Category Archives: Business

Germany’s renewable electric plan gets green light from EU

New scheme lifts some important barriers for the use of electrolysers in order to produce hydrogen
By Kostis Geropoulos – The European Commission has approved, under EU State aid rules, the prolongation and modification of a German scheme to support the production of electricity from renewable energy sources and from mine gas, as well as reductions of charges to fund support for electricity from renewable sources, the EU’s competition chief said.

The German Renewable Energy Act (Erneuerbare Energien Gesetz – EEG) 2021 scheme will provide important support to the environmentally-friendly production of electricity, in line with EU rules, European Commission Executive Vice-President in charge of competition policy Margrethe Vestager said.

“Thanks to this measure, a higher share of electricity in Germany will be produced through renewable energy sources, contributing to further reductions in greenhouse gas emissions and supporting the objectives of the Green Deal,” she said. “The scheme introduces new features to ensure that aid is kept to the minimum and electricity production occurs in line with market signals, while at the same time ensuring the competitiveness of energy-intensive companies and reducing pollution caused by ships in harbour. In this way, the scheme provides the best value for taxpayers’ money, while minimizing possible distortions of competition,” Vestager added.

The scheme also introduces small modifications to the German EEG surcharge reductions for energy intensive companies, a dedicated rule for surcharge reductions for hydrogen for energy intensive companies, as well as EEG surcharge reductions to promote the use of shore-side electricity by ships while at berth in ports.

Hydrogen Europe Secretary General Jorgo Chatzimarkakis told New Europe on April 30 the new scheme lifts some important barriers for the use of electrolysers in order to produce hydrogen. “This is good news and important signal for investments in the sector of ‘HydroGenewables,’” he said. more>

Updates from Chicago Booth

How to forge relationships with the ‘enemy’
By Alice G. Walton – When it comes to seemingly insurmountable conflicts, the one between Israelis and Palestinians ranks high.

But a Maine summer camp program called Seeds of Peace, which brings together Jewish Israeli and Palestinian teens, has been overwhelmingly successful at facilitating not just tolerance but close, positive relationships, suggests research by Facebook’s Shannon White and University of California at Berkeley’s Juliana Schroeder (both graduates of Chicago Booth’s PhD Program), along with Booth’s Jane L. Risen.

The work grew out of previous research by Schroeder and Risen, who in 2014 studied the program and found that campers’ attitudes toward people of the other nationality (in the “outgroup”) became significantly less negative after completing the program, particularly for campers who said they’d formed a close relationship with someone from the outgroup.

Why was that the case? To find out, White, Schroeder, and Risen analyzed data from surveys they collected of more than 500 participants who attended one of the Seeds of Peace summer camps between 2011 and 2017. Schroeder and Risen surveyed the teens before their camp stay began, including how positive, sympathetic, and anxious they felt toward or about members of the other group. more>

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Updates from ITU

ITU – The latest issue of the ITU Journal on Future and Evolving Technologies shares eight new papers on topics from network design and orchestration to privacy in cryptocurrency. Download the issue for unique contributions to research in:

  • Dynamic power control for future wireless networks
  • Ethernet protocol standards for time-sensitive networking
  • Privacy in cryptocurrency payment channel networks
  • Optimal network design for software-defined networking
  • Economic efficiency of spectrum allocation
  • Low-complexity coding for efficient error correction
  • Routing in multi-technology wireless sensor networks
  • Connectivity in the presence of hostile interference

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Tesla Sold Some Bitcoins

Also the deli, the first law of tax, a JPMorgan Bitcoin fund and Dogecoin vs. lottery tickets.
By Matt Levine – Tesla pulled a new lever to juice earnings in the quarter, generating $101 million in income from selling about 10% of its Bitcoin holdings.

Profit from the cryptocurrency and the sale of regulatory credits and tax benefits contributed about 25 cents to Tesla’s adjusted earnings of 93 cents a share, allowing the carmaker to beat Wall Street’s 80-cent average estimate, Dan Levy, an analyst with Credit Suisse, wrote in a note Monday.

That’s wonderful, my sincere congratulations to them. People want to be mad about this? There is a vague sense out there that it is somehow fraud to buy a thing, say you like it, and then sell some of it. For instance Dave Portnoy, who I guess is an investment celebrity now, used the words “pumps” and “dumps” to describe Tesla’s actions on Twitter, prompting Musk to reply that “Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.” (Tesla’s “Master of Coin,” Chief Financial Officer Zachary Kirkhorn, also talked a lot about liquidity on the earnings call; Tesla decided to put a chunk of its corporate cash into Bitcoin and I guess needed to make sure that its money wasn’t trapped. A reasonable concern! “We’ve been quite pleased with how much liquidity there is in the Bitcoin market,” said Kirkhorn.) more>

Empire Politician

A Half-Century of Joe Biden’s Stances on War, Militarism, and the CIA
(theintercept.com)By Jeremy Scahill – “I’m not going to change,” Joe Biden said in his 2008 vice presidential debate with Sarah Palin. “I have 35 years in public office. People can judge who I am. I haven’t changed in that time.”

Never in U.S. history has the country had a president with the voluminous paper trail that followed Biden into the White House. Since the Vietnam War, Biden has been in public office for all but four of the past 49 years. He has cast thousands of votes, sponsored or co-sponsored hundreds of bills, and taken public positions on virtually every possible foreign and domestic policy issue. He has served long enough to make it possible to chart, in great detail, the evolution of his positions on a range of issues, to analyze his contradictions, and to draw conclusions about how he sees the role of Congress and the executive branch on the most sensitive and consequential decisions made by the government: decisions about war and organized state violence.

The Intercept conducted an exhaustive analysis of Biden’s political career, with a focus on his positions on dozens of U.S. wars and military campaigns, CIA covert actions, and abuses of power; his views on whistleblowers and leakers; and his shifting stance on the often contentious relationship between the executive and legislative branches over war powers. While many of Biden’s positions could be assessed by reviewing his sprawling voting record and public statements, evaluating some of his actions, particularly from the first few decades of his career, required poring over copies of the congressional record, speech transcripts, archival media reports, and declassified government documents, including from the CIA.

The picture that emerges is of a man who is dedicated to the U.S. as an empire, who believes that preserving U.S. national interests and “prestige” on the global stage outweighs considerations of morality or even at times the deaths of innocent people. It also reveals a politician who consistently claims to hold bedrock principles but who often strays from those positions in support of a partisan agenda or because he wants a policy adopted regardless of the hypocrisy or contradictions. Nowhere is this dynamic more pronounced than on U.S. wars.

The picture that emerges is of a man who is dedicated to the U.S. as an empire. more>

Updates from McKinsey

The dos and don’ts of dynamic pricing in retail
Dynamic pricing doesn’t have to be extraordinarily complex, but it does have to be strategic and disciplined. Here’s a checklist for retailers.
By Sara Bondi, Maura Goldrick, Emily Reasor, Boudhayan Sen, and Jamie Wilkie – Over the past year, as homebound consumers placed online orders for everything from groceries and soap to yoga mats and laptops, many people were reminded of how easy it is to comparison shop on the internet. With just a few clicks, a shopper can find out which retailer sells a particular item at the lowest price. And because the shift to e-commerce is expected to continue even in the postpandemic era, pricing will become an increasingly important competitive tool for retailers. Dynamic pricing, in particular, is poised to become one of the core capabilities that sets winners apart in the retail landscape of the future.

Simply put, dynamic pricing is the (fully or partially) automated adjustment of prices. It’s a staple of the travel industry: dynamic pricing is the norm for airline tickets, hotel rooms, and ride-sharing services. In e-commerce, Amazon has long been a leader in dynamic pricing; the company reprices millions of items as frequently as every few minutes. But dynamic pricing isn’t just for travel companies or e-commerce giants, and it doesn’t necessarily require ultra-sophisticated software that changes every product’s price multiple times a day. Even traditional retailers can reap tremendous benefits from merchant-informed, data-driven algorithms that recommend price changes for selected products at some level of frequency.

Despite the competitive advantage that dynamic pricing can confer, few omnichannel retailers have developed this capability. Some are only now starting to explore the potential of dynamic pricing. Other retailers conducted half-hearted and poorly planned pilots that, unsurprisingly, had little impact and thus failed to get the organization’s buy-in.

Dynamic pricing isn’t just for travel companies or e-commerce giants, and it doesn’t necessarily require ultra-sophisticated software that changes every product’s price multiple times a day. more>

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Updates from ITU

The technology sector’s environmental duty
By Malcolm Johnson – Many enterprises are turning to technology to increase efficiency and ‘green’ their own operations.

But the ICT sector itself is currently one of the fastest growing greenhouse gas-emitting and energy-consuming sectors.

What more can be done to reduce our own carbon footprint?

Whether monitoring natural disasters or energy consumption or innovating the exciting new world of smart cities— the technology sector has already proven that it has the ‘smarts’ to make a positive difference. Post-pandemic, the ambition is to ‘build back better’ but the window for action is closing fast and we can’t fantasize about the future without also putting our own house in order.

We need to collaborate internationally, regionally and nationally to turn intention into action.

The interplay between climate change and digital transformation is fundamental. ICT can have transformative impact on the United Nations Sustainable Development Goals (SDGs) if developed and deployed with environmental impact in mind.

In the area of e-waste, for example, it can be challenging to determine who is responsible for the end-of-life management of equipment. The obligations for companies that produce equipment and put it on the market are not always clear, and the energy efficiency of products is not yet tied to the regulation of waste management. more>

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Morgan Stanley Commits $1 Trillion for Sustainable Solutions

Morgan Stanley commits to mobilizing $1 trillion by 2030 for sustainable solutions that include helping prevent and mitigate climate change.
Morgan Stanley – Public health emergencies, social and economic inequality and the ramifications of climate change stand among the most immediate and pressing global issues of our time. In response, governments, corporations and investors have rallied around sustainability efforts, not only to preserve our planet for current and future generations, but also to improve the standard of living for diverse communities.

Morgan Stanley has been a leader in prioritizing environmental, social and governance (ESG) practices for more than a decade. Now, the firm has pledged to mobilize at least $750 billion of low-carbon solutions, tripling our original commitment set in 2018. This enhancement is part of a larger goal to facilitate $1 trillion of sustainable solutions by 2030 that support the United Nations’ Sustainable Development Goals—a scale of capital that reflects the growing severity and urgency of these global challenges.

Morgan Stanley also joined the United Nations-convened Net-Zero Banking Alliance, which coordinates 43 of the world’s leading banks to accelerate the transition to net zero, a state in which the amount of carbon produced is offset by the amount removed from the atmosphere. The alliance provides a common framework for banks to set, communicate and achieve 2050, 2030 and nearer-term targets, and engage with clients on decarbonization efforts. more>

Reinvent the future using the present as an example

By Francisco Jaime Quesado – More than ever we need to fight for a strong society that leads by example and where people know who they are. Those people will have a strong commitment to the values of freedom, social justice and development. This is the reason to believe that a new standard of collective participation is more than just a possibility, it is an individual and collective necessity for all of us.

This is the message both for the present and the future and for the capacity of the individual to participate as a central contribution to the reinvention of society. We need to reinvent the future with an effective example of the present.

This process of open reinvention will not be determined by law. It will be effectively constructed by all of the key actors who are taking part in a free and collaborative strategic interaction. In a certain sense, we need a new strategic order for the world. When we speak about this special global capacity of creating a new commitment between citizens, towards the challenge of the future, we are in fact speaking about a commitment to a global public space in the world.

Based on new standards of social innovation, this kind of new strategic order is above all a confirmation that in an innovative society, an individual’s performance – in a complex ecosystem – is possible and desirable, but above all, it is necessary for the future. more>

Updates from McKinsey

Streaming and royalties in mining: Let the music play on
Renewed growth sentiment among miners’ management teams, combined with the rise of streaming-and-royalty financing over the past ten years, suggests that this particular type of alternative financing could be set for significant expansion over the next decade.
By Scott Crooks, Siddharth Periwal, Oliver Ramsbottom, Elijah Saragosa, and Jessica Vardy – Following the commodity downturn in 2014, many miners were forced to focus on cost-out initiatives, deleveraging balance sheets and returning cash to shareholders who had become disillusioned with the industry’s track record. Growth projects were inevitably over budget (and often behind schedule), and M&A deals were often completed at lofty premiums—but, in hindsight, they often were executed at the top of the market, resulting in value destruction. In the post-boom environment, many mining companies found it challenging to raise capital from either the public-debt or public-equity markets. As a result, many industry commentators predicted the emergence of private debt and private equity. While the growth in private debt and equity has been below expectations, one form of alternative financing that has blossomed has been streaming-and-royalty financing. Expansion in this form of alternative financing, coupled with increasing focus on growth by management teams, leads us to believe that streaming-and-royalty financing is poised for strong growth over the next decade.

Metal streaming-and-royalty contracts are transactions under which mining companies sell future production or revenues in return for an up-front cash payment. There are some distinct differences between the two types. Streaming deals are normally focused on specific commodities produced by a particular project, such as precious-metal by-products from a base-metals project. In return for this up-front cash payment (the “deposit balance”), the streaming partner secures a share of future production at an agreed-upon discounted price, which may be fixed or alternatively a floating percentage of the prevailing spot price. Thus, miners receive payment on delivery for streamed physical volumes. In contrast, royalty deals are normally commodity agnostic and based on overall project revenues; the royalty company never actually “sees” the commodities that the mine produces, but rather just receives a share of the revenue generated (the royalty). In effect, streaming deals are settled by the physical transfer of metal while royalty deals are settled with cash.

Royalty ownership in the mining industry is generally agreed to have originated with Franco-Nevada in the mid-1980s. The mining company’s first royalty investment in 1986 involved spending half the corporate treasury to acquire 4 percent of the revenues from a mine in Nevada owned by Western State Minerals. Following this initial transaction, Franco-Nevada went on to purchase royalties in various other commodities, further developing the mining sector’s royalty business model. The arrival of the precious-metals streaming business model is often attributed to Wheaton River: while seeking to raise funds in 2004 to expand its core business of gold mining, the company conceived the idea of streaming silver by-product from the San Dimas gold mine in Mexico to a new subsidiary company, Silver Wheaton. In the world’s first streaming agreement, Silver Wheaton purchased yet-to-be-produced silver from Wheaton River’s operations in Mexico in return for an up-front payment and additional payments on delivery of the silver. New players have emerged in the past decade in the streaming-and-royalty sector, including Triple Flag in 2016, Nomad Royalty in 2019, and Deterra Royalties in 2020. However, the industry remains very consolidated, with the top three players—Wheaton Precious Metals, Franco-Nevada Corporation, and Royal Gold—representing approximately 80 percent of the total value of streaming-and-royalty contracts as defined by volume of gold equivalent ounces (GEOs). more>

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