Category: Economics

China passes new pollution law

Legislators have approved amendments to China’s 15-year-old air pollution law that grant the state new powers to punish offenders and create a legal framework to cap coal consumption, the Asian giant’s biggest source of smog.

The draft amendments were passed by 154 votes to 4, with five abstentions, Zhong Xuequan, spokesman for the National People’s Congress, China’s parliament, told a media briefing…

The ruling Communist Party has acknowledged the damage that decades of untrammeled economic growth have done to China’s skies, rivers and soil. It is now trying to equip its environmental inspection offices with greater powers and more resources to tackle persistent polluters and the local governments that protect them.

The amendments are expected to make local governments directly responsible for meeting environmental targets. They also ban firms from temporarily switching off polluting equipment during inspections and outlaw other behavior designed to distort emission readings.

Tong Weidong, vice-director of the NPC’s legal work committee, told the briefing the law would improve the way local authorities were assessed and allow them to draw up their own plans to meet environmental targets…

However, researchers said the changes do not go far enough and that the third reading of the bill should have been postponed until all its shortcomings had been resolved.

Sounds like another step forward. The article isn’t clear about household air pollution though broadly it sounds as if it is covered.

Like England in the period after WW2, half of China’s coal-generated air pollution comes from home fires for cooking and heating. These are almost always in the least efficient stoves for any purpose – regardless, there isn’t any way to bring them up to useful standard.

I’ve blogged earlier about efforts to bring NatGas into easy urban access and the last-mile problem will remain the greatest obstacle. That solution is what changed life in many American industrial cities as well as the UK in the fifteen years or so after the war. That change didn’t have to provide new pipelines or local access. We already had use of coal gas. The conversion only required a new orifice for each burner in every stove or furnace.

China’s cities will have to excavate.

The Humvee’s replacement — the Oshkosh L-ATV

…The US Army has picked its replacement for the aging vehicle originally designed as a Cold War replacement for the Jeep—and it comes from Wisconsin. Eventually, the Army and Marine Corps could buy nearly 55,000 of the vehicles over the next 25 years, spending over $30 billion.

In a move that will undoubtedly spur a spate of protests and political backlash from a heavily lobbied Congress, the US Army has awarded the Defense Department’s multibillion dollar Joint Light Tactical Vehicle (JLTV) program contract to the contender from Oshkosh Defense, beating out the other finalists in the program, which started in November of 2006 — Lockheed Martin and the Humvee’s manufacturer, American General. The initial “low rate” order for 16,901 vehicles for both the Army and Marine Corps is worth $6.7 billion.

That’s a touch over $396K per copy!

Oshkosh’s winning design is called the L-ATV (for “Light Combat Tactical All-Terrain Vehicle”). It includes innovations that were added to the Humvee during the wars in Iraq and Afghanistan, including remote-operated weapons turrets (with heavy machine guns, automatic grenade launchers, and anti-tank missiles), and electronic warfare gear to jam remote controls for improvised explosive devices (IEDs). It will also be a rolling network unto itself, equipped to generate up to 10 kilowatts of “exportable” power for Army and Marine Corps communication and computer gear, with HF, VHF, UHF, and SATCOM onboard as well as a vehicle intercom system. There’s also a centralized onboard computer system powering “smart displays” for the soldiers or Marines it carries. The L-ATV will also be equipped with a variety of surveillance and threat sensors—including a shot locator system, long-range surveillance cameras, and low-light and infrared camera systems.

The L-ATV can be transported by heavy-lift helicopter or by the Marine Corps’ landing craft, but it’s a much bigger payload than the Hummer, with a curb weight nearly three times that of the older vehicle: about 14,000 pounds, compared to the Humvee’s 5,900 pounds. That extra mass is a combination of armor, electrical power and additional horsepower. Oshkosh won partially because of the proven performance of its M-ATV, a mine-resistant ambush protected (MRAP) vehicle it sold to the military as an urgent replacement for Humvees and trucks damaged by IEDs in Iraq and Afghanistan. But the L-ATV also has better fuel efficiency than the Humvee, and its suspension system allows for 70 percent faster off-road speeds.

I’m still a motorhead. Of course, that extends to every kind of motor vehicle including all terrain monsters like this. Though I’m pleased to see Oshkosh beat out the corporate dangerous duo who’ve been in bed with our military-industrial complex since before it was so named — no doubt I will have differences with specification, intent and design.

Some other time.

Myths about China’s ghost cities

ghost cities

Ghost towns tend to start as boomtowns, and contemporary China more than likely has more boomtowns than any other country in history. No economy has ever risen so rapidly and no place has ever built so much so quickly. This rapid growth has resulted in peculiar side effect: ghost cities, everywhere.

Although the term “ghost town” is technically a misnomer in this case. A ghost town is a place that has become economically defunct — in other words, a place that has died. What China has is the opposite of ghost towns: It has new cities that have yet to come to life.

There are nearly 600 more cities in China now than there were when the Communist Party took over in 1949. This large-scale urban transition began in the early 1980s, when rural areas began being rezoned as urban en masse and the city took center stage in China’s plans for the future. In the early 2000s this urbanization movement was kicked into high gear. New urban developments began popping up seemingly everywhere — along the outskirts of existing cities as well as in the previously undeveloped expanses between them. Many cities doubled or even tripled their size within relatively short spans of time. In just 15 years Shanghai alone grew sevenfold and its population increased to more than 23 million from 6.61 million.

China’s broader urbanization movement shouldn’t be thought of as a developmental free-for-all. There is a method behind all of this building and an overarching framework. Ten massive new urban conglomerations called mega-regions have been proposed in strategic locations across the country. These are essentially city clusters of 22 million to more than 100 million people each that are to be connected through infrastructure, economically, and, potentially, even politically…

When developers purchase these new plots of land, they are prohibited by law from sitting on them. They must build something. While it is commonly thought that getting in on a new development zone early is key to making a big profit, these areas tend to lie far outside the bounds of mature, built-up urban areas. This often means constructing vast apartment complexes, giant malls and commercial streets in places that do not yet have much of a population base to support them.

Building a new city from the ground up is a long-term initiative, a process that China estimates takes roughly 17 to 23 years. By 2020, Ordos Kangbashi plans to have 300,000 people, Nanhui expects to attract 800,000 residents and 5 million people are slated to live in Zhengdong New District. China’s new cities are just that: new.

There is hardly a single new urban development in the country that has yet gone over its estimated time line for completion and vitalization, so any ghost city labeling at this point is premature: Most are still works in progress. But while building the core areas of new cities is something that China does with incredible haste, actually populating them is a lengthy endeavor.

When large numbers of people move into a new area, they need to be provided for; they need public services like healthcare and education. Therefore, a population carries a price tag and there is often an extended period of time between when cities appear completed and when they are actually prepared to sustain a full-scale population. This could be called the “ghost city” phase…

It generally takes at least a decade for China’s new urban developments to start breaking the inertia of stagnation. But once they do, they tend to keep growing, eventually blending in with the broader urban landscape and losing their “ghost city” label.

Can you imagine an American journalist, much less an American politician or a denizen of Wall Street capable of appreciating planning that accepts a 17 to 23 year timeline? It’s so much easier to sit back and point fingers at furriners who do things differently from a nation of builders and homeowners that created Levittown.

Nope. Steven Roach, the economics maestro of MCSI in Asia for decades – and now senior fellow and senior lecturer at Yale – tends to demolish “ghost city” tales of woe with a brevity I appreciate. Even though I would like a wee bit of invective thrown in for good measure. I’ve seen him do it on Bloomberg TV more than once.

It’s even more useful and productive to bump into a source within the conservative confines of a Reuters blog that fleshes out the reasoning behind the process so well. Now, I have to get his book. :)

Thanks, Wade Shepard

Our oceans hold the key to sustainability

Although 97 percent of the earth’s surface water is made up of oceans, humans use only a small percentage of the sea for food. Instead most people, especially those in Western cultures, rely heavily on land-based agriculture for food that result in deforestation, soil degradation, greenhouse gases, and depletion of freshwater supplies. In the August issue of Food Technology magazine…senior editor/writer Toni Tarver writes about how the oceans are an untapped resource for food that is not only more eco-friendly but, in some cases, more nutritious than land-based foods.

Fish and marine animals contain several nutritional benefits. Rich in vitamins A and D, selenium, zinc, iodine and iron, fish also contain essential omega-3 fatty acids, docosahexenoic acid (DHA) and eicosapentaenoic acid (EPA) which support proper brain functioning. In Asian and Nordic countries, where seafood is a dominant part of the cuisine, the life expectancy of both men and women is four to seven years longer than in Western cultures where seafood is consumed on average once a week. In addition rates of obesity, cancer, cardiovascular disease, and diabetes are much lower.

Although there are between 300 and 500 different species of fish sold for human consumption, only three types make up more than 50 percent of all seafood consumed: shrimp, tuna and salmon… Americans could benefit from expanding their seafood palate to include mackerel, mullet, sardines, oysters, mussels, clams, lionfish, and other unidentified edible species.

And that’s not even getting into seaweed – something many Asian and Pacific cultures are fond of.

You can check out Toni Tarver’s original article over here.

State and country trade maps


Click to enlarge

International trade is a big part of America’s economy, and a factor in each of the fifty state economies that constitute it.

The Census Bureau publishes annual figures on each state’s international trade. In addition to the top 25 goods imported and exported by each state, the Bureau reports the 25 countries each state imports the most from and exports the most to. We took a look at the biggest trade partners by dollar value of goods imported and exported for each state in 2014.

Here’s the country that each state imports the most from. Canada and China loom large.

NSS.

Just a touch of political economy…

Former Florida Governor Jeb Bush, though he has been short on specifics, has promised to produce an economy that grows 4 percent or more a year. His top economic advisers were leading decision-makers in the administration of his brother, President George W. Bush, when the rate of expansion never reached 4 percent. The only time over the past half-century that such growth was achieved for four consecutive years — the length of a presidential term — was under Bill Clinton.

No, this is not a ringing endorsement of the average Democrat understanding of economics – and, especially, political economy. Given the paucity of thought and understanding we’re allowed with the two old parties, this is what we have.

At least Al Hunt has managed to keep his sense of humor, the theater of the absurd, while covering the truckloads of horse manure that passes for social and economic analysis in the popular press, our political punditry and, most of all, Congressional ideologues and demagogues.

Thanks, Al Hunt

Price of wind energy in United States drops to an all-time low

old and new on the farm
Click to enlargePhoto by DoriL

Wind energy pricing is at an all-time low, according to a new report released by the U.S. Department of Energy and prepared by Lawrence Berkeley National Laboratory…The prices offered by wind projects to utility purchasers averaged under 2.5¢/kWh for projects negotiating contracts in 2014, spurring demand for wind energy.

“Wind energy prices–particularly in the central United States–have hit new lows, with utilities selecting wind as the low cost option,” Berkeley Lab Senior Scientist Ryan Wiser said. “Moreover, enabled by technology advancements, wind projects are economically viable in a growing number of locations throughout the U.S.”

Wind is a credible source of new electricity generation in the United States. Wind power capacity additions in the United States rebounded in 2014, with $8.3 billion invested in 4.9 gigawatts of new capacity additions. Wind power has comprised 33% of all new U.S. electric capacity additions since 2007. Wind power currently meets almost 5% of the nation’s electricity demand, and represents more than 12% of total electricity generation in nine states, and more than 20% in three states…

Low wind turbine pricing continues to push down installed project costs. Wind turbine prices have fallen 20% to 40% from their highs back in 2008, and these declines are pushing project-level costs down…

The manufacturing supply chain continued to adjust to swings in domestic demand for wind equipment. Wind sector employment increased from 50,500 in 2013 to 73,000 in 2014. Moreover, the profitability of turbine suppliers has generally rebounded over the last two years…Exports of wind-powered generating sets from the United States rose from $16 million in 2007 to $488 million in 2014…

Despite the significant growth in the domestic supply chain over the last decade, however, far more domestic manufacturing facilities closed in 2014 than opened. With an uncertain domestic market after 2016, some manufacturers have been hesitant to commit additional long-term resources to the U.S. market.

Despite growth in manufacturing, lower costs for consumers – despite extended growth in domestic consumption and exports – everyone has to sit on their hands and wait to see if the know-nothings in the Republican Party can turn out sufficient numbers of the stupid vote to turn our power generation back to coal and the Koch Brothers Brigade.

The age-old questions remain: will what remains of the American middle class figure out how to vote for their own economic best interest, better health for their children and grandchildren – or will the plutocrats prevail and buy another election?

First nuclear reactor restarted – in Sendai – since Fukushima meltdown


Beginning of the end

A Japanese utility company said Tuesday it restarted a nuclear reactor, the first to do so since the Fukushima Daiichi meltdown in 2011.

“We hereby announce that as of today, Sendai Nuclear Power Unit No.1 has extracted control rods from the reactor and started up at 10:30 a.m.,” Kyushu Electric Power Co. said…”We see this startup as one of the important steps on restart process of the nuclear reactor.”

Japan has been working to reshape its energy sector since the 2011 meltdown of the Fukushima Daicchi nuclear reactor by focusing on energy efficiency, conservation and an increased use of cleaner-burning natural gas to help keep emissions in check…

Japan decommissioned 50 reactors after the 2011 meltdown, forcing it to re-examine its energy mix. Prior to the Fukushima disaster, nuclear had provided about 30 percent of Japan’s electricity, with renewable energy accounting for less than 3 percent, excluding hydropower. The country relied heavily in imports of liquefied natural gas in the wake of the disaster.

Kyushu in its statement said it would “never” allow a repeat of the 2011 disaster.

“We will continue to make sincerely an all-out effort to deal with the Nuclear Regulation Authority’s inspections, and carry out carefully remaining process, putting utmost priority to safety, with a sense of alertness more than ever,” it said.

A magnitude-9 earthquake and resulting tsunami 2011 led to a meltdown at the Fukushima facility, the worst nuclear catastrophe since Chernobyl disaster in Ukraine in 1986.

Not much of an article – deliberately. I’ll offer more in-depth discussion as the process of restart proceeds.

Japan hasn’t much of a choice at present. They have this capacity in place. The nation has been making do – which means spending a lot more to provide electricity than anyone has been accustomed to. The citizens of Japan are – unfortunately – used to going along with whatever decisions their politicians make. So, they’ve been absorbing the price hikes flowing from a kludged-together system of electricity production since the disaster.

Though a lifetime advocate for nuclear-generated power, I’ve had to change that position in the last year or two. China’s subsidized development of solar-generated electricity, wind-generated electricity [along with parallel development in northern Europe] has qualitatively changed the picture…for the better, I believe. Regardless of all the hollering, trade sanctions, whining from Congress, the result has been legitimate cuts in the cost of establishing alternative power generation both on a large-scale and home-based.

A win for nations and individuals. A win for the environment.

Average US vehicle age continues to rise — up to 11½ years

Ruff Boy with a spool of kindling
21 tears old and counting

The combined average age of all light vehicles on the road in the U.S. has climbed slightly to 11.5 years, based on a snapshot of vehicles in operation taken Jan. 1 of this year, according to IHS Automotive, a global provider of critical information and insight to the automotive industry…

Registrations for light VIO in the U.S. also reached a record level of 257,900,000. That’s an increase of more than 5.3 million (2.1 percent) since last year and the highest annual increase the auto industry has seen in the U.S. since IHS began tracking VIO growth. New vehicle registrations also outpaced scrappage by more than 42 percent – the highest rate seen since the statistic has been tracked, according to the analysis…

Helping age the fleet is the fact that consumers are holding on to their vehicles longer than ever before.

Looking ahead, IHS forecasts that average age is likely to hit 11.6 years in 2016 but not reach 11.7 until 2018. The rate of growth is slowing as compared to 2008-2013 due to the recovery in new vehicle sales. IHS Automotive has expected this and has been preparing customers and industry leaders in the aftermarket to respond to this slowdown in growth…

Because of improved quality and consumers holding their cars and light trucks longer, vehicles 12-plus years old continue to grow and will increase 15 percent by 2020.

And that – after all – is the point. The critters are built better and last longer. Recalls aside. Between lawyers, insurance companies and politicians running for re-election, recalls are way up. Some of that is from increased complexity. Some from special areas of lousy QC – like airbags.

But, most families are probably like mine. My wife got her first shiny new car ever a year-and-a-half ago. Part of preparation for early retirement. She only drives about 2000 miles per year since retiring.

My 21-year-old pickup had over 200K miles on it when I retired but [1] it didn’t seem likely to self-destruct from wear – now driving about 800 miles per year and [2] only driving about 800 miles per year, it didn’t make sense to buy a new or newish used truck. Ruff Boy, keep on rolling!