Tuesday, February 28, 2023

"Lithium price slide deepens as China battery giant bets on cheaper inputs"

Although they don't have quite the pricing power in lithium that they have in rare earths, the Chinese can jack the price around. In rare earths they have so much market share and such cartel-like control that they can and have drooped their prices below foreign cost-of-production and thus destroyed most of the competition. One of the keys to that control is owning the entire supply/fabrication chain. As noted last month:

They aren't that rare. Just hard to find in the right proportions of the different rare earth elements. And in concentrations high enough to make extraction a paying proposition.

And requiring some technical expertise to fabricate into end products. It's not as if there are neodymium magnets just laying around. 

And the headline story from Reuters via Mining.com, February 28:

Rare discounts offered by Chinese battery giant CATL to automakers have accelerated a plunge in lithium prices, and the market is set to drop a further 25% with supply growth outpacing demand, analysts and traders say.

After a frenzied rush by electric vehicle makers to secure raw materials over the past two years, which drove prices for lithium carbonate up more than six-fold and spodumene up nearly ten-fold, the bubble has burst.

“Supply is coming on stream faster than you can say ‘boo’,” said analyst Dylan Kelly of Ord Minnett in Sydney.

“Demand remains strong but prices have been unsustainable for some time now.”

The turning point for lithium prices came late last year as electric vehicle demand in China slowed sharply ahead of Beijing’s planned halt to subsidies for the $87 billion industry, the world’s biggest and fastest growing.

The slide steepened, analysts say, as investors were spooked by a drop in China’s January electric vehicles sales and by CATL’s discount terms, which included an assumption that prices of lithium carbonate, a key component in auto batteries, would more than halve.

But even as demand worries have rocked markets, it is the looming supply from China, Australia and Chile that will bring prices back down to earth, analysts say.

Rystad Energy sees the global market deficit of lithium shrinking to around 20,000 to 30,000 tonnes of lithium carbonate equivalent (LCE) this year, from 76,000 tonnes LCE in 2022....



And hundreds more, use the 'search blog' box, upper left, if interested

"China’s factory activity grows further, marks its highest reading in nearly 11 years"

 This is what Marc Chandler was highlighting early this morning:

...Asia Pacific
China's economic recovery is gaining ground and the forecasts for tomorrow's PMI looks for more gains. The composite was below the 50 boom/bust level in the last three months of 2022 (finishing at 42.9) but jumped back to 52.9, the highest since last June in January. The February reading is expected to rise further as the manufacturing and service PMIs likely rose. It will be reported early on March 1....
And from CNBC, Feb 28 20238:44 PM EST
  • China’s official manufacturing PMI hit 52.6 in February, above the 50-point mark that separates growth from contraction.
  • China Beige Book’s chief economist Derek Scissors expects to see an improvement in consumption later this year.

China’s factory activity for February bounced further into expansion territory, according to data from the National Bureau of Statistics.

The official manufacturing purchasing managers’ index rose to 52.6 in February – above the 50-point mark that separates growth from contraction. That marks the highest reading since April 2012, when it hit 53.5.

February’s PMI reading is also higher than the 50.1 reported for January and above expectations of 50.5, according to economists surveyed by Reuters.

Non-manufacturing PMI also grew further to 56.3 from January’s print of 54.4, when it saw a sharp improvement backed by a recovery in services and construction activity....


The yuan has been strengthening (down is stronger) against the dollar for the last couple days but since the PMI numbers not so much:

TradingView Chart


"What if everything we’ve come to think of as American is predicated on a freak coincidence of economic history? And what if that coincidence has run its course?"

A repost from 2013:

A question that economic and market modelers had better be aware of. It is important enough that I've brought it up more than once:
Dec 2012

Other than that...

We only have one sample of U.S. market history, only one time the U.S. rose to economic dominance, only one period of invention like the one described above.

Anyone who uses past performance as anything more than past performance is either a mental defective or a charlatan. 
Nov 2008
 I've had my copy of the Cowles Commission's Common Stock Indexes 1871-1937 open on the desk for pretty much the past year.
I am struck by two things:
1) In the U.S. markets we've got one data-set, with a total of 1642 (Oct. '08) monthly points. Anyone trying to forecast off that had better have HUGE error bars. Or, fess up to the fact that no one really knows and acknowledge that this year a portfolio had a better chance if directed by an astrologer. (Arch Crawford is Hulbert's #1 market letter YTD...
Anyone serious about this stuff in light of fiduciary duty should probably read Dimson, Marsh and Staunton's Triumph of the Optimists, links below.

From New York Magazine:

Illustration by Mario Hugo  
Picture this, arranged along a time line.

For all of measurable human history up until the year 1750, nothing happened that mattered. This isn’t to say history was stagnant, or that life was only grim and blank, but the well-being of average people did not perceptibly improve. All of the wars, literature, love affairs, and religious schisms, the schemes for empire-making and ocean-crossing and simple profit and freedom, the entire human theater of ambition and deceit and redemption took place on a scale too small to register, too minor to much improve the lot of ordinary human beings.

In England before the middle of the eighteenth century, where industrialization first began, the pace of progress was so slow that it took 350 years for a family to double its standard of living. In Sweden, during a similar 200-year period, there was essentially no improvement at all. By the middle of the eighteenth century, the state of technology and the luxury and quality of life afforded the average individual were little better than they had been two millennia earlier, in ancient Rome.

Then two things happened that did matter, and they were so grand that they dwarfed everything that had come before and encompassed most everything that has come since: the first industrial revolution, beginning in 1750 or so in the north of England, and the second industrial revolution, beginning around 1870 and created mostly in this country. That the second industrial revolution happened just as the first had begun to dissipate was an incredible stroke of good luck. It meant that during the whole modern era from 1750 onward—which contains, not coincidentally, the full life span of the United States—human well-being accelerated at a rate that could barely have been contemplated before. Instead of permanent stagnation, growth became so rapid and so seemingly automatic that by the fifties and sixties the average American would roughly double his or her parents’ standard of living. In the space of a single generation, for most everybody, life was getting twice as good.

At some point in the late sixties or early seventies, this great acceleration began to taper off. The shift was modest at first, and it was concealed in the hectic up-and-down of yearly data. But if you examine the growth data since the early seventies, and if you are mathematically astute enough to fit a curve to it, you can see a clear trend: The rate at which life is improving here, on the frontier of human well-being, has slowed.
If you are like most economists—until a couple of years ago, it was virtually all economists—you are not greatly troubled by this story, which is, with some variation, the consensus long-arc view of economic history. The machinery of innovation, after all, is now more organized and sophisticated than it has ever been, human intelligence is more efficiently marshaled by spreading education and expanding global connectedness, and the examples of the Internet, and perhaps artificial intelligence, suggest that progress continues to be rapid....MUCH MORE
Re Triumph of the Optimists, the main point to take away is how different your portfolio returns look if you were invested in the Berlin market in late 1944, the Chinese market in 1949 or the U.S. market over the last 150 years. As The Economist pointed out the authors deliberately excluded the Warsaw and Moscow Exchanges "since they were closed down under communist rule. That led to returns best described as “steeply negative”. If these markets were taken into account, the historical equity premium would be even lower"

CXO Advisory put together the crib notes:
Triumph of the Optimists (Chapter-by-Chapter Review)

Victor Niederhofer takes a look at the methodology and conclusions.

Here's Dimson with an overview (7 page PDF)

"Marketing Ukraine's Reconstruction To Fuel The War"

If you want in on the action, get to know this woman:

She has an amazing ability to end up where the loot is.

The headline link from Laura Ruggeri's Medium site, February 24:

Immediately after the start of Russia’s military operation in Ukraine, key players in the coalition supporting Ukraine, as well as transatlantic financial institutions and think tanks, were already discussing Ukraine’s reconstruction. They invariably framed it as a historic opportunity for the country: like a phoenix rising from the ashes, Ukraine would become a beacon of freedom, democracy and rule-of-law, a testimonial for Build Back Better, a green and digital economy success story; the country would leapfrog several stages of economic and governmental development and its economic growth would replicate Germany’s post-war boom. Unsurprisingly, the more recent and far less inspiring examples of Western-led ‘reconstruction’ in Iraq, Libya and Afghanistan didn’t deserve mention.

The speed with which fantastical narratives of recovery and reconstruction were churned out shouldn’t surprise anyone: they had been concocted years earlier as part of several ‘reform plans’ for Ukraine. One could say they are hardwired into the overall strategy of this proxy war against Russia and the storytellers are directly or indirectly linked to governments and lobbies that are involved both in the destruction of Ukraine and the Ukrainization of Europe, a process designed to fully control, militarize and plunder the Old World.

There is little doubt that Ukraine will need rebuilding once the war eventually ends, but ‘destruction’ and ‘reconstruction’ mean different things to different people in different contexts.

For instance, there is strong disagreement as to what constitutes ‘destruction’, when the ‘destruction’ of Ukraine started and who should be blamed for it. The semantic field, like history, is a contested territory.

Those who have been following Ukrainian affairs without ideological prejudice, and with a modicum of intellectual honesty, know that at the time of the dissolution of the USSR, Ukraine was an economic powerhouse, the third industrial power of the Soviet Union after Russia and Belarus, and its breadbasket. The Soviet republic had aerospace, automobile and machine tool industries, well-developed mining, metallurgical and agricultural sectors, nuclear, oil refining and petrochemical plants, tourism and commercial infrastructures and the largest shipbuilding centre in the USSR.

Steps along a continuum of destruction

Since its independence in 1991, Ukraine’s GDP has lagged behind the level it reached in Soviet times, industry declined, and the population decreased by about 14.5 million people in 30 years due to emigration and the lowest birth rate in Europe. Ukraine has also become the third largest IMF debtor and Europe’s poorest country. These negative records cannot be blamed solely on Ukraine’s systemic and staggering corruption: the corrupt networks bleeding Ukraine are truly transnational.

Ukraine was targeted by two colour revolutions that led to regime change and civil war, and was wrestled away from its largest economic partner, Russia. Its history was erased and rewritten, neoliberal prescriptions destroyed its economic and social fabric and led to a neocolonial form of governance.

Ukraine joined Europe’s nefarious Eastern Partnership(1) in 2009 and has been teeming with Western NGOs, economic and political advisers since its independence. The country’s indentured servitude and captivity to Western interests was cemented after the last Ukrainian government to object to the IMF’s harsh conditions was overthrown by a U.S.-sponsored coup in 2014.

On 10 December, 2013, Ukrainian president Viktor Yanukovich stated that the conditions set by the IMF for loan approval were unacceptable: “I had a conversation with U.S. Vice President Joe Biden, who told me that the issue of the IMF loan has almost been solved, but I told him that if the conditions remained we did not need such loans”. He then broke off negotiations with the IMF and turned to Russia for financial assistance. It was the sensible thing to do, but cost him dearly. You can’t break the shackles of IMF debt with impunity: not only does this lender of last resort impose its usual shock therapy of austerity, deregulation, and privatization so that the vultures can swoop in, it also furthers and protects U.S. interests.

If those who destroyed a country are allowed to be involved in its reconstruction, then reconstruction will inevitably be just a point on the continuum of conquest, occupation and looting, but with better optics. Destruction produces that blank slate on which the occupier can write his own rules: “To plunder, butcher, steal, these things they misname empire: they make a desolation and they call it peace”. Tacitus knew both the reality and the spin of Roman imperialism. One can only wonder if those who talk about ‘reconstruction’, ‘recovery’, ‘reform’, ‘rules-based order’, ‘reset’ or whatever buzzword is fashionable at the moment are aware of the brutal reality or truly believe their own propaganda. In any case, they promise a future utopia worth killing and dying for....


Possibly also of interest:  

UPDATED—Fundraising Lessons From Volodymyr Zelensky: Get In Front Of The World Economic Forum.... Ask For $5 Billion.... Per Month

"Patronage" for investors 
 Zelensky said Ukraine would have a “special, historically significant model of rebuilding,” in which companies and countries could choose a specific region or mine to rebuild....

What Sort Of Dirt Does Zelensky Have On The U.S., The U.K. etc., That He Can Float A Trillion Dollar Ask?

"Zelensky Says Rebuilding Ukraine Will Cost More Than $1 trillion; Talks To BlackRock About The Opportunity (BLK)". 

More On BlackRock's Plans For Ukraine

And though not mentioned by name, Madame Jaresko was a primary character in the story of Templeton's Ukrainian bond doings that we highlighted in last year's "Sovereign Debt: 'Ukraine in default according to Fitch and S&P'".

She was mentioned by name in 2014's ""The Corporate Takeover of Ukrainian Agriculture"".



Just So You Know: "Meghan 'has been upset and overwhelmed by her depiction on South Park for days'"

I was going to condemn this to the link-vault but realized the screenshots of the vid are pretty funny and markets are trading with an upside bias to counter the Month of February decline.
(watch out for the first week of March though)
From The Daily Mail, February 20:
Meghan 'has been upset and overwhelmed by her depiction on South Park for days' after irreverent US cartoon described Duchess as 'sorority girl, actress, influencer, victim' in scathing episode
  • Duchess of Sussex has reportedly taken issue with her depiction in South Park
  • The episode introduces her as a 'sorority girl, actress, influencer, victim'

The Duchess of Sussex has been left 'upset and overwhelmed' at how she and Prince Harry are depicted in an episode of South Park, insiders have claimed.

The episode, titled 'The Worldwide Privacy Tour', pokes fun at the couple's grievances while Meghan is introduced cuttingly as a 'sorority girl, actress, influencer, victim' by another character.

The satirical series ridiculed the couple's demands for privacy while on a publicity blitz for the prince's autobiography 'Waaaagh' - a dig at Harry's recent memoir Spare - in last week's brutal episode.

According to a source in California, Meghan spent the last few days ‘upset and overwhelmed’ over how she was portrayed. The source told The Spectator that the Duchess of Sussex 'is annoyed by South Park but refuses to watch it all.'

Earlier today, a royal commentator said Harry and Meghan's lawyers are 'casting an eye' over South Park.

The South Park episode, titled 'Worldwide Privacy Tour' pokes fun at Harry and Meghan's grievances while Meghan is introduced as a 'sorority girl, actress, influencer, victim'
The South Park episode, titled 'The Worldwide Privacy Tour', pokes fun at Harry and Meghan's grievances while Meghan is introduced as a 'sorority girl, actress, influencer, victim'....

....MUCH MORE, including the video of their visit to 'Good Morning Canada'. 

Previously on the Princely Duke and his Duchess: 

"Harry and Meghan's Ethic investment firm partnership is highly questionable"

If interested, compare/contrast with another Duchess who showed up on our pages:

Deborah, Dowager Duchess of Devonshire and last surviving Mitford sister has died at 94, her son said
Deborah, Dowager Duchess of Devonshire and last surviving Mitford sister has died at 94, her son said

"Fast-shrinking South Korea breaks own record for world’s lowest fertility rate"

Koreans may be extinct within the lifetime of your great-grandchildren. Not their great-grandchildren, they won't have any, but yours.

From The South China Morning Post, February 22:

  • Just 249,000 babies were born in South Korea last year – a fertility rate of 0.79 compared to 0.81 the year before – while about 373,000 people died
  • The country has the world’s fastest-shrinking population among economies with per capita GDP of at least US$30,000, according to the UN and World Bank

South Korea’s fertility rate, the world’s lowest for years, has fallen again, aggravating the challenges of ageing demographics for the economy. The number of babies expected per woman fell to 0.78 last year, according to data released by the statistics office on Wednesday. At 0.81 in 2021, it was already the lowest among more than 260 nations tracked by the World Bank.

The lack of babies carries long-term risks for the economy by reducing the size of the workforce that underpins its growth and vitality. Welfare spending for an ageing population also drains national coffers that could otherwise be utilised to promote businesses, research and other enterprises that are key to prosperity.

A shrinking workforce is a major cause of South Korea’s declining potential growth rate. The working-age population peaked at 37.3 million in 2020 and is set to fall by almost half by 2070, according to Statistics Korea....


Probably related:
75% Of Young People Want Out Of Korean Techtopia

CORRECTED—Berkshire Hathaway - Backed BYD and Berkshire Hathaway - Owned NV Energy To Build Giant Battery In Las Vegas (BRK, TSLA)

Original post: 
The news did not cross on BusinessWire, A Berkshire Hathaway company, so they missed a trick.

Correction: Switzerland's Energy Vault, the third party to the deal did release the news on BusinessWire: 

NV Energy Selects Energy Vault for 440 MWh Energy Storage System in Nevada

Original post:
Re: Berkshire's ownership of BYD, they've sold off 95 million of the original 225 million-share position but still hold 130.3 million shares.

Re: NV Energy, it is the successor to the old Sierra Pacific Resources + Las Vegas-based Nevada Power and part of the Berkshire Hathaway Energy stable of utilities and transmission (including a lot of gas pipe) assets.

From CnEV Post, February 7:

BYD to begin construction of 543 MWh energy storage system in Las Vegas in Q2

has launched the deployment of the project, which will begin construction in the second quarter and is expected to be in commercial operation by the end of the year.

BYD has launched the deployment of a 543 MWh Cube Pro liquid-cooled energy storage system in Las Vegas, with construction set to begin in the second quarter of 2023 and commercial operation expected by the end of the year.

The Chinese new energy vehicle (NEV) and battery giant revealed the information in a February 6 press release, saying the project will help Nevada's largest power provider achieve its goal of zero carbon emissions by 2050.

BYD did not mention the name of the customer, though Nevada's largest power provider is NV Energy, owned by Warren Buffett's Berkshire Hathaway Energy.

BYD is also a Warren Buffett-backed company, and the legendary American investor first bought BYD shares through Berkshire Hathaway Energy in September 2008 and first reduced his holdings on August 24, 2022.

The Las Vegas project aims to store and dispatch excess renewable energy sources such as wind and solar....


HT: Electrek named CnEV as the source for their story on the deal.

And the reason for this ramble:

In addition to the vehicles Mr. Musk is building a pretty big energy storage division.

Capital Markets: "Potential Brexit Breakthrough Helps Sterling, while France and Spain Report Stronger Price Pressures"

 From Marc to Market:

Overview: There are two important developments. First, the stronger than expected February inflation reports from France and Spain have sparked a jump in European interest rates and the swaps market is beginning to price in a 4% terminal rate by the European Central Bank. The deposit rate is now at 2.50% and is widely expected to rise to 3.0% in the middle of next month. Second, a tentative agreement to resolve the dispute over the Northern Ireland protocol has helped lift sterling. The US dollar is mixed and poor GDP figures are weighing on the Swedish krona, the weakest among the G10 currencies today, while rising rates weigh on the yen following the large contraction in Japan's industrial output (-4.6%) that was not completely offset by the stronger retail sales (1.9%), which appear to have been flattered by tourism.

Asia Pacific equities were mixed, with China, Japan, South Korea, and Australia posting modest gains, while most of the other large bourses fell. Europe's Stoxx 600 is little changed after yesterday's 1% advance. US equity futures are steady to a little firmer. European 10-year benchmark rates are mostly 6-8 bp higher, while two-year yields are 5-7 bp higher. The 10-year US Treasury yield is a couple of basis points firmer near 3.94%. Gold snapped a five-day decline yesterday but has given the gains back and made a marginal new low for the year, slightly below $1805. April WTI is up about a dollar, and it could be the third advance in four sessions. US natgas bottomed last week slightly below $2, gapped higher yesterday to reach $2.74 and is consolidating so far today. Europe's benchmark remains in its trough, straddling the 50-euro mark.

Asia Pacific
China's economic recovery is gaining ground and the forecasts for tomorrow's PMI looks for more gains. The composite was below the 50 boom/bust level in the last three months of 2022 (finishing at 42.9) but jumped back to 52.9, the highest since last June in January. The February reading is expected to rise further as the manufacturing and service PMIs likely rose. It will be reported early on March 1....

Monday, February 27, 2023

"Wheat Futures Drop to 17-Month Low Amid Ample Supplies"

Commodities are mean-reverting sumbitches.*

From Bloomberg via Yahoo Finance, February 27:

Wheat futures declined to the lowest in 17 months amid ample near-term supplies.

The most active contract fell 1.6% to settle at $7.10 a bushel, the lowest since September 2021. The grain heads for a decline of 6% this month, the biggest monthly loss since November. Top-shipper Russia is expected to post record-high exports in the second half of the season, while Ukraine is seeking to extend its Black Sea grain-export deal by one year.

Strong regional supplies are making sales more competitive, weighing on futures as traders expect the safe-corridor deal to be extended, according to Terry Reilly, senior commodities analyst at Futures International LLC. The Black Sea corridor deal ends in mid-March and negotiations for its renewal already have started....

*From February 18, 2021, the essence of what I know about commodities
Commodity Supercycle Or Not?
The key to cycles in commodities from extractive industries - oil, gas, metals - is investment while the key in agricultural commodities are the substitution effects at both the producer - does farmer Brown expect more profit from corn or wheat - and the consumer - chicken or steak - levels....

Dec. 2010 
Société Générale's Dylan Grice-"Commodities: ‘Their Expected Long-Run Real Return is 0%’"

April 2013
"From Boom to Bust: A Typology of Real Commodity Prices in the Long Run" Plus a Compendium of Dylan Grice at Société Générale, 2009-2012

Attention Despots and Tyrants, Generative AI Could Be The Authoritarian Breakthrough in Brainwashing You've Been Waiting For

Have you ever found yourself sitting at home in the Palace thinking: "If only there was an easier way to get people to do my bidding?" Well now there is, take your nudge game up a notch with the Climateer "They'll think it's free will" starter pack.

From The Hill, February 27:

Generative AI is poised to be the free world’s next great gift to authoritarians. The viral launch of ChatGPT — a system with eerily human-like capabilities in composing essays, poetry and computer code — has awakened the world’s dictators to the transformative power of generative AI to create unique, compelling content at scale.

But the fierce debate that has ensued among Western industry leaders on the risks of releasing advanced generative AI tools has largely missed where their effects are likely to be most pernicious: within autocracies. AI companies and the U.S. government alike must institute stricter norms for the development of tools like ChatGPT in full view of their game-changing potential for the world’s authoritarians — before it is too late.

So far, concerns around generative AI and autocrats have mostly focused on how these systems can turbocharge Chinese and Russian propaganda efforts in the United States. ChatGPT has already demonstrated generative AI’s ability to automate Chinese and Russian foreign disinformation with the push of a button. When combined with advancements in targeted advertising and other new precision propaganda techniques, generative AI portends a revolution in the speed, scale and credibility of autocratic influence operations. 

But however daunting Chinese and Russian foreign disinformation efforts look in a post-GPT world, open societies receive only a small fraction of the propaganda that Beijing and Moscow blast into their own populations. And whereas democratic powers maintain robust communities of technologists dedicated to combating online manipulation, autocrats can use the full power of their states to optimize their propaganda’s influence.

In 2019, China’s Xi Jinping demanded just that when he ordered his party-state to leverage AI to “comprehensively increase” the ability of the Chinese Communist Party to mold Chinese public opinion. Russia’s Vladimir Putin has similarly doubled down on AI-enabled propaganda in the wake of his Ukraine invasion, including a fake video of Ukrainian President Volodymyr Zelensky calling for Ukrainians to surrender. These efforts are buttressed by a dizzying array of Chinese and Russian agencies tasked with thought control, cultivating a competitive ecosystem of digital propaganda tools underwritten by multibillion-dollar budgets each year.

China and Russia are, in other words, fertile ground for generative AI to usher in a historic breakthrough in brainwashing — a recipe for more international catastrophes, greater human rights abuses, and further entrenched despotism. As China refines and exports its techno-authoritarianism, would-be tyrants the world over are likely to cash in on the propaganda revolution

Luckily, companies in the United States and allied nations have largely led the advance of generative AI capabilities....


Batteries sold separately. 

And why is it "lucky" that the U.S. has led the development?

Signposts: "Subprime Auto Lender American Car Center Closes for Business"

From Bloomberg, February 25:

  • ACC employees were informed of the shutdown on Friday
  • The company had pulled a bond sale earlier in the week

American Car Center told employees the business was closing its doors, a day after it pulled a $222 million bond sale from the market, according to people familiar with the matter.

The used car retailer, which tends to target consumers regardless of their credit history, said in an email to employees on Friday the firm was ceasing all operations, closing its headquarters in Memphis, Tennessee, and that all employees would be terminated by the end of the business day, the people said.

The closure email came a day after the company sent another message to staff saying management and advisors had been working with lenders to improve liquidity and continue operations, the people said. American Car Center, which has more than 40 dealerships across 10 states, is owned by York Capital Management LLC....


Here's a guy who pointed out what was coming back in December:

"something *extremely* alarming happening in the car market"

"Ford’s electric F-150 Lightning weighs 6,500 pounds, at least one-third more than the gasoline version" (F)

From the Milken Institute Review, February 6:

Lightweighting: Putting EVs on a Diet
Cars are too heavy; electric cars are heavier still. And that’s really not a good thing.

Moving more mass requires more energy, so heavier cars are a retrograde step on the road to a net-zero carbon world. Heavier cars do more damage when they hit something or someone. In the United States, where big pickups and SUVs reign supreme, pedestrian fatalities increased by 46 percent from 2010 to 2019. The electric versions may reduce carbon emissions, but they weigh even more: Ford’s electric F-150 Lightning weighs 6,500 pounds, at least one-third more than the gasoline version.

“I’m concerned about the increased risk of severe injury and death for all road users from heavier curb weights and increasing size, power and performance of vehicles on our roads, including electric vehicles,” Jennifer Homendy, chair of the National Transportation Safety Board, said in a speech in January. She singled out General Motors’ EV Hummer, which weighs over 9,000 pounds. “The battery pack alone weighs over 2,900 pounds — about the weight of a Honda Civic,” she noted. “That has a significant impact on safety for all road users.”

Ever-heavier vehicles form a self-perpetuating loop of doom. People in small, light cars feel vulnerable amid the behemoths, so they buy bigger, heavier ones. Powering bigger cars requires bigger engines or bigger batteries, supporting them requires heavier suspension components, stopping them bigger brakes. So vehicles get heavier still. The energy density of lithium-ion storage is much lower than gasoline, so battery storage is bound to be a net loser on poundage. And on and on.

There is a solution: lightweighting. One of those rare technologies that means just what it says, lightweighting is the removal of excess avoirdupois through the use of lighter materials and more mindful design and manufacturing. It had a moment in the sun when the federal government’s corporate average fuel economy (CAFE) standards took effect, and auto manufacturers scrambled to shed pounds. Ironically, the shift to electric vehicles means car makers no longer need to worry about fuel economy and are not incentivized to spend money reducing weight. 

“Once you go green with electric, there is no CAFE,” lamented Andrew Halonen, a lightweighting specialist with Mayflower Consulting. “With the Ford I own, the government helped push the weight down. As soon as Ford goes electric, CAFE goes away, weight goes to the moon and nobody cares.”

Simplify and Then Add Lightness
Lightweighting is nothing new, though the portmanteau seems to have emerged only in the last decade. Colin Chapman spoke the above aphorism in the early 60s and applied the concept to take Lotus Cars to five Formula One World Championships. Chapman’s road-going Lotus Elan weighed a scant 1,250 pounds; by comparison, the 2023 Mazda MX5 Miata weighs 2,341 pounds, and still manages to be the lightest car currently sold in the U.S.

For most automakers, weight was a secondary consideration. But airframe manufacturers and bicycle builders have long embraced lightweighting, turning to increased use of aluminum, high-strength steels and carbon-fiber composites. A lighter aircraft can fly faster and farther on less fuel; a lighter bike makes the most of a rider’s single person-power....



Possibly related:  "British parking association: weight of electric cars causes collapse of parking garages"

The electric F-150 is an interesting story, Ford is obviously aware of some of its problems: 

Electric Vehicle Prices Gone Wild: "The Cheapest Ford F-150 Lightning
Pro Sees Another Price Increase to Nearly Sixty Grand" (F)

It's not just the financing costs as Mr. Musk points out in the post immediately below.

The combination of historically high general inflation, extraordinary price increases for lithium and higher input costs (labor, electricity) for manufacturing means trouble for the mass roll-out of EV's. You will own nothing and enjoy walking....

And finally, circling back to MotorTrend and the Ford Lightning, they had another article on just how much juice you suck up doing truck stuff like towing:

Here's a rather stunning energy density factoid from MotorTrend:

...Before you hitch an Airstream to your electric truck and set out to circumnavigate the country, you need to understand this: With the largest available battery pack, a fully charged 2022 Ford F-150 Lightning electric truck has less energy onboard than a regular F-150 with four gallons of gas in its tank...

That was in July. Despite the handicap MotorTrend just named the Lightning their Truck of the Year.

Sunday, February 26, 2023

"Nickel shows Indonesia how to escape the middle income trap"


From Bloomberg via Mining.com, February 24: 

The value of Indonesia’s nickel exports surged tenfold in five years after it forced buyers to set up refineries in the country. Now Southeast Asia’s biggest economy plans to use that blueprint to catapult the nation into the ranks of higher-income economies by processing everything from copper to fish.

The goal is to double per-capita GDP to $10,000 by 2045, which would bring Indonesia close to the World Bank’s high-income threshold. At the same time, the shift would create new centers of growth outside Java, its richest and most populated island.

“We’re using nickel as the prototype,” said Investment Minister Bahlil Lahadalia. “It’s silly. We have the raw materials, but we sell it to be refined overseas then we import it back. Where did we leave our brain?”

President Joko Widodo points to the economic models of Taiwan and South Korea, two of only handful of nations that managed to escape the so-called middle-income trap by building manufacturing and raising productivity. For decades, Indonesia has relied on exports of raw commodities — an economic strategy prone to the so-called resources curse, where mineral rich nations suck in investment in mining during boom times, but suffer when commodities prices tumble.

The new roadmap to more onshore processing will begin with oil and gas this year, then fisheries. Down the line, Indonesia will only export refined palm oil, coconut products, timber, seaweed and even salt. The government estimates the drive could pull in $545 billion of investment — about half the country’s current nominal GDP.

“We used to sell the Indonesia story by the numbers: 280 million people, thousands of islands, and so on. That’s promoting history, not investment,” Lahadalia said. “Now we tell them: ‘What industry do you want? Here’s what you can make and here’s where you can do it.’”....


Ha, I say!

If interested see January's "Rio Tinto–backed firm InoBat plans to build battery gigafactory in Serbia":....Although the story of why the deposit has not been mined is complicated (see links in intro if interested), one thing is certain, these resource-rich little countries want to be left with something much higher up the value chain than just a hole in the ground.

And February 8's "Indonesia's President Jokowi ‘confident’ Tesla Will Invest (TSLA)":

We've been pitching Indonesia for a while. The introduction to June 2021's "Indonesia and Coal":

An indigenous battery industry would capture some of the value-added from the country's world-class nickel resource. Elon Musk went to New Caledonia to secure a supply. He should have gone to Indonesia. And maybe built a gigafactory.

As we saw back in April regarding Sulawesi:

Tesla Inc.’s Elon Musk has said nickel is the metal that concerns him most as he looks to scale up battery-cell production, and last year he promised a “giant contract” for miners to encourage production. Without new sources of supply, the robust EV industry could face a critical shortage within a few years.....

Capture some of the downstream profits and you have a bit more wiggle room to deal with the coal.

Now we have two stories via Mining.com. First up, the headliner from Reuters, February 1:

Indonesian President Joko Widodo is confident Tesla Inc will finalize a deal to invest in a production facility in his country, having offered the US car maker incentives ranging from tax breaks to a concession to mine nickel.

Southeast Asia’s largest economy has been wooing Tesla to invest in battery and car manufacturing since 2020, seeking to leverage its rich reserves of nickel ore, which can be processed for use in EV batteries.

The president, widely known as Jokowi, has held talks with Tesla Chief Executive Elon Musk twice, meeting him in person at his SpaceX facility in Texas last year and a telephone call, to try to secure a deal.

“I said to him that if you invest in Indonesia, I will give the concession of nickel,” Jokowi said, referring to Indonesia’s offer of a mining concession.

Other incentives include tax breaks and a subsidy scheme on EV purchases to build a market for Tesla in the world’s fourth most populous country, he said, adding that his ministers were finalizing the subsidies.

The president said he was “confident” Indonesia had the edge over other countries Tesla might be considering for investment because it has the largest nickel reserves and a big domestic market.

Jokowi said it was up to Tesla to take up the offer to mine nickel, underlining that Indonesia is open to investment in the EV battery and electric car supply chain.

“If they want to start from EV battery, it’s OK,” he added....


And February 6:

Like Musk, nickel-rich Indonesia has high electric vehicle ambitions

Armed with the world’s largest reserves of nickel and a ban on the export of nickel ore, Indonesia is making itself indispensable for the electric vehicle industry, which uses the metal extensively.

In just three years, Indonesia has signed more than a dozen deals worth more than $15 billion for battery and electric vehicle production in the country with manufacturers including Hyundai Motor, LG Group and Foxconn.

Next up is the mammoth Tesla Inc, the world’s most valuable automaker. President Joko Widodo has pulled out all the stops to convince CEO Elon Musk to manufacture electric vehicles or batteries in the sprawling Southeast Asian archipelago.

“I’m very confident this industry will grow quickly, will grow very fast,” the president, popularly known as Jokowi, said in an interview last week.

Indonesia has a total of 21 million tonnes in proven reserves with nickel content, according to the US Geological Survey. That is nearly a quarter of the world’s reserves.

The country mined 1.4 million tonnes of nickel in January-November last year, according to the International Nickel Study Group. That’s far ahead of the second-biggest producer, the Philippines, which mined 290,000 tonnes in the same period, and more than double Indonesia’s output of 606,000 tonnes in 2018.

Jokowi banned exports of nickel ore in 2020, but allowed export of higher value nickel products – forcing companies to process and manufacture onshore.

Indonesia’s exports of processed nickel then swelled to more than $30 billion in 2022 from about $1 billion in 2015.

Indonesia is expected to account for half of the global production increase in nickel between 2021 and 2025, according to the International Energy Agency, as demand for electric vehicles surges. Each vehicle uses up to 40 kg of nickel....

Previously on Indonesia:

 And very related:

Rio Tinto Continues To Spend Money In Serbia Despite Being Rejected On Europe's Largest Lithium Deposit

I'm starting to get a bit of a RoÈ™ia Montană  vibe from this one.

From Balkan Insight, February 23:

A BIRN investigation shows that Rio Tinto has spent more than a million euros on land in Serbia at the proposed site of a lithium mine that was eventually cancelled a year ago, while a redacted readout of a meeting with the EU makes clear the company’s fear of a national referendum on the issue.

Media: "Bari Weiss' "The Free Press, is estimated to be bringing in around $2.5m in reader revenue per year"

From The New Statesman, February 23: 

How Bari Weiss broke the media The culture war at the New York Times crushed Bari Weiss - and made her.

A fight is raging at the New York Times – a fight that has been raging for years across the American media. The questions raised by this battle are fundamental. What can a journalist report on? What can a paper publish? In the past fortnight, dozens of unionised New York Times contributors signed an open letter criticising the paper’s coverage of trans issues, singling out some of their colleagues by name.

In response, the paper’s editor, Joe Kahn, and opinion editor, Kathleen Kingsbury, made clear that the paper stood by its coverage. Now some of the paper’s leading journalists, including its chief White House correspondent, Peter Baker, have published a letter in reply, criticising the paper’s union and arguing: “We are journalists, not activists. That line should be clear.”

These tensions have been bubbling for half a decade. All of the fury playing out on social media has an antecedent: in the story of Bari Weiss.

Many American journalists – along with other, less fully employed writers, podcasters and allies – loathe Weiss. Their dislike is axiomatic. They do not need to refer to her by name when they traduce her online; they all know who they are talking about. “Bafflingly awful, even for her,” wrote one male reporter after a piece by Weiss in 2019 that they had all decided was Very Bad (by then, anything she did was Bad by default). “Like an infant did a book report,” the man affirmed, safe in the knowledge that his view of this female journalist was almost universally shared by his media set, at least among those who felt able to tweet.

In trying to destroy Weiss, that media set made her. Since 2017, Weiss has gone from being an unknown books editor at the Wall Street Journal to the founder of one of the biggest political platforms on Substack, via the opinion pages of the New York Times. Her news and comment site, the Free Press, is estimated to be bringing in around $2.5m in reader revenue per year, and is growing quickly. The venture has also attracted outside funding from major investors in, friends of Weiss tell me, both the San Francisco tech class and an older generation of Jewish backers in New York who see Weiss as a voice of sanity in a journalistic generation they do not understand.

In December, Weiss was granted access by Elon Musk to what became known as the “Twitter files”: the first instalment of which concerned a series of internal documents detailing Twitter’s decision to suppress news coverage about Hunter Biden’s leaked laptop in the weeks before the 2020 election. The release of these documents, which Weiss said showed the “incredibly cozy relationship between… the FBI and Twitter [prior to Musk]” and “the unbelievable power that basically a handful of private companies have over the public discourse”, led to Weiss’s Twitter audience all but doubling; she added 450,000 followers in a fortnight.

Weiss has left New York for Los Angeles, relocating there with her wife, Nellie Bowles, another journalist who felt she was forced to flee the city’s media by a certain social milieu. “You are dating a Nazi,” one New York Times editor is reported to have howled at Bowles after she and Weiss started seeing each other – “a f***ing Nazi!”... 


Good grief. Here's The New Statesman doing some serious journalism and I'm thinking "Nellie Bowles? The heroine in Cabaret? Is that the Nazi reference"


No, that was Sally Bowles. Isherwood. Goodbye to Berlin. All that. But not All that Jazz, that was a different Fosse flick.

Warren Buffet On Stock Buybacks: He Likes Them (BRK; AAPL; AXP)

As well he should.

"When you are told that all repurchases are harmful to shareholders or to the country, or
particularly beneficial to CEOs, you are listening to either an economic illiterate or a
silver-tongued demagogue (characters that are not mutually exclusive)."

—Warren E. Buffet, Letter to the Shareholders of Berkshire Hathaway

Here's the section of his 2022 letter to shareholders, published to the internet February 25, 2023:

....A very minor gain in per-share intrinsic value took place in 2022 through Berkshire share repurchases as well as similar moves at Apple and American Express, both significant investees of ours. At Berkshire, we directly increased your interest in our unique collection of businesses by repurchasing 1.2% of the company’s outstanding shares. At Apple and Amex, repurchases increased Berkshire’s ownership a bit without any cost to us.

The math isn’t complicated: When the share count goes down, your interest in our many businesses goes up. Every small bit helps if repurchases are made at value-accretive prices. Just as surely, when a company overpays for repurchases, the continuing shareholders lose. At such times, gains flow only to the selling shareholders and to the friendly, but expensive, investment banker who recommended the foolish purchases.

Gains from value-accretive repurchases, it should be emphasized, benefit all owners – in every respect. Imagine, if you will, three fully-informed shareholders of a local auto dealership, one of whom manages the business. Imagine, further, that one of the passive owners wishes to sell his interest back to the company at a price attractive to the two continuing shareholders. When completed, has this transaction harmed anyone? Is the manager somehow favored over the continuing passive owners? Has the public been hurt?

When you are told that all repurchases are harmful to shareholders or to the country, or particularly beneficial to CEOs, you are listening to either an economic illiterate or a silver-tongued demagogue (characters that are not mutually exclusive)....

That's on page 5 of the 10 page PDF, emphasis in the original.

I'm guessing that Mr. Buffet is responding to both the new 1% tax on corporate buybacks and the 7.5% corporate alternative minimum tax on unrealized capital gains.

Behind Mr. Buffet's "Aw shucks" folksy demeanor is a riverboat gambler who also has an  absolute lust for tax efficiency/deferral, along with any tax credits he can scoop up: for a few different reasons Berkshire Hathaway Energy runs a huge fleet of wind and solar electricity generation and the tax incentives are a big part of the calculation.

If interested here is the two-page Feb. 25 earnings release via BusinessWire, a Berkshire Hathaway company.

The Rhine, Europe's Watery Lifeline, Is Drying Up Again

From Bloomberg via gCaptain, February 24:

Europe’s Parched Lifeline Flashes Trade Disruption Warning

Shallow waters on the Rhine are disrupting barge traffic and forcing up the cost of shipping, an early indicator the continent may need to brace for a redux of the seismic economic shock caused by last year’s drought.

At Kaub, a key waypoint in western Germany, the river-measure is the lowest it’s been this time of year since 2017. Any barges planning on hauling diesel further into inland Europe are restricted to loading at about half-capacity. Take on a full cargo, and the vessel will sit too low in the channel.

“For the time of year, it’s quite bad,” said Mitchell van der Hoeven, a ship broker at Riverlake, which handles barging on the continent’s inland waterways. “We might get into a situation that we had last summer, where production will need to be cut or stopped.”

An atypically mild winter and concurrent lack of precipitation are having consequences across Europe, particularly for farmers and energy producers. Much of France and the southern UK has had less than a quarter of normal rainfall in the past 30 days, and some growers are trimming plantings of potatoes, carrots, parsnips and onions because there may not be enough water to irrigate them in the coming months.

“I can’t take that risk,” said Andrew Blenkiron, a farmer in Suffolk, England, who’s cutting the acreage for those crops by a quarter. December and January rainfall totaled about half the average, and just 3 millimeters (0.1 inches) fell so far in February....


February 24: 

Shades of Jim Chanos: Former FT Alphavillain Jamie Powell Highlights A Big Problem For Stripe (plus CAC 40 outperformance)

From Mr. Powell's Twitter feed:

In the second of two links to NZZ's TheMarket.ch in Feb. 23's, "A Number of Inflationary Forces Will Remain in Place For a Long Time"— Former BIS Chief Economist (plus a driveby from Jim Chanos on Tesla) Mr. Chanos said, in response to a couple of the interviewer's queries:

....Do you spot companies where there could be fraud involved?

At year end 2022, 60% of our portfolio by capital showed some sort of questionable accounting or outright fraud. The biggest fraud is hiding in plain sight which is the misuse of pro forma accounting, in particular in Silicon Valley where companies are adding back all kinds of expenses – especially equity-based compensation – to the P&L statement. Uber's CEO was recently crowing about their adjusted profitability, but Uber is actually losing money. Or take GE. They put out a press release on their earnings two weeks ago that had 16 pages of adjustments. So what is the real earnings number? Pro forma accounting is really misleading, particularly when it comes to share-based compensation because of its dilutive nature.

Share-based compensation was also an issue in 2000.

Right, and there was no stock option expensing until 2006. The share count has gone up dramatically recently, and it gets worse when stocks drop because companies then issue even more shares from their underwater options, as they did by 2003. A company having 100 mio. shares outstanding in 2000 had 1 bn. shares outstanding by 2006. Coinbase will show $500 mio. in revenues for the quarter just ended, while their share-based compensation will be $400 mio. That’s 80% of Q4 revenues. I think we’re going to look back on that and say the regulators should have stepped in and stopped these questionable reporting practices....

Finally, a comparison of Frances's CAC40 index and the S&P 500:

Saturday, February 25, 2023

Transnistria: "The largest illegal arms depot in Eastern Europe"

From the Czech environmental NGO, Arnika:

A possible explosion of huge deposits of military material would cause an ecological and human disaster.

The military depot in Cobasna was created in the 1940s in the Ribnita district, then the Moldavian SSR, now the separatist region of Transnistria.

During the Soviet period, the artillery ammunition depot no. 1411 was a strategic arsenal of the western military district of the USSR. Most of the ammunition was stored here after the withdrawal of Soviet troops from the former German Democratic Republic (GDR), Czechoslovakia, and other countries in the former Warsaw Pact.

Currently, about 20,000 tons of weapons and ammunition are stored at this warehouse, of which 57% are obsolete and cannot be used or transported, and access to the area is strictly prohibited, being controlled by Transnistrian and Russian peacekeeping forces. A possible explosion of these deposits, which cannot be transported, would cause an ecological and human disaster.

The ammunition depot in Cobasna presents a serious technogenic and ecological danger not only for the Republic of Moldova but also for Ukraine. In 2005, the Academy of Sciences of the Republic of Moldova published an expert report on the threats posed by the accumulation of weapons in the Transnistrian region.

A possible explosion of the military depot in Cobasna can be compared to the detonation of a 10-kiloton nuclear bomb, which was dropped on the city of Hiroshima in 1945.

After the explosion, a crater with a radius of 1.5 kilometers and a depth of 75 meters would form. However, given that Cobasna is located in a rural area, the range of the explosion can reach 40-50 kilometers. Therefore, the effects of the explosion can be compared to the damage caused by an earthquake of 7-7.5 degrees....


 Recently on Transnistria: 

“The Russian troops in Transnistria must be expelled.”—New Prime Minister of Moldova

"White House 'Deeply Concerned' About Putin's Reported Power Grab"

The Cocoa Frontier And A Lenten Dilemma

A twofer. First up, Adam Tooze at his Chartbook substack, February 19:

Chartbook #196 The Closing of the Cocoa Frontier 

This Valentines day, Americans gifted each other in the order of 58 million pounds of chocolate, much of it wrapped in 36 million heart-shaped boxes. It was a particularly busy period for the global chocolate industry, which in 2020 processed c. 5 million tons of cocoa beans into chocolate confectionary, generating around 130 billion dollars in revenue. The cocoa-chocolate business is an agro-industrial complex that has emerged from millennia of human ingenuity and entrepreneurship mixed with commerce, political power and violence. At the front end are well known chocolate brands, the likes of Cadbury, Mars, Lindt and so on. Behind them are the grinder-traders, giant agro-industrial trading corporations like Cargill. There would be no chocolate, however, without the cocoa beans and they are grown overwhelmingly on small peasant plantations, most no larger than 3 hectares, yielding 300-400 kg in beans per hectare and worked by c. 6 million farming families. Together with their families, perhaps 50 million people are directly involved in cocoa cultivation and processing, including many youths and children. A rough calculation suggests that the cocoa-farming dependent population worldwide outnumbers the entire farming population of the United States and Europe. At 14 million the main workforce on the cocoa farms significantly outnumbers the 9 million workers engaged in motor vehicle production worldwide.

Recently, Indonesia has emerged as a major grower. Both Central and South America, the original home of the cocoa bean, still contribute to global supplies. But 70 percent of the world’s cocoa beans come from West Africa and 60 percent from the farms of just two states, Ghana and Cote d’Ivoire (CdI). In a year of good harvests, CdI with a yield of well over 2 million tons of beans, can account for 40 percent of the global production. De facto the global pyramid of chocolate confectionary balances on the peasant producers of Ghana and CdI who have been the drivers of a production revolution of huge scale.


What first catches the eye about this supply chain are the spectacular hierarchies of power. For journalistic purposes and in NGO campaigns, these hierarchies are commonly dramatized in two clichés. The first is the contrast between the tiny peasant producer and the agro-industrial multinationals. The second is that between Western consumers of chocolate and child labourers in the cocoa plantations.

One piece of recent research by Staritz, Tröstere, Grumiller and Maile maps the global supply chain as follows:....

....MUCH MORE (he's just getting warmed up 

And from History Today, March 3, 2022:

The introduction of chocolate to the Catholic world caused a dilemma: could it be eaten? Should it be given up for Lent?

....In 1636 an Inquisition lawyer, Antonio de León Pinela, rebutted Antolínez in a long tract entitled Questión Moral: ¿si el chocolate quebranta el ayuno eclesiástico? (The moral question: does chocolate break the fast or not?). But in 1645 Tomás Hurtado, who hailed from the relatively obscure new order of Clerics Regular Minor, wrote a further defence: Chocolate y tabaco; ayuno eclesiástico y natural (Chocolate and tobacco; the ecclesiastical and natural fast). 

Eventually the Jesuits, who by this time had commercial interests in cacao production and distribution, took the case back to Rome. They secured a favourable ruling from no less an eminence than the theologian Cardinal Francesco Maria Brancaccio, who put his name to a 16-page opinion De Chocolatis potu (On the use of chocolate, 1664), which reaffirmed Hurtado’s arguments. The Jesuits published this immediately, reprinting it at least four times in the next decade....


"Ambitious 170-km-long Saudi skyscraper city gets construction go ahead"


From New Atlas, February 23:

The idea of taking a population the size of New York City and putting it into a 170-km (105-mile)-long skyscraper in the Saudi Desert seems so ambitious that anyone could be forgiven for being skeptical. However, the project, named the Line, is indeed going ahead, and UK firm Atkins has been commissioned to help realize it.


To recap what we already know, in addition to its incredible length, the Line is expected to reach a supertall height of 500 m (1,640 ft) and a width of 200 m (656 ft). It will stretch over desert, mountain, valley and coastal terrain, and will have a mirrored exterior, so hopefully some kind of system can be put in place to ensure it doesn't decimate the local avian population. Its interior will include housing, parks, hospitals – basically everything you'd expect to find in a major city.

As if all that wasn't ambitious enough, the plan is for it to run from 100 percent renewable energy, though we've no information yet on what this will entail. Even putting aside the task of building and powering the linear city, just keeping so many people hydrated, fed, and comfortable while getting rid of their waste in a desert location is a challenge in itself. So how will they go about it? Well, according to Reuters, the Line will make use of AI tech to manage such issues and will rely on surveillance of its inhabitants to help it predict user needs....


Again, why?

Here's the real deal, a megalopolis 600 miles long that will have a population of 500,000,000 by the end of the century:


Last seen in November 2022's "Megalopolis: how coastal west Africa will shape the coming century"

"How to fix global warming? Bring back rationing"

From The Times (UK), February 20: 

Second World War-style rationing of petrol, household energy and meat could help to fight climate change, British scientists have recommended. Researchers from Leeds said that rationing would help countries to cut their carbon emissions “rapidly and fairly” even though it was often seen as an “unpalatable” option.

Making a comparison with the need to limit the consumption of certain goods as they grew scarce during the war, researchers noted that the idea of achieving this by increasing taxes was rejected in the 1940s because “the impact of tax rises would be slow and inequitable”. Their study, published in the journal Ethics, Policy & Environment, noted: “Rationing has been neglected as a climate change mitigation policy option.” It added that rationing was widely accepted in Britain during the conflict, explaining: “As long as there was scarcity, rationing was accepted, even welcomed or demanded.”

Rationing did not end in Britain until 1954, nine years after the end of the war.

The researchers said: “Rationing is often seen as unattractive, and therefore not a viable option for policy-makers. It is important to highlight the fact that this was not the case for many of those who had experienced rationing. It is important to emphasise the difference between rationing itself and the scarcity that rationing was a response to. Of course, people did welcome the end of rationing, but they were really celebrating the end of scarcity, and celebrating the fact that rationing was no longer necessary.”

The paper notes, however, that people may “not accept rationing when there is an abundance of resources available”. The researchers argue that, as a first step, governments would need to regulate sectors such as the oil industry, with the importing of fossil fuels “banned or restricted” in certain areas. This would create a scarcity of fossil fuels, with rationing then introduced to “manage the scarcity”, they explain....


Here is the press release from the University of Leeds: "Rationing: a fairer way to fight climate change?

Here's the paper, "Rationing and Climate Change Mitigation", open access at Taylor & Francis Online.

And in other global warming news:

January 2021: Investing—In Greenhouse Gas World Bill Gates Sees Bright Future For Private Jets

February 2023: 'I'm part of the solution': Bill Gates says he'll keep using private jets, campaigning on climate change