when he says:

Suddenly, alarms are sounded. Brows are furrowed. Promises are made. This time, with fears that the Gulf spill will be even larger than the one in Alaska, lessons will be learned, yesiree. But soon enough, we’ll go back to planting trees on Earth Day, feeling good about recycling — Hooray for us! We’re green and cool — while resuming the old routine. That is: a nation with five percent of the earth’s population consuming about 23 percent of the world’s oil output, glug, glug, glug.

That’s what we said:

But crisis is nothing new to Mankind: every couple of generations, the same portents of Apocalypse gather – only to be swept under the carpet when the warnings of imminent destruction are perceived to be from the radical fringe, crying wolf.

Let’s face the music and dance.

But don’t fret! You and Timmy are the lucky ones – now there a lot more ways to make things go.

Trillion Dollar Typo?

Analysts are arguing today as to the cause of a major sell off in the stock market that took place yesterday May 6, 2010. Suggestions range from the Greek debt crisis all the way to a trader mistake who typed B for billion, when he meant to type M for million. At one point DOW had lost nearly 1000 points causing a rush of buyers to move in and snatch up the low prices. Whatever the cause yesterday, The massive movement reminded everyone that the Market is prepared to behave like a swarm of angry bees at the drop of a hat. Here’s some of the buzz from  the trading floor.

“We had a self-fulfilling policy of regulatory failure because of the leadership in this era.”

We have known since the Enron in 2001 that this is a common scam, in which every major bank that was approached by Enron agreed to help them deceive creditors and investors by doing these kind of transactions.

And so what happened? There was a proposal in 2004 to stop it. And the regulatory heads — there was an interagency effort — killed it. They came out with something pathetic in 2006, and stalled its implication until 2007, but it ’s meaningless.

We have known for decades that these are frauds. We have known for a decade how to stop them.

That’s Bill Black, the former Litigation Director for the Federal Home Loan Bank Board, in testimony before Congress. This is the true story of the mortgage crisis, the financial crisis and the Great Recession, available on video on FireDogLake. You must watch it to believe it.

What a White-Collar Felon Can Teach You

My name is Sam E. Antar. I am a convicted felon, former CPA, and former Chief Financial Officer of Crazy Eddie, Inc. During the 1980s, I helped mastermind with my cousin Eddie Antar and Uncle Sam M. Antar (co-founders of the company) one of the largest securities frauds of its time. Crazy Eddie Antar was coined by US Attorney Michael Chertoff as, “the Darth Vader of Capitalism.”

I believe that former criminals like me must do more than just express regret for our crimes and pay whatever punishment society imposes upon us. I believe that it is our obligation and responsibility to educate society, so that society can avoid future perils caused by new generations of criminals.

I teach law enforcement, government entities, businesses, professionals, and students about white collar crime and train them to catch corporate miscreants.

With that preamble, how can you not read his blog, especially this post about the SEC’s kick-ass tactics on Goldman Sachs? Antar writes, “When a company or individual receives a surprise subpoena on a Friday from the SEC, it is usually designed to ruin their weekend plans.” Antar also notes that the SEC’s chief counsel on this case is none other than Richard E. Simpson, who was the guy who put Sam and Crazy Eddie behind bars. After decades of SEC fecklessness (to put it charitably), finally they are swinging for the bleachers.

“Newsflash”

I was traveling via Los Angeles International Airport — LAX — last week. Walking through its faded, cramped domestic terminal, I got the feeling of a place that once thought of itself as modern but has had one too many face-lifts and simply can’t hide the wrinkles anymore. In some ways, LAX is us. We are the United States of Deferred Maintenance.

Why is Thomas Friedman absolutely, completely, the last person to understand anything?

Reforming the S.E.C.: It’s Simple Math

Madoff with your loot.

I have a couple friends who have the most exciting job imaginable in a field with a really boring reputation: they’re forensic accountants. They’re the folks who are called upon to tease out the fake numbers of financial fraudsters once an indictment’s come down. They helped put Bernie Madoff in jail, and a lot of other Wall Street hooligans too. How do I know? Because I asked ’em. I also asked ’em if they’d like a post at the National Security and Exchange Commission (SEC). One laughed. He said, “When they pay me as much as I’m making here!”

Now, these folks I know, they’re brilliant. And they’re right on. But they make their money after everyone else has lost theirs. That’s not right. And when I read something like this, I get really mad:

Why do you think the S.E.C. failed to wake up to Madoff’s $65 billion Ponzi scheme until he turned himself in?

They weren’t even asleep at the switch; they were comatose. They didn’t respond to heat and light, much less evidence of wrongdoing. They were not engaged in the fight.

That’s Harry Markopolos, who describes himself as “the SEC’s doormat for nine years,” who’s being profiled in The New York Times and has a new book out, No One Would Listen.

Simply put, we need to reform the compensation system for federal employees. People who work in finance are, naturally, motivated by money. People who are motivated by money and ethics and personal accountability and interesting problems go into fields like venture capitalism and forensic accounting. It makes no sense to hire SEC investigators and put them on a bureaucratically-contrived federal tier pay system tied to seniority. If, long ago, we had created enough incentives for my brilliant friends to work for the federal government and stop the Ponzi schemers and mortgage tranchers before the crap hit the fan, we could all have breathed a sigh of relief and continued to sip our martinis. As it stands, my friends the forensic accountants are skiing at Killington and sipping martinis while the rest of us are on the Mad Dog 20/20.

~ David Schneider

Chinese Markets Join in on the Fun

DAVID BARBOZA writes for the New York Times,

SHANGHAI — China took a major step Friday toward making its capital market system more sophisticated and perhaps more stable as it agreed to give investors a new and powerful set of risk-management tools.

The government said it had approved, “in principle,” the creation of stock index futures, trading on margin and short selling, investment tools that are commonly used in New York, Chicago, London and many other financial markets, according to Xinhua, China’s state run news agency.

The announcement means that for the first time investors in China have more options than simply buying and selling their favorite stocks. They will soon be able to invest in a stock index (or set of stocks, collectively) and borrow money to trade stocks on margin.

Investors will also be able to make financial bets that stock prices will fall, a practice called short selling.

“This is a major step for China’s capital markets,” said Chang Chun, a professor of finance at the China Europe International Business School in Shanghai. “The government has been studying this for a long time.”

The China Securities Regulatory Commission said on its Web site Friday that it may take three months to complete preparations for the new investing tools to become available.

“This improves the stability and the healthy development of the capital markets,” the C.S.R.C. said in its statement.

By approving the new tools, the government hopes to accomplish several goals, including giving Shanghai more credibility as a financial capital and encouraging more ordinary Chinese to invest in equity markets. Many households still keep a large amount of their savings in low-interest accounts at state banks.

The announcement Friday did not come as a surprise to investors here.

Rumors that such an announcement was imminent have excited market players in recent days.

They drove up the share prices of Chinese brokerage houses, which expect to cash in on the new rules by making margin loans to investors and giving them additional options to hedge their risk.

read more at the New York Times

AIG Emails May Reveal Silver Bullets

ELIOT SPITZER, FRANK PARTNOY and WILLIAM BLACK write for the NYT,

WE end this extraordinary financial year with news that the Treasury is in discussions with American International Group about selling the taxpayers’ 80 percent ownership stake in that company. The government recently permitted several banks to break free of its potential oversight by repaying loans made during the rescue. But with respect to A.I.G., the Treasury should not move so fast. There is one job left to do.

A.I.G. was at the center of the web of bad business judgments, opaque financial derivatives, failed economics and questionable political relationships that set off the economic cataclysm of the past two years. When A.I.G.’s financial products division collapsed — ultimately requiring a federal bailout of $180 billion — those who had been prospering from A.I.G.’s schemes scurried for taxpayer cover. Yet, more than a year after the rescue began, crucial questions remain unanswered. Who knew what, and when? Who benefited, and by exactly how much? Would A.I.G.’s counterparties have failed without taxpayer support?

The three of us, as experienced investigators and prosecutors of financial fraud, cannot answer these questions now. But we know where the answers are. They are in the trove of e-mail messages still backed up on A.I.G. servers, as well as in the key internal accounting documents and financial models generated by A.I.G. during the past decade. Before releasing its regulatory clutches, the government should insist that the company immediately make these materials public. By putting the evidence online, the government could establish a new form of “open source” investigation.

Once the documents are available for everyone to inspect, a thousand journalistic flowers can bloom, as reporters, victims and angry citizens have a chance to piece together the story. In past cases of financial fraud — from the complex swaps that Bankers Trust sold to Procter & Gamble in the early 1990s to the I.P.O. kickback schemes of the late 1990s to the fall of Enron — e-mail messages and internal documents became the central exhibits in our collective understanding of what happened, and why.

So far, prosecutors and regulators have been unable to build such evidence into anything resembling a persuasive case against any financial institution. Most recently, a jury acquitted Bear Stearns employees of fraud related to the collapse of the subprime mortgage market, in part because available e-mail messages suggested the employees had done nothing wrong.

Perhaps A.I.G.’s employees would also be judged not guilty. But we would like to see the record to find out. As fraud investigators, we would like to examine the trading patterns of A.I.G.’s financial products division, and its communications with Goldman Sachs and other bank counterparties who benefited from the bailout. We would like to understand whether the leaders of A.I.G. understood that they were approaching a financial Armageddon, and whether they alerted their counterparties, regulators and shareholders to the impending calamity.

We would like to see how A.I.G. was able to pay huge bonuses to its officers based on the short-term income they received from counterparties for selling guarantees that, lacking adequate loss reserves, the companies would never be able to honor. We would also like to know what regulators knew, and what they did with the information they had obtained.

Congress wants answers, too. This month, during hearings on Ben Bernanke’s nomination to a second term as chairman of the Federal Reserve, several senators fumed about being denied access to his A.I.G.-related documents.

No doubt, some of the e-mail messages contain privileged conversations among lawyers. Others probably include private information that is irrelevant to A.I.G.’s role in the crisis. But the vast majority of these documents could be made public without legal concern. So why haven’t the Treasury and the Federal Reserve already made sure the public could see this information? Do they want to protect A.I.G., or do they worry about shining too much sunlight on their own performance leading up to and during the crisis?

please read the rest at the New York Times


Copenhagen Looks Stuck

Jeffrey Ball, Stephen Power, and Guy Chazan write for the Wall Street Journal,

COPENHAGEN — Negotiators at the United Nations climate summit scrambled Wednesday to bridge multibillion-dollar disagreements as President Barack Obama and other world leaders prepared to descend on the Danish capital Friday.

As night fell in Copenhagen Wednesday, it appeared that the leaders could arrive for the summit’s final sessions with significant work to do to achieve Mr. Obama’s goal of a “meaningful” climate agreement.

Mr. Obama has gotten personally involved in a last-ditch lobbying effort, calling large and small nations seen as pivotal to breaking an impasse. Failure to ink even a nonbinding political deal in Copenhagen would be an embarrassment to Mr. Obama, who has made attacking climate change a centerpiece of his agenda.

Mr. Obama has telephoned leaders in Bangladesh, Ethiopia, Brazil, Grenada, France, Germany and the U.K. as U.S., European Union and Australian negotiators lobby others in the so-called G-77 group of poorer nations “who know it’s in their strategic interest…not to go along with the others,” said one official involved in the talks. In some cases, negotiators for G-77 nations approached their bigger Western interlocutors, offering input as they tried to hash out a deal.

The White House said Wednesday that the talks were deadlocked.

Danish negotiators talked Wednesday with officials from a number of delegations to try to hash out elements of a potential agreement. Ideas under discussion include calling on nations to make emission cuts by 2020 that they have already promised, outline cumulative emission limits the developed world should meet by 2030, and include a target for a cumulative emission limit by 2050 for the entire world. None of these would be binding.

Also under discussion is the creation of a fund of about $30 billion that developed countries would offer to pay for emission-reduction efforts in developing countries through 2012.

One element of a potential Copenhagen result emerged Wednesday as the U.S., Britain, France, Australia, Japan and Norway pledged $3.5 billion Wednesday toward slowing the cutting of forests in developing countries. But that offer depends on a broader agreement.

In addition, negotiators are looking at a way to resolve a dispute over how nations would verify that other countries are making promised emission cuts. Under discussion is a proposal that would set minimum standards of information sharing.

read more at the Wall Street Journal

Ethiopian Prime Minister Meles Zenawi Calls For Compromise

John Vidal writes for the Guardian.

The head of the African group of nations at the UN climate change conference in Copenhagen has proposed a finance deal where rich countries would pay for schemes to help poor states adapt to climate change and develop their economies using clean technology.

The proposal, from the Ethiopian prime minister, Meles Zenawi, of $50bn (£44bn) a year for poor countries by 2015 and $100bn (£89bn) by 2020, is far less than many developing nations had been calling for, but is roughly in line with a proposal in June by the UK prime minister, Gordon Brown, and an offer agreed by the EU in October.

Control over the funds would lie with the countries receiving the money. The G77 group of 130 countries, backed by the least developed countries and small island states, has long proposed that $400bn (£356bn) a year, or 1% of rich countries’ GDP, would be the appropriate figure.

Meles also proposed that 50% of the fund created should be allocated to vulnerable and poor countries as well as “regions such as Africa and small island states”.

In addition, he suggested that a group of high level financial experts investigate and report back within six months on possible “innovative” ways to raise the money. IMF special drawing rights, as proposed by the G77 and financier George Soros, a carbon tax, a possible “Tobin tax” on all financial transactions and even taxes on flights and shipping would all be assessed. His proposal is likely to have been largely agreed by rich countries following intense talks in the last 24 hours between Meles, Gordon Brown and other world leaders.

Meles admitted that many Africans would not be happy: “I know my proposal will disappoint those Africans who … have asked for full compensation … for damage done to our development prospects. My proposal dramatically scales back our expectation of the level of funding in return for more reliable funding and a seat at the table in the management of such fund.”

“Because we stand to lose more than others we have to be flexible,” he said, adding that there was a danger that no deal would be done. “That is not an idle threat but a solemn promise by Africa that we will strive for a fair and just deal,” he said.

read more at the Guardian

Nigeria Sees Red in Copenhagen

JEROME CARTILLIER writes for the Mail & Guardian Online,

Africa’s frustration at the United Nations climate summit boiled over on Monday as delegates walked out of key talks and continental giant Nigeria warned the negotiations were now on red alert.

Sources at the marathon talks said Africa led a five-hour boycott of working groups, with the backing of the Group of 77 developing nations, and only returned after securing guarantees that the summit would not sideline talks about the future of the Kyoto Protocol.

The Kyoto Protocol ties rich countries — but not developing countries — that have ratified it to legally binding emissions curbs.

It also has an important mechanism enabling the transfer of clean-energy technology to poorer nations.

Yet it does not include the United States, which says the Protocol is unfair as the binding targets do not apply to developing giants that are already huge emitters of greenhouse gases.

Algeria, speaking at a press briefing on behalf of the 53-member African Union, demanded that there should be a special plenary session devoted to Kyoto.

“Otherwise we are going to lose everything,” Algeria’s chief negotiator Kemal Djemouia told reporters.

Asked about the state of negotiations, Nigeria’s pointman rang the alarm bell.

“It is ‘climate code red’ right now, we are in code red right now, we stand at the crossroads of either hope for Africa or hope dashed in ‘Hopenhagen’,” Victor Ayodeji Fodeke told Agence France-Presse.

read more at the Mail & Guardian Online

African Nations Teeter from Boycott

Andrew Ward and Ed Crooks write for the Financial Times,

Talks have resumed at the Copenhagen climate conference amid escalating tensions between rich countries and the developing world over how a deal should be structured.

African nations had earlier on Monday led a boycott of a key working group bringing negotiations to a halt. The delegates returned later saying that they had won some concessions.

The temporary halt in the talks came just four days before world leaders are supposed to converge on the Danish capital to complete a deal, and underlined that developing countries remain at loggerheads with the US, Europe and their allies over how to share the burden of fighting global warming.

Much of the tension is focused on whether to keep alive the Kyoto protocol – the existing international climate agreement struck in 1997 – as part of a new deal or replace it with an entirely new treaty.

Developing countries, including China, India and Brazil, want to keep the Kyoto process because it commits developed countries to legally binding emissions cuts without making the same requirements of poorer nations.

But developed countries, led by the US, want a new framework that binds China and other emerging economies to targets.

African leaders on Monday accused Denmark, which is chairing the conference, of trying to sideline the Kyoto protocol from negotiations and said they would not take part in the morning’s talks as a result. Other developing countries backed their stance, leading to the suspension.

“The Kyoto protocol is of paramount importance to us,” said Mama Konate, chief delegate for the African nation of Mali. “We can never accept the killing of the Kyoto protocol.”

read more at Financial Times

Carbon Has a Posse?

Jim Tankersley writes for the Los Angeles Times,

Reporting from Copenhagen – International negotiators are quietly making progress here on steps to reduce “stealth” pollutants that contribute to climate change, including soot, refrigerants and methane gas, which together account for nearly as much greenhouse gas pollution as carbon dioxide.

Carbon dioxide, of course, is the poster gas for global warming. Disagreements over how to reduce its emission from cars, factories and power plants have dominated the Copenhagen climate talks so far.

But carbon dioxide accounts for only half the world’s greenhouse gas emissions. And while top leaders postured and negotiated over a host of issues related to carbon emissions in the first week of the summit here, behind the scenes diplomats have worked toward compromises on a few simple strategies to reduce the other pollutants that cause global warming.

Those sources include so-called black carbon, soot from incompletely burned fossil fuels and biomass, including that produced by ships and cooking stoves that collects in the atmosphere and on ice and prevents sunlight from being reflected back into space; hydrofluorocarbon chemicals, known as HFCs, used in refrigerators and air conditioners worldwide; and methane, which emanates from coal mines and landfills.

Many scientists and environmentalists say reducing the “forgotten 50%” of pollutants will be faster, easier and substantially cheaper than cutting carbon dioxide, and could buy the world time in its climate clock race.

“We can eliminate — not just cut — one of the six greenhouse gases this week,” said Durwood Zaelke, a longtime environmental lawyer who is president of the Institute for Governance and Sustainable Development. “This can buy us more than a decade of delay” against the worst effects of climate change, he said.

read more at the Los Angeles Times

Africa Unites?

John Vidal, Jonathan Watts and Suzanne Goldenberg write for the Guardian,

The Copenhagen climate talks hit trouble tonight as a number of African countries indicated their leaders would refuse to take part in the final summit unless significant progress was made in the next three days.

The showdown between rich and poor countries came as ministers began arriving in Copenhagen to take over negotiations. However, negotiators failed to reach agreement in key areas such as emission cuts, long-term finance and when poor countries should start to reduce emissions.

More than 110 heads of state, mainly from developing countries, are due to begin arriving on Thursday for an intense 24 hours of final negotiations.

Delegates hope for a deal on Friday that will ensure temperatures do not rise by more than 2C, and that hundreds of billions of pounds is pledged to help poor countries adapt to climate change. But tonight it appeared that many did not want to risk being pressured into signing an agreement they believe would be against their national interests.

“The industrialised countries want to hammer out a large part of the deal on the last day, when the heads of state arrive,” one senior African negotiator told the Guardian on the condition of anonymity. “It’s a ploy to slip through provisions that are not amenable to developing country efforts. It’s playing dirty.”

One added: “It is as serious a situation as it ever has been. It is more than probable many heads of state will not come if the negotiations are not complete. Why should a head of state come to sign an agreement that is basically a non-agreement?”

High level Chinese and Indian representatives indicated they would be in Copenhagen, but they made clear they wanted key points agreed before they arrive. They also appear desperate to avoid a situation where western leaders jet in and steamroller the main points on the last day of the conference.

read more at the Guardian