PNG Carbon Goldmine Concern

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Today’s Age report on Carbon Cowboys Riding High

THE Australian at the heart of Papua New Guinea’s carbon trading rush is entrepreneur and racing identity Kirk Roberts, who is believed to have convinced many tribal groups to sign their rainforests up for future use as carbon credits.

Mr Roberts, who runs his carbon operations through a company called Nupan Pty Ltd, claims to have power of attorney over 90 forestry deals, giving him control over land potentially worth tens of millions of dollars as carbon sinks.

We warned on this when we first heard that Jeffrey Sachs was giving PNG carbon sink advice (back in May). Anyone who has heard Prof Michael Hudson or read Naomi Klein’s Shock Doctrine understands what we mean.

The danger in signing away your full rights as a carbon sink custodian is that over time, the value of saving the planet will become more and more important. As the lungs of the planet, these ancient forests will become increasingly valuable. Why sell the carbon rights off now in total rather than lease out their sequestering capabilities over their lifetime? With a yearly lease, where the land is valued per annum, the local PNG tribes would get a share of the ever increasing value of these living treasures.

We have warned about the speculative nature of these new eco markets on the Renegade Economists podcast for many moons. This story is the dangerous outcome to the bankers bonanza opening up in green markets. Speculative middlemen will simply sneak in and claim the lion’s share of the profiteering made possible by the creation of ‘fee simple’ property rights (rather than ‘fee annual’ – defining yearly payments).

This REDD scheme will do little to reduce overall carbon emissions. Neither will carbon trading.

Stories are being leaked on how companies are setting up bogus refrigeration companies in India that use the worst possible emitting gases, then ‘reforming’ them towards less harmful gases as the cheapest carbon ‘credit’. Why not avoid the pain of nightmares from our future grandchildren by going to a carbon tax? Sorry speculators, you will have to do something productive!

See our other commentaries on carbon trading here

The earth’s bounty should be shared amongst all to create the equality of opportunity that we are hood winked into believing democracy delivers!

Fast Forward News #4

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Bear
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David Pecotic

Getting Any Logic from the Property Bulls and Spruikers is Almost an Impossible Task
[While the rest of the media and sundry commentariat is busy counting unhatched chickens, Money Morning revisits demand, supply and price and asks why a shortage of bananas is not like a housing shortage.]

Renters:Stop Walking on Egg Shells
[Interesting commentary on recent property trends]

It’s Hard Being a Bear (Part Two)
[Steve Keen continues on his theme: despite “green shoots” and “the recession that we didn’t have,” he similarly is still a bearish because the economists in the optimists camp are relying upon very bad economic theory. Almost everything economists believe is possibly true at the level of an isolated individual, but almost certainly false at the level of an economy.]

Housing recovery hopes dashed
[Case in point: SMH reports that hopes for a recovery in the housing sector have been dashed by fresh data showing new home sales were flat in July.The volume of new home sales increased 0.1 per cent in July, following a 0.5 per cent increase in June, the Housing Industry Association said today. States showed a wide variation in results with house sales dropping 4.4 per cent in Victoria, 11.6 per cent in South Australia and 3.1 per cent in Western Australia. In NSW they increased 9.8 per cent and 10.2 per cent in Queensland.]

Plummeting prices open a rare window in the luxury market
[Prestige homes and apartments in NSW, however, have been discounted by more than 30 per cent.]

Clouds hang low over Sunshine Coast: slow sales
[Compare this story to:]

Coast property reps celebrate
[Another example of fine objective reporting about the same property market – I mean, they were there celebrating at the party, you can’t get closer investigative journalism than that, can you? Not according to Property Week editor Erle Levey, who while there opined: “that’s what this industry is all about – working together.” I wasn’t aware that print media was part of the real estate sector: he must be working undercover …]

Valad to offload assets after $1.5bn hit
[The debt-plagued diversified property company Valad Property Group has limped to the end of the 2009 financial year with a $1.49 billion loss, providing no earnings guidance or assurance of a distribution payment for the future.]

Goodman Group in $1bn loss, capital market conditions easing
[Goodman Group has swung to a full-year a net loss of $1.12 billion after it wrote down the value of its properties. Australia’s largest industrial property trust posted a net profit of $250.7 million a year earlier.]

RAMS Home Loans in funding default warning
[RAMS Home Loans has warned it could default on its current funding commitments, if the group cannot renegotiate looming debt deadlines or sell more of its mortgage book.]

Trinity looks at acting on $1m fee
[Troubled property group Trinity is investigating whether it can take legal action over a secret $1 million success fee paid to Queensland lobbyist Ross Daley – property, payola and politics, the perennial and endemic corruptions of our democracy …] Read More

Conflict of Interest

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SF_crew

Renegade Economists Podcast 103

As broadcast on the almighty www.3cr.org.au on Wed August 26th.
Subscribe to the podcast by clicking on the Itunes logo (top right hand side of the front page – the blue note)

Conflict of Interest: An interview with Wendell Fitzgerald on the conflict that land owning MP’s and bankers face. A special extra long (podcasters only) edition as we get to the core of the issue.

Listen to Conflict of Interest

Music

Bibio – Cry! Baby!
Bibio – The Palm of Your Wave

Photo – Wendell Fitzgerald, Dave Giesen, Karl Fitzgerald outside the Economic Club of San Francisco

Fast Forward News #3

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David Pecotic

Two great new Australian e-gov mashups:
Key Indicators Graph
[Over at their Betaworks blog, the ABS has published an interactive graph that can display key indicators such as the unemployment rate, the consumer price index, gross domestic profit, average weekly income, and (most importantly for our purposes) the house price index. This is the latest in a series of visualisations of ABS data that not only make it fast and easy for our customers to find key figures but make it understandable to the non-statisticians (i.e., the rest of us).]

Atlas of Productive Ageing
[Another Australian e-gov initiative: provides maps and data for a number of indicators of ageing at different geographical levels.]

Is the Australian government equipped to provide collective public goods online?
[On the other hand … Gov 2.0 Taskforce’s Chairman Dr Nicholas Gruen stated that “it was the government’s job to build Google, Facebook, Twitter. I’m quite serious about that.” Most of us accept that one of the core purposes of government is to develop and provide infrastructure for its citizens, public goods that benefit nations and states but are often too expensive, unprofitable or may be a national security risk if left in the hands of private or foreign entities (how we fund that is another matter). But what about virtual public infrastructure: providing collective public goods that many people, including many Australians, use on a daily basis, whether for the storage, organisation, distribution or discovery of information? Or should they leave it up to the market?]

Garrett gives Gorgon gas go ahead
[Federal Environment Minister Peter Garrett has given the nod, with conditions, to the construction of the $50 billion Gorgon gas project on Barrow Island off the West Australian coast. An extra 28 conditions have been imposed on the project to ensure that Barrow Island, which is a Class A nature reserve, is adequately protected. Mr Garrett says as well as the extra conditions, 20 management plans are also in place.

Dr Andrew Burbidge, who is a consultant for Chevron (one of the joint venture partners), says, however, that the project should not go ahead because it will threaten the island’s biodiversity.]

Projected rises in sea level to curtail development
[PARTS of the Queensland coastline will be declared off-limits for development under a coastal planning policy released yesterday that claims sea levels will rise 80cm over the rest of this century.]

Australia’s ski fields: 40% less snow by 2060
[I wonder how this will effect property prices in the Alps …]

A dangerous Labor blind-spot
[OHS consultant Kevin Jones wrote a piece for Business Spectator on ‘Utegate’ and the role of Godwin Grech last reported to be receiving treatment in a Canberra psychiatric facility. He points out that the saga illustrates issues of personal responsibility for safety, an employers’ OHS obligations, hours of work, allocation of work tasks, an employee’s physical and mental health, and industrial relations regulatory compliance. It raises legitimate questions about how a Labor government, the traditional friend of the worker, manages the safety of its employees.]

Perhaps overwork leads to lack of due consideration of good ideas – like Geonomics!
Forum hears plan to level housing taxes
[HOME owners should not enjoy a tax advantage over renters, according to a proposal presented to a Henry review conference on tax reform.

A Treasury official has canvassed the idea of charging a defacto tax for living in the family home with additional payments offset by a tax deduction for mortgage interest payments. The 157-page paper said the greatest tax distortions to the savings choices of households were caused by explicit decisions made by government in two areas: superannuation and capital gains taxation.

However, as pointed out by one seller in the article, it will also act as a disincentive to owners to spend money on improvements. Geonomics, on the other hand …

Predictably, the property industry came out swinging yesterday against it. They argued it would result in (warning: may contain old chestnuts) a shortage of property, lift rents, and would most affect the elderly.]

Check the commentary on this important report over at Prosper

Property, death & taxes: the home owners advantage over renters
[A useful round-up about the Henry Tax Review and the pros and cons of the usual suspects: stamp duty. capital gains tax, negative gearing and land tax. The following ‘handy hint’ from property author and financial advisor Margaret Lomas with state-by-state variations is very revealing of our contemporary bunyip aristocracy: she argues against land tax as it is one that, beacuse of state-by-state variations, can be avoided by spreading your investments across Australia to maximise the tax-free thresholds.] Read More

Economics for Activists 2009

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3735976992_27f6a4736f_o
Tuesday September 8 – 22nd, 6.15 – 8pm
1/ 27 Hardware Lane, Melbourne

Universal economic laws must be understood if we are to change the system. How can we engage in this game of life without understanding the rules of engagement in this money dominated paradigm?

Learn to speak in the same language as the corridors of power … as if the wealth game is the only game?!!! How do we place a moral compass on Machiavellian markets?

Key issues will include boom-bust bubbles, resource scarcity, resource wars, urban density and the latest carbon trading controversies. Current issues will be used to understand fundamental economics terminology.

Karl Fitzgerald (3CR’s Renegade Economists) will host the 3 week course in a fast, upbeat manner.

The title of this photo is The Future Is Not What It Used To Be (Mike Licht). With that in mind, we hope to see you!

RSVP to book your seat for a packed event. Gold coin donation to cover our drinks n nibbles.