Coming back from Haiti

Sometimes photos say as much as thousands words. Here are some photos form Port Au Prince, the capital of Haiti. I uploaded not the worst as I saw in Port Au Prince and not the best of course.
As IDB colleagues told me, a lot of the disaster waste has been removed and the situation in collection of waste and cleaning - beautification of the city has been recently improved.
However, despite recent imrpovements, the situation remains very risky for the public health and it seems that there is no easy way out, due to several political, insitutional and of course  economic - financial barriers.

 The conditions I met in Port Au Prince, an urban complex of more or less 2,5 million people, are probably better that the rest of the country, while some other cities like Cap-Haitien and Gonaives are facing much more serious waste collection and disposal problems.

Scavenging, as it is obvious at the photos, is an activtity for thousands people in Port of Prince, not only around the landfill but also in many small and bigger waste disposal points within and around the city.

 However, plastic bottles are almost 100% recycled, due to a local industrial firm which has developed a relevant technology.

The same is true for the plastics and metal pieces that are found within the debris waste. It is supposed that within next 6-10 months all the debris waste will have been removed, although the standards for their current disposal are not always suitable. Soon I will have more information about it.

Last but not least, it seems that the main problem related waste management is a cohesive strategic approach that will unify all the involved parties (goverments, donors, banks, NGOs etc.). Although IDB has started a valuable project to rearrange waste collection, provide institutional development and radically imporved waste disposal with a new sanitary landfill, several local conflicts and controversial strategies create at least barriers and serious delays.

Next days I will write more details about the Troutier dumpsite and the informal sector there. Until then, I ask everyone to think more about it. Can we do something for Haiti? Can we support a waste management change? And how this could be done? 

Are we heading towards a Carbon Bubble?

It seems that there is a growing doubt regarding the efficiency and the results that will be achieved through the Carbon market.

Even worst, recent findings document that there is a potential for a Carbon Bubble which will have tremendous negative effects to carbon trading and subsequently to the efforts for Climate Change abatement.

Here are some of the latest developments, as they are described in the Carbon Tracker report available at the relevant web-site. 

The Carbon Tracker initiative is a new way of looking at the carbon emissions problem. It is focused on the fossil fuel reserves held by publically listed companies and the way they are valued and assessed by markets. Currently financial markets have an unlimited capacity to treat fossil fuel reserves as assets. As governments move to control carbon emissions, this market failure is creating systemic risks for institutional investors, notably the threat of fossil fuel assets becoming stranded as the shift to a low-carbon economy accelerates.

According a research made by the Potsdam Institute, in order to reduce the chance of exceeding 2°C warming to 20%, the global carbon budget for 2000-2050 is 886 GtCO2. Minus emissions from the first decade of this century, this leaves a budget of 565 GtCO2 for the remaining 40 years to 2050.

But the total carbon potential of the Earth’s known fossil fuel reserves comes to 2795 GtCO2. 65% of this is from coal, with oil providing 22% and gas 13%.

This means that governments and global markets are currently treating as assets, reserves equivalent to nearly 5 times the carbon budget for the next 40 years. The investment consequences of using only 20% of these reserves have not yet been assessed!

The fossil fuel reserves held by the top 100 listed coal companies and the top 100 listed oil and gas companies represent potential emissions of 745 GtCO2. This exceeds the remaining carbon budget of 565 GtCO2 by 180 GtCO2.This means that using just the listed proportion of reserves in the next 40 years is enough to take us beyond 2°C of global warming. On top of this further resources are held by state entities.

 Given only 20% of the total reserves can be used to stay below 2°C, if this is applied uniformly, then only 149 of the 745 GtCO2 held by listed companies can be used unabated. Investors are thus left exposed to the risk of unburnable carbon. If the 2°C target is rigorously applied, then up to 80% of declared reserves owned by the world’s largest listed coal, oil and gas companies and their investors would be subject to impairment as these assets become stranded.

The top 100 coal and top 100 oil & gas companies have a combined value of $7.42 trillion as at February 2011. The countries with the largest greenhouse gas potential in reserves on their stock exchanges are Russia, (253 Gt CO2), the United States, (156.5 Gt CO2) and the United Kingdom, (105.5 Gt CO2). The stock exchanges of London, Sao Paulo, Moscow, Australia and Toronto all have an estimated 20-30% of their market capitalization connected to fossil fuels.

The UK has less than 0.2% of the world’s coal, oil and gas reserves, and accounts for around 1.8% of global consumption of fossil fuels. Yet the CO2 potential of the reserves listed in London alone account for 18.7% of the remaining global carbon budget. The financial carbon footprint of the UK is therefore 100 times its own reserves.

London currently has 105.5 GtCO2 of fossil fuel reserves listed on its exchange which is ten times the UK’s carbon budget for 2011 to 2050, of around 10 GtCO2. Just one of the largest companies listed in London, such as Shell, BP or Xstrata, has enough reserves to use up the UK’s carbon budget to 2050. With approximately one third of the total value of the FTSE 100 being represented by resource and mining companies, London’s role as a global financial centre is at stake if these assets become unburnable en route to a low carbon economy.

The Carbon Tracker report mentions that “In the past decade investors have suffered considerable value destruction following the mispricing exhibited in the dot.com boom and the more recent credit crunch. The carbon bubble could be equally serious for institutional investors – including pension beneficiaries - and the value lost would be permanent”.

The authors believe (and I also share the same opinion) that today’s financial architecture is not fit for purpose to manage the transition to a low-carbon economy and serious reforms are required to key aspects of financial regulation and practice firstly to acknowledge the carbon risks inherent in fossil fuel assets and then take action to reduce these risks on the timeline needed to avoid catastrophic climate change.

They also add that “The regulatory regimes covering the capital markets need realigning to provide transparency for investors on the assumptions behind valuing unburnable carbon. With the global economy following the fortunes of the financial sector, it is essential to create capital markets which are robust enough to deliver an economy which can prevent dangerous climate change. Unless a more long-term approach is required by regulators, the shift in investment required to deliver a low carbon future will not occur.”

After – tsunami waste management: a global problem

We are getting close to March 11, 2012, the first anniversary of the earthquake and tsunami that devastated Fukushima, Japan. Unprecedented pictures and videos are definitely still through our eyes and minds whenever we remember the M 9.0 earthquake that hit the coast of Honshu, Japan's most populous island near Sendai, the capital city of Miyagi Prefecture, on March 11, 2011 at 05:46:23 UTC (roughly 231 miles Northeast of Tokyo).

More than 16.000 dead people, hundreds of billion dollars infrastructure damages and a very serious leak of nuclear radiation from the Fukushima nuclear plant were the main direct consequences of this catastrophic event.

From a waste management point of view, there is still a huge problem regarding the million tons of waste, mainly debris but including a lot of hazardous waste too, that were created during the tsunami strike. Just to have an idea of the disaster, only in Sendai city there is more than one million tons of waste wiring to be removed and managed during the next 3 years. The cleanup is expected to cost at least $1.3 billion!

Just imagine the overall quantity of debris is expected to be more or less around 25 million tons. As for the overall cost, it is expected to far exceed the $3.2 billion required to dispose of 15 million tons of debris in the Japanese city of Kobe after its 1995 earthquake.

A second problem, with really global dimensions is related to the mass of debris that was washed out to sea as floodwaters receded from the land, and some of that wreckage continues to float around the ocean.

According to a recent report by the Hawaii-based International Pacific Research Center ( IPRC), so far, the debris field has spread in an area that is approaching 4,000km by 2,000km.

It is estimated that more than a million tons of waste are floating and most of it is headed eastwards, moved by the Kuroshio Current, the North Pacific equivalent of the Gulf Stream in the Atlantic.

IPRC creates daily updates of the debris movement through Pacific Ocean(see tracking debris).

 Updates are provided by extensive modeling work led by Nikolai Maximenko. According all estimations more than 90% of the tsunami debris that has not sunk will move into the North Pacific "Garbage Patch", a long-lived circulation of floating rubbish trapped by the North Pacific Gyre.

I think that there are three comments, related to waste management that we can make in the aftermath of the Japanese tsunami.

First, although in Japan there is one of the most advanced waste management systems in the world, current systems and technologies were simply inappropriate to manage the astonishing quantities of waste produced by the tsunami.  

Second, please imagine what will be the consequences if the earthquake target was not Japan, but another country with less technologies and resources available, maybe characterized by poverty and low living standards. And definitely, such disasters can be also produced not only by earthquakes but from extreme weather phenomena as well, as it is the aftermath of the New Orleans’ disaster.

Third, the floating tsunami debris is one more alarming signal for the need to manage the ocean garbage problem. If we simply wait for a magic solution that will suddenly appear, the problem will be more and more difficult to be solved and the cost will be really prohibitive.

It seems that we need to do much more in order to create waste management emergency responses to events that create really global impacts! The global waste management community has to start an intensive collaboration in order to create networks and cooperation patterns that will allow the management of debris in such extreme phenomena and not only. The only thing that will be an appropriate response to the gigantic natural forces that create such disasters is the power of the massive collaboration of human beings, through a variety of different channels. Let’s do it…

Greek Rescue: are you kidding?

I closed my previous post (Greece’s collapse and the EU Titanic) writing that “As far as Germany, the captain of the Titanic, does not change its behavior, even if Greeks manage to do their best, they will manage to collapse as first class passengers”.

Well, I was wrong. According the discussions between troika and the greek goverment even if Greeks do their best they are going to collapse in extreme poverty. Because here are the terms and conditions offered by Germany (and consequently EU) and IMF (apologies for not listing other actors like the French and the Dutch prime minister – they are simply members of the cast with secondary roles).

The rescue package consists of a new 130 billions € loan, which will replace the almost 80 billions € that will be cut by the “haircut” applied to private sector debt holders. Actually the Greek debt will be much higher as soon as the “Rescue package” will be agreed. Someone could say that’s fine because the new bonds will be with a better interest rate and with longer pay-back period. But this is just the top of the iceberg, because the new bonds will be ruled by the British Law and not (as the current ones) by the Greek law, which means that any haircut will be almost impossible. So Greece will exchange 80 billions € of debt controlled by the Greek Law with 130 billions € of debt controlled by the British Law!

Even so, I could discuss such an investment made by our European partners as a form of support to a struggling economy. But it is really disgusting to notice that during last 40 days, every time the Greek government was close to finalize an agreement with the so called Troika (EU, ECB and IMF representatives), the Troika put new terms and conditions, worst than it has asked 10 days ago.

Such a behavior can be explained in only one way:  it seems that Troika’s order was to test the limits of our society and make an agreement not as a partner but as a financial Dictator.

This has resulted to unbelievable terms and conditions offered and not negotiated. Here are some of them:

• 20% reduction of the minimum salary, which will drive in a downward spiral all salaries and will make recession much deeper
• 25% reduction in all pensions, which are already very low in most of the cases
• Massive and blind dismissals through the public sector which will boost unemployment from 18% to 25%

And the best: 95% of the new 130 billion € bailout will be used just to ensure pay-back of the new and the remaining (after the rescue) loans! Merkozy proposed that a specially supervised bank account should be used in order to ensure that no money of the bailout funds will be used for non-approved activities like pensions, education and healthcare system.

Well, I am not complaining – the blame is put firstly to the ridiculous and completely incapable Greek political system, but also to all of us who finally left our country to become a pariah like this. We have to find the way out of the crisis and we will do it, sooner or later. After all, we have survived during much more difficult periods and we still have huge resources of creativity and imagination. And last year, we managed to have a primary budgetary surplus, for the first time after many years.

Burning German flags
outside the  Greek  Parliament (7/2/2012)

But on the other hand, I do not believe that the only way out of the current Euro crisis is to drive some societies to collapse.  I wonder if the EU officers and politicians do understand that they create long-term anti – EU feelings and feed nationalist movements. I revolt when I understand that Banks are above all, the top-priority of the EU policy. And I understand that the recent humiliations against Greece are a clever way to draw our attention away of the real problem: the banking system that is the real cancer of Europe.

I believe that Greece has no other option than to make an agreement with its EU partners. This agreement will create huge negative long-term impacts to Greek society, but who knows, maybe EU policies will change later. If this will not happen, Germany and its colleagues create the playground to push Greece (and not only) out the Eurozone, in order to secure their economies.

I have to say that they will be proved wrong once again.

Two years ago, they fought against any “haircut” option. Now they are obliged to do it.

One year ago, they were predicting the success of the austerity programs applied to Greece, Portugal and Ireland. Now they admit that they are not enough and new rescue plans are required.

Few months ago, at the end of October 2011, they said (more or less) the crisis is over because they found out a long-term solution regarding Euro debt crisis. Two weeks later the markets sent Euro at the bottom and few weeks later France (and others) lost the AAA rating.

Simply, you can’t stop a fire just closing the door of the room which is on – fire.

As it was written recently (7/2/2012) in Spiegel:

“But it is already clear that this aid package will not save the country. It appears it will only delay a Greek insolvency -- and it will serve to create new hardships for the country's population. It is time for politicians to admit that their carrot and stick strategy has failed. The idea that the country can be freed from its debt quagmire though austerity programs and aid pledges tied to conditions just isn't going to work. It won't even work if private creditors forgive part of the country's debt”.

By the way, the title of the above mentioned article was “It's Time to End the Greek Rescue Farce”.