You lost us at hello

by | Nov 24, 2009 | Climate and resource scarcity, Economics and development

The FT’s Lex Column last week:

Like leaf blowers, commodity analysts seem pointless and full of hot air. Investors might have at least expected some respite when the resources bubble burst last May. In spite of buy recommendations across the board (if everyone in China bought a refrigerator, etc), the price of oil, copper and cotton halved. But it has taken less than a year for noise surrounding commodities to reach full volume again.

What is more, the worst economic slump in generations has done nothing to modify the bullish arguments of old. Commodity prices, apparently, will rise for ever on the back of rapid growth in emerging markets. The current rally may well have legs. But, just like last time, the fundamentals do not stack up.

Oh?

Assume, for illustration, that the long-term supply of resources is more or less the same as before the crisis. That seems sensible…

Ah.

The sincerest form of flattery

by | Nov 24, 2009 | Climate and resource scarcity

Proposals to be unveiled [in a speech today by Conservative Shadow Chancellor of the Exchequer George Osborne] include a “green investment bank” designed to “spur economic growth by financing the next generation of British green technology companies”.

The Tories said the bank would be “similar” to state banks in Spain and Germany that back investment in strategically important sectors.

Financial Times, 23 November 2009

I suggest the UK sets up a British development bank in order to finance our shift to a zero carbon economy.

At the moment, we have several development institutions which finance clean-tech and renewables projects, such as the EIB, EBRD and World Bank, though they mainly finance them in emerging market countries, or in certain countries ear-marked by the EU as big receivers of renewable subsidies (Spain and Germany).

The UK needs its own institution to drive development of the green economy here.  State-owned development banks have worked well in Asian economies, particularly for critical infrastructure projects which require long-term lending.

Jules Evans on Global Dashboard, 29 April 2009