China's stock market crisis and recycling Trend #4: Market volatility and emerging business models

I have to thank you for the enthusiastic emails I received for the previous 3 blogs on future trends for recycling and waste management - however, it will be very useful of some of you would publish their views as comments, rather sending them directly to me - in any case it is obvious that we need a lot of discussion about it, so all the comments are more than welcomed and useful. Back to work now.

What is China's interest rate?
Will China lower interest rates?
What interest rate do we pay China?
Why is China cutting interest rates?
Why doesn't China want the U.S. to raise interest rates?

All those questions are on top of each and every business discussion those days. However, China's and India' growth provided the background for the viability of most of the recycling systems worldwide. Will it still be the case? 

Back to school again - we need to study the lessons taken by the recycling markets and reimagine the way forward.

Let's move to trend #4: Market volatility and the emerging new business models.

At the same time Fitbit arrives to India, creating the background for wearables recycling programs, there is a growing pressure to the viability of recycling programs due to the following factors.

1. The past decade was characterised by the biggest commodity boom in history, fuelled by rapid Chinese and Indian growth. But the market has shifted and structural issues are now being exposed. High material prices are no longer fundamental for the viability of recycling viability of recycling services.

2. Falling commodity prices at the back end are enabling manufacturers to be more demanding with regard to their inputs. This means that prices are down and at the same time quality demands are going up. The mismatch between these two ends of the recycling supply chain is squeezing everyone in between.

3. Especially in EU, "this fundamental market shift has shown how exposed operators are to volatile material prices. In the highly competitive environment of the waste service industry, where margins are bid away to very low levels, it doesn’t take much of a fall in prices to erode that safety net and put contracts at risk" as it was explained by ESA's executive director.

Of course the problem is not simply European, it becomes global as there similar signals from USA recycling market too.

If you add on top of this, the long-term trends for energy prices, then there is a clear conclusion: the recycling and waste management industry have to re-invent their cost structures and business models, they have to rethink profitability, risk-sharing and diversification in order to create viable businesses on the long-term.

At the same time UBER fights for its business models in Rio de Janeiro, the erosion of the current dominating business models comes from another source too. And this is the emergence of new business models that stimulate circular economy approaches, like sharing practices, replacing ownership with service models etc. Those business models are generated from new answers to five simple questions:

• How can we design our products with asset recovery in mind?
  How can we develop product lines to meet demand without wasting assets?
  How can we source material in regenerative loops rather than linear flows?
  How can we develop a revenue model that protects value up and down the chain, and
  How can we get our customers to cooperate with us?

So, finally the conclusion is simple but crucial. Both recycling market volatility and the emergency of circular business models demonstrate the importance of well-designed and adaptable business models for the long-term viability of successful waste management and recycling systems. At the same time, there is a growing emphasis for high value for money ratios and functional but still low cost solutions especially in the developing world. It seems that the recycling and waste management industry must reinvent itself - why not?

Circular Economy needs more Waste Management than linear one!

While the circular economy saga is becoming mainstream (I have already written my concerns regarding circular economy in this blog), the future of waste management is somehow blurred between circular economy and zero waste concepts. And there are many people that believe that there is no future for the waste management industry as circular economy approaches will be gradually expanded and cover the most important economic sectors.

There is nothing as misleading as this belief and allow me to explain why. First of all, the circular economy concepts, as well as the zero waste approaches, require much more and not less waste management. Their implementation requires advanced management of multiple streams of materials, before they become waste but after they have been discarded from the main production. Those streams must be as clean as possible in order to have high added value, so advanced treatment for removal of residuals will be required, in one or another way. And of course, there will be always residuals looking for appropriate final sinks, including energy recovery where this is possible.

A second reason is less obvious. Circular economy concepts are fueled (besides other) by the problems and challenges that were identified during decades of waste management progress, especially in developed countries. Gradually, through positive and negative experiences, we realized that no matter how advanced would be the waste management and recycling progress, it is the production and consumption of products that finally determine the waste management dynamics and the increasing waste volumes. But no matter how circular the economy will be, since production and consumption of goods as well as their diversification will continue to rise, there will always be new waste management problems and a permanent dynamic towards cleaner, more efficient, faster and safer waste management. I am sorry but waste is simply a daily product of the urban metabolism…

If those reasons are not enough to persuade you that circular economy needs more (but also better and different) and not less waste management, have a look at Veolia’s contribution to circular economy’s discussion (see at http://www.veolia.com/en/veolia-group/media/news/circular-economy-sustainable-opportunity ).  It is more than clear that one of the biggest waste management multinationals faces circular economy as an opportunity and not as a threat. And it is not the only one, because there are more good reasons for such an approach.

Circular economy concepts, if successfully applied, will create a landscape where waste and resource management will be integrated not only on global, national or regional level but also on each and every supply chain. This means that waste management will be internalized in the relevant industrial processes, as a key-component of them.  This is a new business challenge for an industry that knows how to make money from residual streams. And for some people, the business case will be similar to the software. Software development and applications are required in each and every modern industry and they are becoming a core element of it – this is a blue ocean for the software industry, despite the fact that most of the big companies have internalized their software applications and they have their own IT departments.  A similar case should be expected for waste management too.

Last but not least, it is always good to remember that the waste management sector makes already an important contribution by delivering closed loops for specific materials, recovering energy potential and ensuring safe disposal for the non-recyclable part. We are far away from being “as good as we can”, but I believe that the sector’s resource added value is rather underestimated. It is time to justify it in a better and more integrated way.

So keep your eyes open, because within next months, ISWA’s Task Force on Resource Management will publish its report on resource efficiency and the role of the waste management sector. For a starter have a look at http://www.iswa.org/iswa/iswa-groups/task-forces/task-force-details/tf/show_detail/task-force-on-resource-management/

For the main course, join ISWA 2015 conference in Antwerp (http://iswa2015.org)

D-waste is here - Join us

Dear friends and colleagues

I am really happy to inform you that something I was dreaming and planning for almost two years, something that I have shared with a lot of you as an idea, it has finally been realized.

D-waste is here and you can see it at www.d-waste.com. D-waste is a global initiative that aims to make waste management easily available, with just one click, to everyone.  D-waste is an effort to upgrade waste management in the global agenda and increase the awareness about it. This is why our moto is “Waste Management for everyone” (please read the relevant report).

 And when we say everyone, we mean it. This is why D-waste will sponsor eight (8) scientists from developing countries to attend the ISWA 2012 World Solid Waste Congress. You have just to fulfill the application available in the web-site– the beneficiaries will be announced until the end of June.

D-waste is a call for action in order to create a global interactive network of waste management experts that will circulate know-how in all different formats. It is a dream, to create a massive collaboration through the Web which will be capable to overlap the barriers for sound waste management, especially to the countries that suffer more.

Visit the web-site and you will understand more about D-waste.

You can download reports and presentations (some for free, others for a price). You can have applications for your mobile phones (currently for the Android market but very soon for the i-phone market too). You can play with our inforgraphics (remember you need double click). You can ask for specific services, including project support, mentoring and helpdesk.

But most importantly you can Ask or Publish whatever you require or whatever you have to offer. And if you like the idea and the concept, please Join us, as an expert, as an author or as a blogger, we are looking for partners worldwide.

I am waiting for your feedback - I am sure that we have a lot to share - and soon, D-waste will have some surprises…For free and for everyone.

Join us at this new but promising adventure - after all D-waste is a very interesting experiment.

It is an experiment that aims to prove that the meaning of sustainability must be reconsidered, for both the world and the enterprises. Let’s D-waste…  

Let's speak about Waste To Energy...

Since I joined ISWA, almost 13 years ago, one of the best things that ISWA offered me is the opportunity to meet some guys like the one who is interviewed today, Mr. Hakan Rylander, CEO of the SYSAV Company Group. I would say that SYSAV is a role model company in WtE so I consider a visit to its web-site (www.sysav.se) as a very intersting one.

Hakan is my good friend and one of the guys that I really admire - sometimes I wish to become like him when I grow up and become more mature. For the time being I appreciate both his straight forward way as well as the fact that he is the type of "better do it than say it". As for his know-how, he is one of the most experienced WtE engineers I know, involved in all different phases and aspects of a WtE facility. 

 Besides being ISWA's president between 1996-98, Hakan has held many other key-positions e.g. Chairman of the ISWA WtE Working Group, Swedish Representative in the Nordic Association of Waste Management, Chairman of the Scania Society of Engineers. Currently Hakan is also running the R&D Committee of Avfall Sverige. So here comes his interview, I am sure you will enjoy it. Hakan, thanks a lot for your thoughtful answers...

 “Hakan, you are working for 40 years in the waste management industry and you have passed from several crucial positions, including your ISWA presidency few years ago. So I would say that for me and   my readers this a perfect opportunity to utilize your broad experience and address some key-issues that are discussed worldwide. So let's start with your operational experiences running one of the best incinerators in Europe. What were the most difficult problems you faced?

I have actually been running two large waste-to-energy plants, one in Gothenburg between 1993-96 and now the large one here at Sysav in Malmö.  Both plants are working in an excellent way, where we in both cases focused on a “conservative” concept, with a well established and proven technology, with steam figures of 400 degrees centigrade and 40 bars to minimize the risk for corrosion. Let us focus on the Sysav-plant, which I know the best today. When building the two new furnaces we put a lot of effort and time on the specification of requirements to be fulfilled by the suppliers, with a high accessibility, a high reliability and a plant easy to maintain. We also looked for the best and reliable flue gas cleaning system to be able to meet with all emission directives on a European and National level with a very good and safe margin in order to avoid all anxiety from the public and the neighbours of the plant. And of course, to an acceptable and low price. The big challenge was to "marry" the three big suppliers of boiler, flue gas cleaning and turboset so the deliveries fitted in time to each other and so we could handle the strong wind of southern Sweden when doing the high-raised installations.I think we managed very well in our efforts.

We have permission to incinerate 550 000 tons annually and during the last years we have been incinerating around 549 000 tons annually, we don´t cool off any heat at all. All produced energy is utilized as heat and electricity. The maintenance works as planned, taking place in the summer time when there is a low demand for heat. The emissions are far below the permitted levels. The big challenge when constructing and buying the new furnaces was to get an efficient, reliable plant to an acceptable price and we managed. Our gate fee is very competitive.

We didn´t have any problems with the public opinion when building the two last furnaces. The big problems came up already in 1973 when building the first two furnaces. There had never been any waste-to-energy plants in the Malmö-region before that and the plans and the building of a waste incineration plant caused a lot of objections and discussions from the public, NGOs and neighbours. Finally, Sysav got the permission and after that we have not had any problems. That is due to the very good results we have achieved in producing and delivering heat to the district heating system of Malmö and the very low emissions from the plant. When asking for permission for the two new furnaces we had an excellent reference in the two old ones. We have also all the time been very open in our information about the operation and the results we have achieved. We also invite people to visit our plant to see what actually happens and take place in a waste-to-energy plant.

To be successful when working with the public opinion I am completely convinced that you have to have an early, very honest and open dialogue with them. Don´t try to “hide” anything. Invite them to participate in the process and keep them informed. Present good references.

So what is the role of an incinerator in an integrated waste management system? Is it in competition with recycling or no?

Sysav WtE Plant

The answer is very easy to be given. There is no competition at all between recycling of materials and waste-to-energy, on the contrary the two methods complement each other.

The waste problem can´t be solved by using one method, you have to use them all – reuse, recycling, biological treatment, waste-to-energy and landfilling – in accordance with the EU Hierarchy.

Within Sysav we are working with all these methods. Last year we received 903 000 tons of different kinds of waste, 98% were recycled as materials and energy, only 2% was landfilled (22 000 tons). Less than 1% of the household waste was landfilled. We have by working in this way prolonging the remaining life time of our landfills with about 30 years. I have very strongly during the years believed that this is the correct way of dealing with waste as long as it exists, and I think the Sysav-results proof that it is a successful way.

Is incineration applicable to developing countries? Which are the conditions for a success?

Incineration should not be the first option in developing countries. It must start with a well managed landfill with methane gas recovery, material recycling with source separation and biological treatment of food waste with production of biogas and a bio-fertilizer. Such a concept would be the best for the environment and for the climate. With the present technolgy within waste incineration a lot of heat has to be cooled off in developing countries. You can of course produce electricity with higher effiecency in comparison with recovering heat as well as electricity as we do in the Nordic countries, but still a lot of heat is cooled away. The situation will improve significantly if you have a neighbouring industry or any other big activity/business with a demand for steam or heat.

Technically speaking, what can we expect from the technology in terms of improvements?

The big technical challenges with the present technology are today three and where we will improve:

- to reduce and minimize the amount of bottom ash. After the waste-to-energy process there still is about 20% of bottom ash as a residue. That means that there still is too much of unburnable waste coming to the waste-to-energy plants. We have to significantly reduce that amount to be more efficient in recovering energy and minimize the environmental problems of the residues.

- to develop a safe and environmentally correct way of final handling of the flue gas cleaning residues and to recover as much as technical and economically possible of the metal content in these residues and in the bottom ash

- to increase the electrical efficiency in the waste-to-energy plants. With high prices for electricity the power production should increase. Based upon some successful cases from some new European waste-to-energy plants. I would not hesitate to increase the steam figures above 400 degrees and 40 bars when building a new plant.
Last but not least, in a recent discussion I heard, probably for the 100^th time in last two years, that incineration is dead and that gasification and plasma pyrolysis will soon substitute all incineration plants. What is the current status of those technologies? Are they applicable for Mixed MSW? Are there commercial applications and operational experiences? After all,  is it something we can trust?

6.      A lot of people say they are promising and they are more environmental friendly than incineration...

Sysav WtE Plant 

Well, I guess I have heard the same thing at least as many times as you Antonis. 

I remember when I joined the business in the 1970-ies that there was a big belief that gasification, pyrolysis and the plasma technology would be the “salvation” of the waste problem. A number of companies introduced gasification and pyrolysis technologies, just slightly different from each other. All the different methods had worked in a very good way when testing them in a small scale, feeding the reactors with a small, very well prepared amount of waste each time. The problems came when scaling up the technology. 

A number of plants were built in Europe and a number of efforts were done to successfully scale up the technology. However, it didn´t work anywhere unless you had a very very homogenous input of fuel to the reactors. Waste is not a homogenous fuel. It has so far turned out to be too heterogenous to be able to treat in a gasification or pyrolysis process, irrespective of how you pre-treat the waste. It is absolutely not applicable for mixed MSW with today's technology. Another very negative factor is that the energy balance very often has turned out to be negative.

It would, from an environmentally point of view, be an excellent method if it worked, with low emissions and with a very small and environmentally safe residue, but unfortunately the situation today and the experiences are the same today as almost 40 years ago, even if there have been and still are efforts to introduce gasification and pyrolysis on the market.

When planning for the two new furnaces in the Sysav-plant there were proposals and some efforts that we should change from conventional grate incineration to gasification. I said absolutely “No”, but to be fair to those who believed that gasification was the best technology we decided to carry out a study and a comparison between the two technologies. The answer was very clear: gasification would result in a negative energy balance. I am happy to say that we made the right decision, our results and experiences from the grate technology gives the answer.

I absolutely don´t want to be negative, it would be fantastic if the gasification and pyrolysis technology will develop in such a way that you can use it for MSW , with a clear positive energy balance and working in a safe way for those working at the plant.

I remember when I as a young person in the waste business, full of belief in new methods and technologies, in the middle 1970-ies participated in a very good conference in Antwerp about waste management. There was a whole session about gasification and pyrolysis and I was full of enthusiasm, expecting a lot from the different presentations. On the way in to the conference room I walked beside an older gentleman and colleague from Germany. I told him about my expectations and he looked very friendly upon me telling me that he had started to work with R&D within waste management already in 1922 at the Batelle Institute in Frankfurt, and the task was to gasify/pyrolyse waste in a better way than could be done in a waste incineration plant. He told me that they without any success had been trying to do so and that he still had very little faith gasification/pyrolysis could be developed and turn out to be a successful technology for waste. 

I was of course very disappointed to hear this, but still believed it was the technology for the future handling of waste. The bad experiences coming up very soon after that conference and all the failures and unsuccessful efforts since then has made me very skeptical.

Unfortunately, I believe there is a long way still to go, but we shouldn´t give up our efforts."

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.”

Emerging waste management systems: ISWA/APESB conference in Angola, June 25-28, 2012

We are all aware of the importance of waste management in developing countries. Even more, we are all aware of the fact that the countries who need desparately appropriate waste management services and infrastructure in order to provide an elementary level of health and environmental protection are the ones who do not and sometimes can not have them, because they are trapped in the environment - poverty nexus.

But this has already started to change in Africa.

I was very glad to join efforts with my friend Mario Russo (the actual leader of the initiative) and other friends worldwide for the first ISWA event in Africa.

 Lobito, a beautiful city of the Benguela Province of Angola hosts the first International AFRICA Sustainable Waste Management Conference, an event organized by ISWA together with APESB (Association of Portuguese Sanitary and Environmental Engineering) and CPLP (Community of Portuguese Language Countries) with the high sponsorship of the government of Angola. It is the first time that an event in this field is organized by ISWA in Africa. It is an opportunity to share experiences with African technicians and decision makers helping them to search out for appropriated solutions for various and specific cultural, finance and technological contexts.

Angola is one of the most important countries of Africa located on the West coast of Southern Africa. It extends over an area of 1 246 700 Km².

The economy of Angola is based in oil production. In fact, this sector makes up over 90% of the Country’s exports. Angola is currently the second oil producer of Africa with 1.8 million b/d output, and it is expected that by next year it will overtake Nigeria, with a current output of 2.3 million b/d. Second to oil, diamonds are Angola’s main export product. The country is growing up more than 7% per year and many investments are announced by government in the waste sector, sanitation and construction sector.

Lobito is an important city in the Angolan context, quite calm safe and nice city with about 450.000 inhabitants. Located in the center of the country, is a very touristic city, with wonderful beaches and surroundings. Near the city, about 17 km, Benguela is the capital of the province, also a nice city. Both cities were improved related to accommodations and other touristic infrastructures due to the organization of the CAN 2009 (African Football championship) by Angola and are ready and enthusiastically to receive this important congress.

Join us for this interesting event, definitely you will meet very interesting people and a state - of the - art scientific program. For more details please visit the conference's web-site Africa Sustainable Waste Management Conference

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”.

Marine Litter: not just an environmental threat but an economic catastrophe too

Source: Ecopaparazzi

I am sure that everyone knows about the problem of ocean plastics. This is one of the most important global waste management problems. Just think about it for a while. Here are some facts:

• The average concentration is estimated around 46.000 plastic pieces/ sq. mile

• There are cases where plastic waste is 6 times more than the plankton 

• It is estimated that 10% of the global plastic production ends up in the ocean  

• It is considered that there are more than 7.000.000 tons of plastic floating around the world 

The vast majority of the ocean plastics originates from the land activities and not from the sea transport. And a big part of it is a kind of leak from advanced waste management systems, like the USA and  the Japanese one.

Few years ago, during a key-nore lecture in 2009 ISWA's conference in Lisbon, I concluded that the problem of ocean plastics is an indicator of our global inefficiency to manage waste in an environmental sound way even in what we consider advanced waste management systems! And this becomes more and more true, as the time goes by without any actual solution to that problem (for more see the 5gyres website). 

But now, there is evidence that ocean plastics and marine litter are not onluy a serious environmentla threat bot also an environmenttal catastrophe!

A recent study (McIlgorm A., Campbell, H.F., Rule, M.J., 2011, The economic cost and control of marine debris damage in the Asia-Pacific region. Ocean & Coastal Management. 54: 643-651) has now estimated that marine litter in the Asia-Pacific region is likely to cost over US$1.26 billion per year in damage to marine industries.  

The study focused on the economic effects of marine debris in the Asia-Pacific region and calculated the cost of damage to marine industries for the 21 economies in the region. Marine industries (shipping, tourism and fishing) are estimated to be worth 3% of GDP for this region and, based on available statistics from Japan, it is believed that 0.3% of marine sector GDP is lost through debris damage. For example, if floating objects become entangled in ship propellers, or engine cooling systems become blocked, time available for fishing is reduced, while maintenance and repair costs increase. The tourism industry can also suffer if littered beaches deter visitors or development.


Based on these assumptions, the study estimated the cost of damage to marine industries to be US$1.26billion per year. This is very likely to be an underestimate as data on marine debris are lacking. However, it clearly highlights the significance of the issue. Debris is also harmful to wildlife, and can therefore reduce ecosystem services - this is another important indirect cost to consider, but as there is presently no market value for these services, the study did not calculate these costs.


Further calculations suggest that the cost of clearing up plastic waste in this region, whether at sea or on beaches, amounts to $1500 per tonne of waste, on average, although costs of individual clean-ups vary considerably ($100-$20,000 per tonne) depending on the type of waste and method.


The costs of damage and clean-ups need to be weighed up against the costs of prevention, say the researchers, and setting a policy target for achieving an optimal level of waste at sea would be more economically feasible than a zero waste target. 

Community-based voluntary approaches, such as anti-litter campaigns, are also popular, but the study argues that greater efforts are needed to change public behaviour. Market-based instruments are less well used in marine litter prevention, but the study suggests they could play a role in some cases. Possible instruments to reduce overall rates of waste production include deposit-refund schemes, taxes on plastic goods to discourage purchase, and encouragement of recyclable packaging.