Category Archives: ECON-FINANCE

Japan struggles to rebuild

Insight: Japan struggles to rebuild, leaving lives in limbo | Reuters.

Severe storms hit the Midwest on Saturday and are expected later in the Northeast, where flash flooding killed at least four people in Pittsburgh on Friday.

Heavy rains submerged cars in flood water that was nine feet deep in places in Pittsburgh, authorities said.

A mother and her two daughters died when water engulfed their vehicle in a low-lying section of the city’s Washington Boulevard near the Allegheny River.

Kimberly Griffith, 45, and her daughters Brenna, 12, and Mikaela, 8, were pronounced dead at the scene, a spokeswoman for the Allegheny County medical examiner’s office said.

The water pinned their vehicle to a tree and they were unable to escape, authorities said.

Also recovered after the flood was the body of Mary Saflin, 72, who had been reported missing earlier, according to the Allegheny County medical examiner’s office.

The Philadelphia area was also soaked by heavy thunder showers Friday, bringing a record rainfall of 12.95 inches for August, close to the record for any month, according to NWS meteorologist Lee Robertson.

The previous record is from September 1999, set when a hurricane pushed rainfall to 13.07 inches.

As more storms were forecast for the region Sunday, the NWS warned in a flood advisory that nearly half of all flood fatalities are vehicle-related.

“As little as six inches of water will cause you to lose control of your vehicle,” the NWS stated.

MORE STORMS

The Weather Channel forecast more storms from the Great Lakes to the Central Plains into Saturday night.

One man died as storms and a tornado roared across northern Wisconsin Friday night, cutting an 8-mile-wide swath 65 miles north of Green Bay and taking out power to around 2,000 homes, officials said.

Douglas Brem, 43, was staying in a rented trailer at a recycling center in the path of the storm, which caused extensive damage to homes, Marinette County Coroner George Smith said.

A fierce thunderstorm in the Chicago area Saturday suspended the Chicago Air & Water Show until about 2 p.m., leaving time for a condensed show. The two-day free annual event was expected to attract around 2 million spectators.

Saturday’s thunderstorm threat will shift to the Northeast Sunday.

The Southeastern Virginia Hampton Roads region was spared from severe storm activity, but smoke from a 6,000-acre fire in the Great Dismal Swamp continues to plague the region down into North Carolina.

Virginia’s Environmental Quality Department downgraded Friday’s air quality red alert in some areas to orange, advising of possible health problems for sensitive individuals.

(Additional reporting by John Rondy in Milwaukee, Cynthia Johnston in Las Vegas, Matthew A. Ward in Chesapeake, Va., David Warner in Philadelphia; Writing by Molly O’Toole and Mary Wisniewski; Editing by Jerry Norton)

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ACTION PLAN NEEDED

<span class="articleLocation”>More than five months after a massive magnitude 9.0 earthquake and a deadly tsunami ravaged Japan’s northeast coast, the nation has yet to come up with a detailed action plan and the money needed to rebuild the devastated areas.

The following is a summary of where Japan’s rebuilding efforts stand.

DEATH TOLL, EVACUEES AND SHRINKING WORKING-AGE POPULATION

— About 15,690 were killed, 4,740 are missing, and 5,710 were injured.

— Many of about 5.6 million residents of the three prefectures worst hit by the March disaster have lost their homes and the number of evacuees peaked at more than 475,000 on March 14.

— Some 9,900 still live in evacuation shelters while 34,100 are staying in hotels or with relatives or friends and about 40,000 live in temporary housing.

— Japan’s northeast is aging faster than other area of a country whose population is already graying at a rapid pace. By 2030, 31.6 percent of the population is expected to be above 65 in Tohoku, whereas the country-wide estimate is 29.6 percent.

According to BNP Paribas estimates the region’s working population shrunk 8.4 percent over the past 15 years and is expected to decline by further 12.6 percent over the next decade.

RUBBLE

— The quake and tsunami left an estimated 22.6 million tonnes of rubble in the coastal towns. Out of that, nearly half has been moved to temporary storage destinations.

— By end-August, the government aims to remove debris from areas where people live and work and this goal is likely to be met. But removal of all rubble and dismantling of damaged buildings will take months, if not years, and the government aims to dispose the stored rubble by end of March, 2014.

ECONOMIC DAMAGE

— The quake and tsunami destroyed supply chains given that the northeast is home to many manufacturers. Japan’s gross domestic product fell 0.9 percent in the first quarter, tipping the economy into its second recession in three years. But in the second quarter, the economy shrank much less than foreseen as companies made strides in restoring output and is expected to bounce by 1.2 percent this quarter — probably the best performance among major industrialized nations.

— The government initially estimated the material damage from the March 11 disaster at 16-25 trillion yen ($190-$300 billion) but later lowered it to 16.9 trillion yen ($210 billion). The estimated damage is roughly double that from the 1995 Kobe earthquake.

EMERGENCY BUDGET FOR RELIEF

— The government enacted its first extra budget of 4 trillion ($50 billion) in May, and its second emergency budget of 2 trillion ($25 billion) in July.

— The government hopes to pass the third extra budget by the end of September under a new prime minister, though whether this can materialize so quickly is unclear.

DAMAGE TO FISHING AND FARMING

— Northeast Japan is known for fishing and farming. Damages in the fishing industry are estimated at 1.23 trillion yen. About 320 fishing ports, or 11 percent of all fishing ports in Japan, have been closed due to the March disaster and it would take at least another decade for full operations to resume at these ports.

— About 2.6 percent of the total farm area in Japan, or 23,600 Ha, has been washed away or submerged due to the disaster.

AID MONEY

— The Japanese Red Cross Society has so far collected 259 billion yen in relief money. Out of this, about 48 percent has been distributed to disaster victims, while the remaining amount is stuck at overburdened local governments.

(Sources: The Cabinet Office’s Reconstruction Headquarters in response to the Great East Japan Earthquake, Environment Ministry, Fukushima Prefecture, Miyagi Prefecture, Statistics Bureau, Fisheries Agency, Farm Ministry, Japanese Red Cross Society, Cabinet Office, National Police Agency, Tohoku Trade department)

(Reporting by Yuko Takeo; Additional reporting by Yoko Kubota)

 

Weather Service pleads to be spared from cuts

Weather Service urges to be spared from spending cuts | Reuters.

MIAMI | Thu Aug 4, 2011 5:53pm EDT

(Reuters) – Nature has not stinted in unleashing deadly weather on the United States this year and leaders should recognize the need for good forecasting services when they wield the cost-cutting knife, the director of the National Weather Service said on Thursday.

Jack Hayes used the opportunity of the National Oceanic and Atmospheric Administration’s updated 2011 Atlantic hurricane forecast to stress “what taxpayers are getting in return for their investment in the National Weather Service,” which is part of NOAA.

A hard-fought deficit-cutting deal passed by Congress and signed into law by President Barack Obama this week foresees $2.1 trillion in overall budget savings over 10 years, with painful cuts expected across the government.

“Here in Washington, D.C., our nation’s leaders are making extremely tough decisions about federal spending, including what government services to fund and which to trim in efforts to reduce the nation’s deficit,” Hayes said on a conference call before the hurricane forecast update.

Calling this situation a “pressing issue,” Hayes said 2011 has been a record year so far for extreme weather.

“Many recent events have shattered long standing records for tornadoes, floods, blizzards, wildfires and now we’re experiencing, throughout much of the nation, heat waves,” he said.

Tornadoes raking across the United States this year killed more than 540 people, and these and other extreme weather events have caused $32 billion in economic losses so far, making it a costly year, Hayes said.

“And we’re only halfway through the year with the bulk of the hurricane season still ahead,” he added.

Predicting the Atlantic-Caribbean region was heading for a busier-than-average 2011 hurricane season, NOAA experts raised their activity outlook, forecasting 14 to 19 tropical storms, with seven to 10 of those growing into hurricanes.

The National Weather Service chief said the service’s outlooks and forecasts provided key weather and climate information to industries from aviation to farming, tourism and fishing, to states and local municipalities, power companies and emergency managers.

“Accurate and timely weather services are important in people’s daily lives but, even more important, they are a critical part of rebuilding the nation’s economic security and reducing tragic loss of precious lives,” Hayes said.

(Editing by Vicki Allen)

Is the world cracking up?

Is the world cracking up? | Daniel W. Drezner.

Posted By Daniel W. Drezner Share

[WARNING:  THE FOLLOWING IS A VERY PESSIMISTIC GLOBAL POLITICAL ECONOMY POST]

So, just to sum up the past week or so of global political economy events:

1)  U.S. government debt got downgraded by Standard & Poor;

2) Global equity markets are freaking out;

3) The eurozone appears to be unable to solve its sovereign debt problem

4) London Britain is burning;

5) The Chinese are pissed that they appear to be underwriting downgraded, debt-ridden train-wrecks… and this is on top of being pissed about their own train wrecks.

This all sounds very 2008, except that it’s actually worse for several reasons. First, the governments that bailed out the financial sector are now themselves the object of financial panic and political resentment. Second, the tools used to try and rescue the global economy in 2008 are partially to blame for what’s happening right now. Despite all the gnashing of teeth about the Fed twiddling its thumbs, it’s far from clear that a QE3 would actually stimulate anything besides a rise in commodity prices.

With both Europe and the United States unable to stimulate their economies, and China seemingly paralyzed into indecision, it’s worth asking if we are about to experience a Creditanstalt moment.

The start of the Great Depression is commonly assumed to be the October 1929 stock market crash in the United States. It didn’t really become the Great Depression, however, unti 1931, when Austria’s Creditanstalt bank desperately needed injections of capital. Essentially, neither France nor England were willing to help unless Germany honored its reparations payments, and the United States refused to help unless France and the UK repaid its World War I debts. Neither of these demands was terribly reasonable, and the result was a wave of bank failures that spread across Europe and the United States.

The particulars of the current sovereign debt crisis are somewhat different from Creditanstalt, and yet it’s fascinating how smart people keep referring back to that ignoble moment. The big commonality is that while governments might recognize the virtues of a coordinated response to big crises, they are sufficiently constrained by domestic discontent to not do all that much.

So… is this 1931 all over again?

There are three aspects of the current situation that make me fret about this. The first is the sense that developed country governments have already tapped out all of their politically feasible methods of stimulating their economies. This is the time when both politicians and voters start to ask themselves, “Why not pursue the crazy idea?”

The second is whether the Chinese government will do something to satiate their nationalist constituency. Neither Joe Nye nor James Joyner thinks this is likely, and I tend to agree that any effort at economic coercion will hurt China as much as the United States. When autocrats are up against the wall, however, then they might take risks they otherwise would never consider.

The third is this working paper on what causes societal unrest in developed economies (h/t Henry Farrell). The abstract suggests more trouble on the way:

From the end of the Weimar Republic in Germany in the 1930s to anti-government demonstrations in Greece in 2010-11, austerity has tended to go hand in hand with politically motivated violence and social instability. In this paper, we assemble crosscountry evidence for the period 1919 to the present, and examine the extent to which societies become unstable after budget cuts. The results show a clear positive correlation between fiscal retrenchment and instability. We test if the relationship simply reflects economic downturns, and conclude that this is not the key factor.

So… there are, unfortunately, numerous reasons to think that we’re headed down a bad road… which is the pretty much point of this post.

Readers are encouraged in the comments to offer counterarguments for why things aren’t as bad as 1931. I’ll be offering some thoughts about why 1931 won’t happen again later in the week.

Could the World Situation Get Any Worse? You Betcha!

From Bad to Worse – By David J. Rothkopf | Foreign Policy.

It is hard to deny. Things are looking bleak. But are they as bad as they could get?

The answer, of course, is no.

Here are 10 things that could happen between now and the end of next year that could make things much worse and why President Obama should consider not running for reelection.

Europe’s debt crisis could deepen
The European Central Bank’s interventions to prop up Spain and Italy could prove inadequate. EU leaders will continue to avoid real structural reform. European banks, now showing a reluctance to lend (akin to their mood immediately after the collapse of Lehman Brothers) could themselves teeter, burdened by the prospects of sovereign debt defaults and a global slow down. Spain and Italy could take a turn for the worse. The rest of the world, preoccupied with their own problems, might be as distracted as are the northern Europeans frustrated with bailing out their feckless southern neighbors.

Tensions tighten
Europe’s economic problems could beget deepening social tensions. Unrest like that seen in the United Kingdom could become more commonplace. With jobs drying up, anti-immigrant violence could grow. Nationalism could feed off these tensions and fuel more steps like Denmark’s move away from the EU’s commitment to open borders among its states.

U.S. recession regression
The United States could officially enter recession. Reduced tax revenues will be one painful consequence of the slow down. Politicians will struggle to reduce debt but find it hard to do so in the near term. The problem will burgeon. Small- and medium-sized communities will default. Several large cities and perhaps one or two significant states will be at risk of being unable to pay their bills. Draconian cutbacks in police and social services will blend with high unemployment and growing inequality to produce social unrest in the United States. Stock markets will continue their slide.

Global contagion
We could enter a global recession. Downturns in the United States and the European Union could feed off of one another and the fragile Japanese economy would almost certainly sink as a result. Credit tightness and political indecisiveness will deepen the gloom.

Inflation hits the BRICs
While emerging markets like China and Brazil might see inflation worries ebb due to the global recession and falling demand for high-priced commodities … they might not. Their currencies could strengthen as established ones falter, making exports more costly at just the wrong moment. Secular growth in demand for commodities may slow declines somewhat reducing the “benefits” of declining demand. Alternatively, or additionally, real estate and financial bubbles might burst in each of these countries as investor doubts grow. Note that Brazil took a particular beating during the recent downward market spike.

Middle East meltdown
Tensions in the Middle East could grow. Palestine’s push for statehood might be followed by massive displays of civic unrest. An Israeli government burdened with economic problems of its own and a little arthritic when it comes to its willingness to show flexibility with its near-neighbors will move too slowly. States elsewhere in the region grappling with their own problems — a more anti-Israel Egypt, Syria, Iran, and others — will fan the flames. Meanwhile, the problems in those states will put the entire region on the edge of an unprecedented meltdown. Thus, even with falling global demand and the recent downturn in oil prices, you could see upward pressure on petroleum as well. Then, Iran announces it has successfully tested a nuclear weapon.

Sub-continental showdown
The government in Pakistan could totter or be decapitated thus heightening fears of even more pronounced Islamist influence and of growing tension with India. Indian markets fall. The Indian government is unable to pursue needed economic reforms. Social unrest might be seen throughout the sub-continent.

Another Eyjafjallajokull
One or more exogenous events of the type that regularly occur without warning — a terror attack, an earthquake, a tsunami, a devastating hurricane or typhoon, the eruption of an Icelandic volcano — could slam a major economy weakening the global situation further.

Expect the unexpected
An unexpected or unexpectedly intense conflict could erupt in the Russian near abroad, in Central Asia, in Turkey, in Africa, or in the Middle East creating even more uncertainty. With economically unsteady and politically hesitant leadership in the world’s most important powers growing instability fueled by rogue opportunists seems increasingly likely.

Some combination of the above could then turn the global recession plus related banking, derivatives and stock-market crises into a depression.

It is undeniable that many of the above developments are not highly likely. But what is striking is just how plausible most of them are. These are the kind of medium-to-low probability outcomes with significant consequences that planners must take into account.  It is also easy to see how further inaction, half-steps, and wrong steps by leaders could make these and other grim turns much more likely.

Such possibilities should not trigger panic. They should however, focus the minds of politicians, bankers, and electorates everywhere. The problem with the leadership failures of the recent past is not just that they have slammed the world economy yet again, it is that they have made the future more dangerous than it was.

My fantasy is that recognizing this, President Obama would do as he once promised he would do, set personal ambition aside and announce he is not running for re-election. Instead, he would say that he wanted to shrug off the straight jacket of political considerations and focus exclusively on finding bi-partisan solutions to America’s problems. Perhaps he would make a bold gesture, like appointing Erskine Bowles and Alan Simpson co-secretaries of the Treasury or, at least, give both economic leadership roles on his team. Others in the Democratic Party can focus on 2012 and beyond. There are many qualified to lead. (Who knows, perhaps the next candidate we find can actually have experience with markets and with the rest of the world.) There are certainly plenty of Democrats who stand head and shoulders above the current, feeble array the Republican Party has rolled out, which will only grow more feeble with the likely addition of Rick Perry this weekend. And then Barack Obama, a decent, talented, and gifted man, can fashion a unique legacy for himself, as a public servant who actually thought his first duty was to serve the public.

But, I’ll admit it, that fantasy is less likely to occur than any of the other events I listed above.  And so I will continue to hope for the next best thing: The president and his fellow heads of state and government worldwide begin to govern as though they didn’t care whether they won re-election or not, but instead as though their top priorities was ro

Poorer Nations Are Leaders Toward Low Carbon Energy

Poorer Nations Lead Global Movement Toward Low Carbon Energy: Scientific American.

Poor countries have spent just as much as rich ones — and in the case of China, more — to develop low-carbon energy, according to a study coming out this week. Its conclusions could turn the conventional wisdom about the differences among nations over mitigation efforts on its head.

The report by former World Bank economist David Wheeler, who now leads the climate change division at the think tank Center for Global Development, finds that China spent 94 cents of every $10,000 of average income on clean energy between 1990 and 2008. The United States, by contrast, spent 44 cents of every $10,000.

Meanwhile, all other industrialized countries combined spent only a penny more per year than their less developed counterparts.

“We all had this idea that [climate change] was a rich country problem and that poor countries shouldn’t have to do anything until they get to a certain stage of development, and that rich countries need to make it worth their while. But what I had seen suggested [was] that poor countries were already doing a lot,” Wheeler said.

The data bore that out. Wheeler examined International Energy Agency data for 174 countries on investments in six low-carbon power sources (hydro, geothermal, nuclear, biomass, wind and solar) to find the incremental costs of clean power compared to a cheaper, carbon-intensive option like a conventional coal-fired power plant. He then computed the average income share in countries to compare how much people in poor countries are paying for carbon mitigation compared to those in rich nations.

“Lo and behold, you get a world in which the shares that poor countries have been devoting to low-carbon technologies over the past 18 years is really comparable to the rich countries,” Wheeler said.

The study comes as countries continue to debate whether to develop a new international climate change treaty. Developing countries, which currently are not obligated to curb emissions, have long argued that they should not be required to help solve a problem caused by industrialized nations.

Many maintain that they also have “atmospheric rights” — that is, the right to pollute — in order to develop. Wealthy countries, meanwhile, argue that fast-growing developing countries like China and India are not doing enough to mitigate emissions. U.S. lawmakers in particular have argued that cutting carbon would put America at a competitive disadvantage to China.

Developing nations attracted to hydropower
But the fact is, countries are working steadily to develop clean energy. And, Wheeler’s study argues, they’ve been doing so for a long time.

Since 1990, developing countries have accounted for 55 percent of the global increase in low-carbon energy generation, he found. China accounted for 15 percent of it alone.

In fact, because of the growth of hydroelectric generation in particular, developing nations like the Kyrgyz Republic, Bhutan, Mozambique, Paraguay and Zimbabwe crowd out the few top-spending developed countries like Iceland, Germany and Finland.

Tajikistan actually tops the list, spending $12.27 for the incremental costs of clean energy for every $10,000. But Wheeler noted that might be an anomaly because the country underwent a civil war. A push in hydro development in 1992-1993 might have been a restart of war-idled energy capacity rather than new development, he noted.

Iceland is the only high-income country in the top 10 list. With a gross domestic product per capita of $29,752, the country spends $11.56 per person annually — mostly on geothermal power. But the Kyrgyz Republic, with a per capita GDP of just $1,634, has spent only slightly less — $11.22 per person.

Wheeler said he purposely included the controversial energy sources hydro and nuclear. While environmental groups fighting for action on climate change don’t like to include those options, Wheeler said he felt it was important to look simply at what sources produce low or zero emissions. At the same time, he argued, despite the safety risks and environmental hazards posed by nuclear and large hydro, respectively, the climate would be in far worse condition had countries not developed those sources.

 

“They’re a huge part of this story,” Wheeler said. “If poor countries hadn’t gone down that road, our carbon emissions would be now far higher than they are, and it would be growing every day much worse than it is.” He also didn’t try to tease out a country’s motive for developing low-carbon energy, since in virtually every case, it had little or nothing to do with climate change.

Flying under the accounting radar
Derek Scissors, a research fellow in the Asian Studies Center at the Heritage Foundation, questioned whether looking at the past decades is a useful comparison, particularly for hydro development, since industrialized countries like the United States built their dams decades ago.

But he also objected to thinking about the climate debate, or the spending necessary to reduce emissions, in terms of developed versus developing countries. Rather, he said, the discussion should be among major emitters of the past, present and future.

“Why would we think that one country should spend as much on clean energy as another country? Why should a country with low emissions do as much?” he said. “It starts from a false premise that the discussion is developing versus developed, which is just another way of saying rich versus poor. But that’s not how to address the problem. That just immediately starts this as a redistribution effort.”

Wheeler said he also thinks the equity argument needs to be put to rest, but that countries like the United States need to realize that long-held arguments that China is not doing enough to mitigate greenhouse gas emissions don’t hold water. He noted that the 94 cents per $10,000 average income that China spent compared to America’s 44 cents looks like an even wider gap when the income is factored in. China’s average GDP per capita for that time period was $2,860, while the United States’ was $37,640.

“What I see is, I have a really rich country that seems to be spending less than 20 percent per unit of income that what China is spending. There’s no possible way I can judge that as reasonable,” Wheeler said.

Developing countries as whole, he said, “have been doing a lot all along. We just haven’t been doing the accounting right.”

* Countries’ spending on low or zero-carbon energy (hydro, geothermal, nuclear, biomass, wind and solar) from 1996 to 2008, calculated as a share of their average income.

Source: Center for Global Development.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500

China train crash blamed on signal design flaw

BBC News – China train crash: Signal design flaw blamed.

Serious flaws in a signalling system caused a fatal collision on China’s high-speed rail network, officials say.

Thirty-nine people died when a train ran into the back of another which had stalled on a viaduct near Wenzhou after lightning cut its power supply.

The system “failed to turn the green light into red”, said An Lusheng, head of the Shanghai Railway Bureau.

Chinese Premier Wen Jiabao, who has been visiting the crash site, vowed to “severely punish” those responsible.

Wen Jiabao held the news conference under the viaduct where six of these carriages came off during Saturday’s collision. He stressed that safety would be the absolute priority as China built its huge high-speed network. It is already the second-largest in the world and is set to be expanded.

Wen Jiabao, often referred to as “Granpa Wen”, is the soft face of the party. When there is a crisis or an accident like this, Premier Wen is the man with the common touch who deals with the public.

There was pressure on him to visit the scene. When asked why it took him so long to get to Wenzhou, he said he had been ill and his doctors had not wanted him to travel but he felt it was very important.

But still there is public anger here about the crash, which has raised safety questions about the whole of China’s high-speed network.

“The country’s development is for the people, so the most important thing is people’s lives,” Mr Wen told reporters at the scene.

“No matter if it was a mechanical fault, a management problem, or a manufacturing problem, we must get to the bottom of this.

“If corruption was found behind this, we must handle it according to law and will not be soft.”

Mr Wen earlier promised to take steps to improve safety on the high-speed rail network – one of the government’s flagship projects which it hopes highlights China’s development.

Six carriages derailed and four fell between 20m to 30m (65ft to 100ft) from the viaduct after Saturday night’s crash, which injured nearly 200 people.

The accident came just four years after the country’s first high-speed trains began operating.

Rail experts had warned against the rush to build the world’s longest and fastest high-speed rail network in record time amid safety concerns.

There are allegations that corners were cut during construction because of corruption, raising questions about infrastructure across the country.

This photo taken on July 24, 2011 shows workers clearing wreckage of mangled carriages after a Chinese high-speed train derailed Four carriages plunged from the viaduct

The BBC’s Martin Patience in Wenzhou says it is difficult to get to the truth because of a lack of transparency and accountability.

There is a real sense that things are perhaps being built too quickly and that safety is being jeopardised in the process, our correspondent says.

‘Public relations disaster’

Mr Wen’s visit to the crash scene comes amid growing public outrage at the accident.

Internet users and relatives of the victims have been angered by the government’s apparent unwillingness to answer questions about the crash.

This has led to accusations of government “arrogance”, amid suspicions of a cover-up.

The authorities have moved quickly to stem media coverage, urging reporters to focus on “extremely moving” stories, saying the overall theme should be “great love in the face of great disaster”.

Map

Chinese media have been ordered not to question the official line on the accident, but several newspapers have published editorials criticising the railway ministry.

In an unusually scathing editorial published in both its English and Chinese versions, the state-run Global Times on Wednesday said the government’s handling of the accident aftermath was a “public relations disaster”.

“The relationship between the government and the public is like that of a ship and water. Water can keep the ship afloat or sink it,” it said.

Some relatives of victims, who include two Americans and an Italian, have reportedly refused compensation and instead demanded to be given answers.

The accident is seen as a blow to China’s hopes of selling trains abroad in a bid to become a high-tech exporter.

Shares in Chinese rail and train builders have fallen sharply since the crash.

2% of GDP Would Create a Green Economy

Report Says Just 2% of GDP Would Create a Green Economy & Stop Poverty | Inhabitat – Green Design Will Save the World.

In a report released Monday, the United Nations Environment Programme outlined a sustainable public policy and investment plan that said just two-percent of the global domestic product could move the world from fossil fuel dependency to a low carbon economy. Currently, two-percent of the GDP is being spent on unsustainable practices like fossil fuel use, pesticide subsidies, and fisheries. By shifting focus, it is believed that the divergent approach in investment would kick-start a green economy and alleviate global poverty.

The two percent at hand amounts to approximately $1.3 trillion annually. According to the report, there are ten areas that need immediate green investment: small-scale agriculture, energy efficient buildings, eco-friendly fisheries, forestry, green industry, green transportation, improved waste management and recycling, low carbon energy, and sustainable water practices.

“With 2.5 billion people living on less than $2 a day and with more than two billion people being added to the global population by 2050, it is clear that we must continue to develop and grow our economies,” said UNEP Executive Director Achim Steiner in a press release. “But this development cannot come at the expense of the very life support systems on land, in the oceans or in our atmosphere that sustain our economies, and thus, the lives of each and everyone of us.”

If the two percent were put towards green investments, the report says the economy would grow at the same rate, if not faster, than it would under the current conditions — except the growth would be without the risks, shocks, and scarcities increasingly seen in the existing “brown” economy. The report indicates that the initial transition would cause a loss of jobs in some sectors, but it would eventually produce more than enough jobs to make up for any losses. The transition would also be a catalyst for growth in developing countries, where up to 90 percent of the GDP of the poor is linked to the environment or nature capital, like forests and freshwater.

The key to change lies in our governments. The report says that our political leaders need to create public policies that would generate and support a green economy by directing private investments toward green industry. Without the support of the government, any transition to a healthier, greener economy is unlikely.

The full report is available for download here.

WHY THIS MATTERS

The UNEP report reveals how little it would take for us to do the right thing and set us on a green track permanently. By shifting the focus of just two percent of the GDP, we would cut our collective carbon footprint in half, put fossil fuels behind us, and alleviate global poverty. In other words, we’d save the planet.

Via Treehugger

US science cuts pay for war – and we all suffer

US science cuts pay for war – and we all suffer – opinion – 26 July 2011 – New Scientist.

Osama bin Laden may be dead, but the horrendous cost of pursuing the “war on terror” may give his followers cause for celebration

WHEN Osama bin Laden was killed earlier this year, many commentators saw it as a turning point in the war on terror. However, a host of measures suggest that bin Laden’s goal – to strike a long-lasting blow to the system of government of the US and to the health and well-being of its citizens – may have been achieved.

Last month, the Eisenhower Research Project at Brown University in Providence, Rhode Island, released a report entitled “Costs of War“, which estimates the cumulative cost of the wars in Afghanistan and Iraq to be up to $4 trillion.

What has this vast amount of money achieved? Both Iraq and Afghanistan continue to rank low in political freedom, warlords continue to control much of Afghanistan, and gender and ethnic segregation in Iraq are now worse than they were before 2001.

At the same time, the US economy is in trouble. Unless the country’s debt ceiling is raised by 2 August, the US will default on several of its major financial commitments. Many of the key programmes that contribute to the quality of life of most Americans are under threat.

From a scientific perspective, the appropriations bills now before Congress suggest that the US’s dire fiscal straits will inflict long-term damage to its technical leadership.

The House of Representative’s Committee on Science, Space and Technology has recommended cancelling the James Webb Space Telescope, the successor to the fabulously successful Hubble Space Telescope, because of a cost overrun of $1.6 billion. If this project is cancelled, once Hubble reaches the end of its working life in 2014 we will lose our chance to witness the first moment in cosmic history when the sky lit up with stars, less than a billion years after the big bang.

Beyond the direct loss to science, we need to ask what the next generation of bright minds will lose. The remarkable images captured by Hubble have inspired a generation of people to dream about the universe and its myriad possibilities, and have doubtless inspired youngsters to consider a career in science.

For those of a more practical bent, funding for energy efficiency and renewables could be cut by a whopping 27.3 per cent. It is hard to imagine an applied research programme that is more relevant and important to the health and security of our society.

Cutting that funding is likely to have economic consequences too. In this highly competitive world, the country that leads the research and development in these areas will gain a huge advantage. One only has to consider the fraction of the US’s gross domestic product that resulted from R&D a generation or two ago into technologies ranging from the transistor to the microchip.

If, as a consequence of a decade of unprecedented military spending, we are prepared to give up our grandest intellectual dreams while at the same time cutting efforts to solve the chief technological challenges we face, have we not lost far more than we may have we won?

Lawrence Krauss is director of the Origins Project at Arizona State University in Tempe. His most recent book, Quantum Man: Richard Feynman’s life in science was published in March (W. W. Norton & Co)

High-speed trading algorithms place markets at risk

One Per Cent: High-speed trading algorithms place markets at risk.

Jacob Aron, technology reporter

Computers that buy and sell shares in a fraction of a second are in danger of destabilising stock markets around the world says Andrew Haldane, executive director for financial stability at the Bank of England. Speaking last night at the International Economic Association in Beijing, China, Haldane said that High Frequency Trading (HFT) firms were in a “race to zero” that could increase market volatility.

HFT algorithms can execute an order in just a few hundred microseconds, rapidly trading shares back and forth in order to quickly eke out profits from minor differences on the various exchanges. These trades are so fast that the physical location of the computers executing them becomes vital – even being a few hundred kilometres away from the exchange could mean missing out. It’s commerce far removed from any ordinary experience, as Haldane illustrated with an every day example: “If supermarkets ran HFT programmes, the average household could complete its shopping for a lifetime in under a second.”

Now it seems this lightning-fast trading could come at a cost. Haldane blamed HFT for causing the “Flash Crash” which occurred on US markets last year, with the Dow Jones losing $1 trillion in just half an hour. The event was marked by trading oddities such as management consulting firm Accenture shares falling from $40 to $0.01, while auction house Sotheby’s rose from $34 to $99,999.99 – the lowest and highest values permitted by HFT algorithms.

Haldane said that the latest research shows that while HFT increases liquidity when markets are functioning normally, it has the opposite effect during more troubled times. He also built on work by Benoit Mandelbrot, the mathematician famous for inventing the word “fractal” for patterns with self-similarity. Mandelbrot showed that stock trading can also display fractal behaviour, and Haldane last night said that HFT algorithms cramming more and more trades into this fractal structure could lead to the kind of pricing abnormalities seen during the Flash Crash.

The solution? Introduce new rules to limit the speed of HFT. “Flash Crashes, like car crashes, may be more severe the greater the velocity,” said Haldane. “Grit in the wheels, like grit on the roads, could help forestall the next crash.”

5 signs that Mexico is losing its drug war

5 signs that Mexico is losing its drug war – The Week.

In Mexico, drug violence has become a routine part of the news. But some moments stand out as particularly frightening

Marisol Valles Garcia is Mexico's youngest police chief and works in a town just 60 miles from Ciudad Juarez, the country's most violent city.

Marisol Valles Garcia is Mexico’s youngest police chief and works in a town just 60 miles from Ciudad Juarez, the country’s most violent city. Photo: Corbis SEE ALL 14 PHOTOS

In the four years since Mexican President Felipe Calderon launched a crackdown on drug cartels, clashes between powerful drugrunners and Mexico’s police have skyrocketed in frequency and intensity. Since 2006, over 28,000 people have been killed, including 2,000 police officers — and the carnage shows no sign of slowing down. Calderon remains optimistic, at least publicly, but faces mounting criticism over the violence. Here are five especially troubling signs for what many consider a failed war:

1. A town’s entire police force quits
No officers were injured when gunmen fired more than 1,000 shots at police headquarters in Ramons, a small town in an area “torn by fighting between the Gulf and Zetas drug gangs.”  But the attackers (who tossed six grenades for good measure) made their point — all 14 of the town’s police officers promptly quit. Their new headquarters had opened just three days before the attack. (Watch an AP report about the police force)

2. The college student who became chief of police
In the small, crime-ridden town of Praxedis Guadalupe Guerrero, nobody was eager to serve as police chief for understandable reasons — the last person who took the job was killed in June. So when 20-year-old criminology student Marisol Valles Garcia volunteered, she made international news. “I took the risk because I want my son to live in a different community to the one we have today,” Guerrero said at a press conference.

3. Cops accused of killing their mayor
It has become an all-too-common story in Mexico: A public official is murdered, and a security guard or police officer turns out to be involved. When Santiago mayor Edelmiro Cavazos was killed in August, six city police officers, including one posted at Cavazos’ home to protect him, were quickly arrested and accused of helping a drug cartel pull off the crime. It was hardly an isolated incident, since most of Mexico’s 430,000 officers “find themselves outgunned, overwhelmed and often purchased outright by gangsters.”

4. A police chief is decapitated
In early October, Rolando Flores, the lead investigator on a high-profile case involving two Americans, was murdered, and his severed head was left in a suitcase in front of a military compound. In a sign of how routine such incidents have become, officials weren’t sure if the decapitation was related to the Falcon Lake case or to other cases Flores was investigating.

5. Killers target rehab centers
Not content to kill judges and mayors, gunmen appear to be going after former colleagues who may be trying to reform themselves. Last Sunday, gunmen lined up 13 recuperating addicts and executed them; two days earlier, another 14 people undergoing rehab had been gunned down. Such attacks have occurred before, but their rising intensity “could signal the lengths to which Mexico’s drug lords will go to prevent reformed addicts from giving information to authorities.”