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December 2006

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• Perspective  
• Geopolitics * Risk and terror
• Energy * Climate Change
• IT
• Integral systems and LOHAS
• Activities and Media
• For investment and trade notes see GRI Equity Review

Perspective

December seemed to bustle for three weeks and then sigh as people attended to year end projects, then escaped for a holiday with friends and family. But the mood was spoiled at month end by bombings in Bangkok, earthquake in the Pacific and the hanging of Hussein. Although western society takes some time to party for Christmas, it was ironic that at the time of peace and goodwill, the President of a country invaded without due process was hung to death in a dark and dirty room. It is not the spirit of humanity that Jesus lived and died for. Even an atheist like me has learned that punishment begets violence, not rehabilitation. I hope we can help each other to do better.

The passionate words of Martin Luther King below, which were sent to me in December, were made poignant in 2006 as the rallying call for peace was picked up by global leaders from the US to China.

Geopolitics

In a review in early December, Morgan Stanley's Stephen Roach characterised the underlying shift in economic productivity from capital to labour, because profits have been above trend and labour prices stagnant. This will compound any slowing of the US economy precipitated by housing price declines and will result in a different global geopolitical playing field. Quoting:

" I suspect that the focus is likely to shift away from the brilliant successes of China and India toward an increasingly politicized pro-labor pushback from the rich countries of the developed world. The income shares of the major industrial economies are all at extremes -- record high returns to capital and record lows for labor shares. Courtesy of an increasingly powerful IT-enabled globalization that is now affecting both tradable manufacturing and once non-tradable services, job growth and real wages in the high-cost developed world remain under unusual pressure. That's great for corporate profits but very tough for real wages. A pro-labor shift in the political power base of the industrial economies -- already evident in the US, Germany, France, Italy, Spain, Japan, and possibly Australia -- could lead to a reversal of these trends. It opens up the possibility that the pendulum of economic power might well begin to swing from capital back to labor. Such a development, in conjunction with our forecast of a significant slowing in global GDP growth, implies a weaker-than-expected top line for global businesses. That could have profound consequences for the earnings cycle that continues to underpin ever-frothy world financial markets. Moreover, to the extent any pro-labor shift has protectionist overtones, it could also prove to be a stern test for globalization, itself.

In looking to 2007, my main message is to be wary of extrapolation. After a powerful four-year boom, an important transition lies ahead for the world -- both on economic as well as on political terms. The consensus appears to be unprepared for the full extent of the transition that could well occur -- banking on the benign outcome of a soft landing in the US to be offset by accelerating growth elsewhere in a decoupled world. The official baseline forecast of the IMF is quite consistent with such a sanguine prognosis. It calls for a 4.9% increase in world GDP next year -- virtually identical to the 4.8% average gains over the 2003-06 period. The Morgan Stanley forecast of 4.3% global growth is already well below that consensus. As post-housing bubble adjustments begin to play out in the US, the lags of an interdependent and still unbalanced global economy are only just beginning to kick in. And a new group of politicians is only just beginning to take the reins of power. All this underscores the possibility that we may not have gone far enough in factoring in the downside risks to global growth in 2007. Transitions are never easy -- especially when juxtaposed against the complacency spawned by four fat years."

Early December saw a US delegation including Treasury Secretary Paulson visit China. The visit was made in the spirit of cooperation though the US complained about issues like currency and human rights.   However, as noted in the Interest Rates and Currencies section, the US dollar is under more pressure from Gulf states rich in petrodollars from high oil prices.  Also, as noted last month, the US record on Human Rights is not unblemished.

The US signed into law a historic agreement allowing the United States to export civilian nuclear fuel to India. Bush and Indian Prime Minister, Manmohan Singh agreed on the deal in principle in July, 2005. Once on opposite sides of the Cold War fence, India and the US have become allies with close economic, political and even defence ties. Critics say it will harm efforts to stop the spread of nuclear weapons as India has not signed the nuclear Non-Proliferation Treaty. However, there are three more hurdles to overcome.

• India and the US have to agree terms for the lucrative trade deal by which the US sells India nuclear technology and fuel - the US Congress has to ratify the deal

• The International Atomic Energy Agency has to approve a separate nuclear inspection programme

• The Nuclear Suppliers Group, an assembly of nations that exports nuclear material, has to give its approval.

Bush declared a new approach was required on Iraq, the day after the Baker-Hamilton report by the Iraq Study Group called for changing US strategy.  The Iraq Study Group headed by former Secretary of State James Baker and former Democratic Representative Lee Hamilton issued a report saying the war policies had failed and a major course correction was needed.  Baker said he believes the study "is probably the only bipartisan report [the president's] going to get".  The report, which contains 79 separate recommendations, says that Bush's Iraq policy is not working and warns the situation in Iraq is "grave and deteriorating".  It recommends beginning to withdraw combat troops to avoid "a slide toward chaos" in Iraq and calls for most US combat troops to be withdrawn by early 2008.  Appropriately, the report advocates launching a diplomatic push that would include Iran and Syria and a sustained US commitment to the Arab-Israeli peace. Other reports under way are by the US Department of Defense (the Pentagon), the State Department and the White House National Security Council. US voters were widely seen as retracting support for Bush's approach in Iraq in the early November elections, amongst other critical issues like corruption, in which his Republican Party lost control of the US Congress and Senate.

Events in Thailand seemed turbulent in December.  There was the Rash 'Lock-Up' Move in which currency controls were put in place, then partially removed and the markets bounced in reaction.  And at year end half a dozen small bombs went off around Bangkok.  Both are disappointing developments but probably not indications of a further deterioration in the economic, political or social climate.

South Korea's Ban Ki-moon was sworn in as the next UN secretary general at a ceremony in New York. Ban, from South Korea, will take up his post as the eighth secretary general on 1 January, 2007. He told ambassadors he would be a "bridge-builder", leading by example as he sought to restore trust in a UN that needed to be "dynamic and courageous". He added his voice to tributes paid to outgoing Secretary General Kofi Annan, saying he was humbled to follow him.

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Risk and Terror

Israeli Prime Minister Ehud Olmert sparked a political uproar after a slip of a tongue in which he for the first time admitted that Israel possesses nuclear weapons. Israel, widely considered the Middle East’s sole nuclear power – with an arsenal estimated at 200 atomic warheads – has for decades maintained a policy of nuclear ambiguity, neither admitting nor denying that it does posses atomic arms.  Speaking on German TV Olmert came close to admitting that his country has nuclear weapons when he said Israel did not threaten "any nation with annihilation" while Iran openly threatened to wipe Israel off the map.

B'Tselem, an independent group that monitors human rights in the occupied Palestinian territories, reported that Israeli occupation forces killed 660 Palestinians in 2006, three times higher than last year. The death toll included 141 children. At least 322 of those killed were not taking part in hostilities at the time of their death.  22 of the dead were targets of assassinations. In the same period, the number of Palestinian attacks against Israel has fallen – 17 Israeli civilians and 6 soldiers were killed in 2006 compared with 50 the year before. The B’Tselem report said that 2006 saw “a deterioration in the human rights situation in the occupied territories, particularly the rise in the number of Palestinian civilians killed and the destruction of houses and infrastructure in the Gaza Strip." The Israeli army demolished 292 Palestinian houses, 95% of them in Gaza. These were home to 1,769 people. Israel also destroyed 42 homes in East Jerusalem, displacing at least 80 people. The rights group says that movement restrictions in the occupied West Bank became more severe in 2006. Israel currently maintains 54 permanent checkpoints in the West Bank, as well as 12 checkpoints in the city of Hebron.

A number of Jewish rabbis attended Iran’s conference on the Holocaust. One reason they attended the event with several Western "revisionists”, who downplay, or even deny, the Holocaust, is that they also reject the existence of Israel. They are like other Orthodox believers in Jerusalem or New York, but those who attended the international conference  "Review of the Holocaust: Global Vision” in Tehran believe that Zionism, the movement that wishes to recreate Israel (a country that had not existed since BCE, prior to 1948) is unethical and being used for political and economic ends.  Some of them belong to Neturei Karta (Guardians of the City), a group of Haredi (Ultra-Orthodox) Jews who reject all forms of Zionism – the movement to set up a Jewish state in Palestine – as a “poison” threatening “true Jews”. Many of the anti-Zionist Jews who attended the conference came all the way from Europe and the United States. Some wore badges depicting the Israeli flag crossed out. Others wore badges saying: “A Jew, not a Zionist.”    A representative, UK-based Rabbi Ahron Cohen, said he went to Tehran to put the "Orthodox Jewish viewpoint" across. "We certainly say there was a Holocaust, we lived through the Holocaust . But in no way can it be used as a justification for perpetrating unjust acts against the Palestinians," he said. Rabbi Friedman said he wanted  to break a “taboo” on discussing it in several European countries, where it’s a crime to deny the Holocaust. He argues that the main issue concerning the Holocaust now isn’t the suffering of the Jews in the past but its use as a "tool of commercial, military and media power" to legitimize the suffering of other peoples.

Saddam Hussein was executed.   As day broke on one of the holiest dates of the Muslim year, on the first day of Eid ul-Adha, and after more than two years of being held in custody by U.S. forces at Camp Cropper in Baghdad, Iraq's deposed leader Saddam Hussein was hanged at dawn at a Justice Ministry facility in northern Baghdad for crimes against humanity. The former President had been sentenced to death on November 5 (the anniversary of Guy Fawkes' execution) after he was convicted of crimes against humanity for the killing of 148 Shia villagers in the town of Dujail.  "It was very quick. He died right away," said one of the Iraqi officials who witnessed the execution.   Sami al-Askari, a political ally of Prime Minister Nuri al-Maliki said "We heard his neck snap." 

FT comments: The execution on Saturday of Saddam Hussein may have marked the passing of one of the vilest tyrants of the late 20th century. But the way in which the Baghdad hangmen turned it into a public lynching - disseminated around the world courtesy of a mobile phone camera and the internet - will have profound consequences for Iraq, and for the Middle East and those powers that so recklessly meddle in its politics. While President George W. Bush may hail the dictator's demise as another "milestone" on Iraq's path to democracy, it looks just as likely it will turn out to be another paving stone on the road to the sectarian hell into which Iraq is descending. With this squalid act, the Shia-dominated government led by Nuri al-Maliki, has for all practical purposes abandoned any pretence that it aims to govern on behalf of all Iraqis. 

UN human rights experts asked the Iraqi government last month not to carry out the death sentence imposed on the toppled president. A United Nations working group on arbitrary detention said in a statement that the Iraqi tribunal lacked independence and impartiality, didn’t give the former leader enough time to prepare his defence, restricted his access to lawyers and denied him the right to call his own witnesses. Therefore, Saddam’s detention is "arbitrary," said the panel, made up of five independent legal and human rights experts who report to the UN Human Rights Council. The UN group also said that the Dujail trial didn’t meet “international standards” because it violated provisions of the International Covenant on Civil and Political Rights - a binding international treaty and cornerstone of human rights law - to which both Iraq and the United States are parties. "The working group also urges the Iraqi government to refrain from carrying out the sentence of death by hanging imposed in a proceeding, which does not meet applicable basic standards of a fair trial," the statement said.  Although the working group stated clearly that it wasn’t calling for Saddam's release, it said that U.S. and Iraqi authorities must redress the “serious procedural shortcomings”. It also recommended that “the situation of Saddam be brought in conformity with the principles of the Universal Declaration on Human Rights and with the provisions of the International Covenant on Civil and Political Rights.”

In the UK a new law to punish companies for negligence leading to the death of employees or customers is due to be introduced, having been including in the Queen's Speech which lays out Bills to be introduced before the British Parliament. The Corporate Manslaughter Bill is now expected to become law during the coming year.  The Bill as now drafted would see unlimited fines for the company, but not personal liability for directors.  Demand for such a law has grown since a number of high profile disasters, particularly rail crashes. Current legislation theoretically provides a remedy, but proving cases has, in practice, proven almost impossible since it requires that proof be provided that a named senior person has been guilty of gross negligence. The new law will simply require proof of serious failing of senior managers generally in the company's operations.  This is a modest but important step in making companies (which may be immortal) face the same law as individuals (which are mortal).

‘Lessons Learned’   offers recommendations for dealing with unexpected situations such as natural disasters.  It offers a sampling of key “lessons learned” identified by the committee during its deliberations on the Credit Union System National Disaster Preparedness Plan. These are based on first-hand experiences of credit union officials and others during and following disasters and catastrophes, and focus on the impact of these events on credit unions, their members and their staffs.

Pinochet died.  The coup in 1973 that put him in power was backed by the US.  He is remembered for a reign of torture, disappearances and fear.

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Energy

A new economic study by the US National Biodiesel Board shows how biodiesel plants are a boon to the US economy as they sprout up across the US.  America's biodiesel industry will add $24 billion to the U.S. economy between 2005 and 2015 according to a study . The figures foresee biodiesel growth reaching 650 million gallons of annual production by 2015.

Economic Contribution of Biodiesel by Industry 2006-2015

The UK government gave its support to a replacement of the UK's nuclear missile system, Trident, at a projected cost of £20 billion.  The Ecologist spoke to the Chair of the Campaign for Nuclear Disarmament, Kate Hudson, to ask what her objections are, and whether it’s too late already? Listen to the interview by clicking here.  If you were to take the £20 billion earmarked for replacing the Trident missile system and turn it into rockwool and wind turbines, how much impact would you have? To find out, and to hear about how the Pentagon might want to use some spare warheads in tackling climate change, click here, to listen to the Ecologist's exclusive podcast of this week's Campaign for Nuclear Disarmament debate.

According to a new report by the Natural Resources Defense Council, some airports and the airlines that use them are finding creative solutions that pay significant financial dividends while reducing their waste and environmental impacts. According to the report, the airline industry threw out 9,000 tons of plastic in 2004, and enough newspapers and magazines to bury a football field more than 230 feet deep. Nationwide, U.S. airports generated 425,000 tons of waste in 2004 -- a figure expected to increase nearly 45% by 2015. Each passenger today leaves behind 1.3 lbs of trash. 75% of this waste is recyclable or compostable. Yet the industry-wide recycling rate is 20% or less -- one third less than the U.S. average as a whole.  "Airlines in the U.S. throw away enough aluminium cans every year to build 58 new 747s. It's the same story with paper and plastic," said Dr. Allen Hershkowitz, a Senior Scientist at NRDC. "Along with a huge amount of recyclable waste, the industry is away a significant amount of money. And it's not just dollars. These are resources that don't need to be mined, logged or drilled. And by avoiding all that, you save a lot of energy and avoid a lot of emissions.   Once airport managers start adding up the numbers, opportunities start becoming apparent pretty quickly," Hershkowitz said.  "The good news is that smart people in the aviation business have figured this out. Their savings are going right to the bottom line, instead of to the local landfill."

A new study for the US Department of Energy finds that "off-peak" electricity production and transmission capacity could fuel 84% of the country's 220 million vehicles if they were plug-in hybrid electrics.   If all the cars and light trucks in the nation switched from oil to electrons, idle capacity in the existing electric power system could generate most of the electricity consumed by plug-in hybrid electric vehicles.  Researchers at DOE's Pacific Northwest National Laboratory also evaluated the impact of plug-in hybrid electric vehicles, or PHEVs, on foreign oil imports, the environment, electric utilities and the consumer.

For companies (and individuals) seeking to go carbon neutral -- offsetting all of their climate footprint from energy use, purchases, and other activities -- finding quality service providers is getting trickier.   The quality, value and delivery of products and services for carbon-offsets vary widely. That’s the finding of a report released last week by Clean Air-Cool Planet, produced by Trexler Energy+Climate Services. (The company's founder, Dr. Mark Trexler, writes the Ask the Climate Expert column on ClimateBiz.com.)

Notwithstand the teething problems of the ETS, a new report from ICF International says that voluntary markets for carbon are growing faster than ever, increasing to US$ 2.3 billion in the first nine months of 2006. The overall carbon market is now worth more than US$21.5 billion.

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Climate Change and Environment

No snow in Lapland and the warmest year ever?  UK scientists announced that 2006 is right on target to be the warmest year ever recorded in Britain.  It is "very likely" to prove the warmest in the whole Central England Temperature Record, which goes back to 1659, according to researchers from the UK Met Office and the University of East Anglia.It will also beat the record by a considerable margin, with a likely average temperature over the whole year of 10.84 degrees C, compared to the previous record of 10.63, set jointly in 1999 and 1990. The year has been "remarkable", setting a number of new temperature records, the researchers said in a joint statement. These have included:

* the warmest month on record in Britain, set this July, with a mean temperature of 19.7 degrees C;

* the warmest-ever September (16.8 degrees C);

* the warmest-ever April to October, having a mean temperature of 14.6 degrees C.

Asia's greenhouse gas emissions will treble over the next 25 years, according to a report commissioned by the Asian Development Bank, Energy Efficiency and Climate Change: Considerations for On-Road Transport in Asia.  The report provides detailed analysis of the link between transport and climate change in Asia. It says that its estimate of future levels of greenhouse gas could even be an optimistic assessment. Air pollution and congestion will seriously hamper the ability to move people and goods effectively.  Asia currently has low levels of personal motorized transport, which in many cases are motorcycles, but it says that these levels are likely to increase significantly as incomes in these countries grows and the urban population becomes bigger. The report points out that China is already the world's fourth largest economy, and the number of cars and utility vehicles could increase by 15 times more than present levels to more than 190 million vehicles over the next 30 years.

His Royal Highness Prince Charles, The Prince of Wales launched his "Costing The Earth - The Accounting For Sustainability" project at an exclusive forum at St James's Palace attended by parliamentarians, business executives, heads of relevant NGOs, religious and community leaders, academics and philanthropists. In a forthright speech the Prince said, "We are consuming the resources of our planet at such a rate that we are, in effect, living off credit and living on borrowed time... it is our children and grandchildren who will have to pay off this debt and we owe it to them and ourselves to do something about it before it is too late.  ...  There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions.  That time has gone. We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process."  Other speakers included The Bishop of London Richard Chartres; Lord Browne, Chief Executive of BP; and former US Vice President Al Gore.

The British royal family, following the example of the Thai royal family, are taking the matter of "Launching a Green Revolution" increasingly seriously:  The Prince is set to label all his Duchy Originals range with details of greenhouse gases made during their production. The Queen has a plan to use hydroelectric power at Windsor Castle.  The Duke of Edinburgh uses a taxi cab fuelled by LPG to travel around London, while water in a bore hole at Buckingham Palace is used to supply air conditioning to the Queen's gallery before topping up the water levels in the Palace lake.

Scientists have discovered that an enormous ice shelf broke off an island in the Canadian Arctic last year, in what could be sign of global warming.  It is said to be the largest break in 25 years, casting an ice floe with an area of 66 sq km (25 square miles). It occurred in August 2005 but was only recently detected on satellite images. The chunk of ice bigger than Manhattan could wreak havoc if it moves into oil drilling regions and shipping lanes in summer 2007.  A combination of low accumulations of sea ice around the edges of the ice mass, as well as the Arctic's warmest temperatures on record, contributed to the break. The region was 3C above average in the summer of 2005. Ice shelves in Canada's far north have shrunk by as much as 90% since 1906. 

The UK Secretary of State for the Environment, David Miliband, announced that every citizen could be issued with a carbon "credit card" within five years. The Environment Secretary told the Guardian that carbon allowances had "a simplicity and beauty that would reward carbon thrift". The fact that the research, conducted by the Centre for Sustainable Energy, drew inspiration from Tesco loyalty clubcards, however, suggests that a transition to a 'no growth' economy may not be exactly what the Environment Secretary has in mind. Read about how personal carbon quotas might be better introduced in The Ecologist.

China's Ministry of Finance and the State Environmental Protection Administration (SEPA) have announced that starting in 2007, the nation’s central and provincial governments will prioritize their purchasing of environmentally friendly products and services.  The government’s new "green procurement" policy will be implemented at all levels of jurisdiction starting in 2008. The two agencies released a new “green purchasing list” that specifies a range of recommended products carrying the China Environmental Label, China’s only national eco-label for environmentally friendly goods and services. Government purchasers will be required to buy products from the list when these alternatives are available; otherwise financial authorities may refuse to pay for the items. “By purchasing environmentally friendly products and services, the government could become the real driving force for industry to develop green technology,” explained an official with SEPA. Green procurement will play a leading role in raising public awareness of environmental protection, promoting green consumption, and pushing industries toward cleaner production and technological innovation. According to the Ministry of Finance, in 2005 total government procurement topped 292.7 billion yuan ($ 37.2 billion), an increase of 37%  from 2004 and representing 1.6% of China’s gross domestic product (GDP). This year, the total budget for government procurement is estimated to exceed 300 billion yuan (US$38.3 billion). The government expects the new procurement rules will substantially boost the presence of green products in the market.

"Carbon neutral" was recently named Word of the Year for 2006 by The New Oxford American Dictionary.

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IT

Holonics and LOHAS

Holonics * Health * Environment * Education * Living

Holonics

"You" have been named as Time magazine's Person of the Year for the growth and influence of user-generated content on the internet.  Time recognises the power of interconnected humanity in their "story about community and collaboration on a scale never seen before". The US magazine praised the public for "seizing the reins of the global media" and filling the web's virtual world. The magazine said naming a collectivity rather than an individual reflected the way the internet was shifting the balance of power within the media through blogs, videos and social networks.  Time cited well known example websites such as YouTube, Facebook, MySpace and Wikipedia, which allow users to interact with the web by uploading and publishing their own comments, videos, pictures and links. "It's about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes," Time magazine's Lev Grossman writes. Time praised the tool that made such broad collaboration possible - the web. "It's a tool for bringing together the small contributions of millions of people and making them matter," Mr Grossman said. Time aims to pick "the person or persons who most affected the news and our lives, for good or for ill". With Time Magazine recognising the way in which humanity is increasingly behaving as a coherent organism, perhaps it will not be many years before humanity realises it too, and behaves appropriately. 

Futurists, forecasters and strategists may be interested in this discussion: 50 Years Ahead:  Looking to the Challenges of the Future with Horizon Scans.  It covers a range of issues from artificially intelligent robots to ethics and civil rights, to demographic skews to environmental protection.

Health

Doctors writing for the British Medical Journal, "Obesity--Can we turn the tide?" by Mike Lean et al., warn that multiple health problems attributed to obesity could potentially bankrupt national health services in places where obesity is increasing.  More than half the adult population in the United Kingdom is overweight, and more than 20% are obese. The authors estimate that obesity accounts for at least 9% of a country's health-care costs. Preventing obesity in the first place is the most economical long-term solution, recommending that the food industry be more proactive in preventing obesity. Government, too, could curtail advertising of "energy-dense" foods and promote education programs that improve diet and physical activity.

Also in the UK, a new report from the Soil Association and Organix shows that the big improvements in school dinners that have taken place over the past 12 months are not being reflected in children’s meals served in the UK’s leading restaurant chains. According to the new survey it’s junk food as normal on the menu with lurid names such as ‘Candymania’, ‘Malteser Munch Madness’, ‘Mini Chocolate Challenge’ and ‘Triple Treats’. The Raw Meal Deal report claims that ‘family restaurants’ are comprehensively failing to offer enough healthy food choices to children. None of the 10 big chains surveyed came close to meeting new school dinner standards, and many meals on children’s menus were high in salt, sugar and fat and offered little fresh fruit or vegetables.  The Raw Meal Deal says that “chips with almost everything, eat-as-much-as-you-like ice-cream and bottomless fizzy drinks” continues to be the theme at many top restaurant chains, with 40 million such meals being served up to children in Britain each year. In contrast, the research also identified examples of some restaurants and visitor attractions working hard to offer far healthier, fresh, unprocessed food choices.

Meanwhile, the UK's FSA will launch a series of 10-second television adverts in January telling shoppers how to follow a red, amber and green traffic light labelling system on the front of food packs, which is designed to tackle Britain's obesity epidemic.  The campaign is a direct response to a concerted attempt by leading food manufacturers and retailers, including Kellogg's and Tesco, to derail the system. The industry fears that traffic lights would demonise entire categories of foods and could seriously damage the market for those that are fatty, salty or high in sugar. The UK market for breakfast cereals is worth £1.27 billion a year and the manufacturers fear it will be severely dented if red light labels are put on packaging drawing attention to the fact that the majority are high in salt and/or sugar. The industry is planning a major marketing campaign for a competing labelling system which avoids colour-coding in favour of information about the percentage of "guideline daily amounts" of fat, salt and sugar contained in their products.   As a consumer (and parent) I'd be happy with both, and generally the more clear information and the less hype the better.  The battle for the UK's diet comes as new rules on television advertising come into force in January which will bar adverts for unhealthy foods from commercial breaks during programmes aimed at children. TV regulators are braced for a legal challenge from the industry and have described the lobbying efforts to block any new ad ban or colour-coded labelling as "the most ferocious we've ever experienced".

In the US, Bristol-Myers Squibb reached a tentative agreement to pay $ 499 million to settle a federal investigation into illegal sales and marketing activities from the late 1990s through 2005. That settlement, and separate special charges the company also announced, would wipe out Bristol-Myers fourth-quarter profit. But its shares rose on the indication that the company was resolving a big legal issue and tidying up its books, making it a more viable takeover candidate. Bristol-Myers, based in New York, declined to disclose which years, which drugs and which practices the tentative agreement covers. But Jeff Macdonald, a company spokesman, confirmed previous reports that one product involved was the antipsychotic drug Abilify, one of the company's best sellers. A settlement on the terms described by Bristol-Myers would be the latest in a string of large payments the Justice Department has extracted from drug makers. Federal prosecutors have delved into practices like failing to tell the government about price discounts offered to other major customers. As a result, Medicare and other government health plans that are entitled to the lowest available price have frequently been overcharged.  This is of course in addition to the moral hazard and consequent inappropriate administration of drugs to patients.

Two UK-based academics have devised a way to invent new medicines and get them to market at a fraction of the cost charged by big drug companies, enabling millions in poor countries to be cured of infectious diseases and potentially slashing the NHS drugs bill. Sunil Shaunak, professor of infectious diseases at Imperial College, based at Hammersmith hospital, and his colleague from the London School of Pharmacy, Steve Brocchini call their revolutionary new model "ethical pharmaceuticals". Improvements they devise to the molecular structure of an existing, expensive drug turn it technically into a new medicine which is no longer under a 20-year patent to a multinational drug company and can be made and sold cheaply. The process has the potential to undermine the monopoly of the big drug companies and bring cheaper drugs not only to poor countries but back to the UK. Professor Shaunak  and Steve Brochini have linked up with an Indian biotech company which will manufacture the first drug - for hepatitis C - if clinical trials in India, sponsored by the Indian government, are successful.  The team's work on the hepatitis C drug has impeccable establishment credentials, supported by a grant from the Wellcome Trust and help and advice from the Department for Trade and Industry and the Foreign and Commonwealth Office. Hepatitis C affects 170 million people worldwide and at least 200,000 in the UK.    Of course the professors' ethical pharmaceutical model is unlikely to find much favour with the multinational pharmaceutical companies, which already employ large teams of lawyers to defend the patents which they describe as the lifeblood of the industry.  It could become a huge intellectual property issue, but needs may demand the ethical model be scaled up quickly for global public benefit.

Environment

Every year over half-a-million people die in Asia from breathing air loaded with pollutants that are far in excess of World Health Organisation guidelines for air quality, warns the Stockholm Environmental Institute.   The premature deaths in Asia account for half of all deaths caused by air dirtied by industrial activity and vehicular emissions.. The main aerial pollutants that Asians are exposed to are sulphur dioxide, nitrogen dioxide, ozone, carbon monoxide, and particles such as soot and dust.   China and Indian feature here again.  Of special concern are China, where levels of soot or ‘black carbon' released by its industries continue to remain high, and India, which may emerge as a ‘‘hotspot for ozone pollution'' in the coming decades.   In many Asian cities the average annual levels of coarse polluting particles, of sizes of 10 micrometers diameters, are more than three times the WHO guidelines.   The particles, which scientists call PM10, are about 70 micrograms per cubic metre of air compared to WHO guidelines of lower than 20 micrograms per cubic metres. Reducing these pollutants could reduce deaths in polluted cities by as much as 15% every year, according to WHO estimates. An independent study of polluting particles in 20 key Asian cities, released by the Stockholm Environmental Institute, says air pollution still poses a threat to health and quality of life in many Asian cities. The study was released ahead of the first inter-governmental meeting of Asian countries on urban air quality. The study rates the situation in major Asian cities - Beijing, Dhaka, Hanoi, Jakarta, Kathmandu, Kolkata, New Delhi and Shanghai - as "serious", because the levels are twice the safety limits prescribed by WHO.

The EU adopted  tough new rules on the use of hazardous chemicals, passing one of the EU's most ambitious and hotly disputed legislative packages in years. The so-called REACH regulation (registration, evaluation and authorisation of chemicals) will oblige companies to register all chemicals they use and provide information about them as well as any potential hazards. It means that companies will now shoulder the burden of proving that their chemicals are safe. The current 40-year-old system has obliged public authorities to prove that such products are dangerous.   The bill, praised by consumer groups, aims to ensure that 30,000 chemicals -- in products ranging from cleaners to toys to plastics -- no longer present risks to human health or the environment.  Of the estimated 100,000 substances on the European market, only those introduced since 1981 -- a mere 3,000 or so -- have been studied for their toxic effects. The parliamentarians overwhelmingly approved the legislation on its second reading by a majority of 529 votes for and 98 against, ending more than three years of lobbying and political wrangling.  But an alliance of environmental and women's groups said the final package was only a modest step in the direction of what was needed, and still contained loopholes that the chemicals industry could jump through. Greens MEP Caroline Lucas said: "This deal is an early Christmas present for the chemicals industry, rewarding it for its intense and underhand lobbying campaign.  ... While the legislative text has been agreed, the devil will be in the detail of the implementation of these rules". Indeed the industry, led by German giant BASF, did push hard. But non-governmental organisations also lobbied in spectacular fashion, at one stage taking blood tests of parliamentarians to show the presence of toxic substances even after they had been banned.

Also in December the European Parliament gave its formal green light to an agreement reached in a last-resort conciliation with the Council in October on the groundwater-protection directive.  Measures to come into effect in 2009 will require EU countries to prevent hazardous substances from entering underground water used for human consumption.  "More than half of the freshwater bodies in the EU are polluted and can never be cleaned up again," said Christa Klass MEP (EPP-ED, Germany) who was steering the dossier in Parliament. "This is why we must protect them better".
Substances regulated include cyanide, arsenic, biocides and phytopharmaceutical substances. In a concession catalysed by agribusiness interests, Parliament agreed to take nitrate pollution from farming out of the text. The limit value of 50mg/l for nitrate pollution, laid down in the 1991 directive on nitrates, will therefore continue to apply.

German chemical company, BASF, has been given permission to plant two fields of genetically modified potatoes in the UK. Despite a public resistance to GM foods, these blight-resistant strains will be trialled to see if further plantings are possible.  BASF had sought permission to plant in Ireland, but public pressure forced the government to backtrack.  Unfortunately BASF have found another experimental patch. Defra granted permission for BASF Plant Science to grow the vegetables at field sites in Cambridgeshire and Derbyshire. The crops have been modified to include a gene from a wild species of potato in a bid to make them resistant to blight.  But the Soil Association said it was "a stupid decision" and warned other crops risked contamination by GM.  BASF aims to develop potatoes resistant to Phytophthora infestans, a fungal organism that produces late blight. Friends of the Earth GM Campaigner, Clare Oxborrow, said: "These GM trials pose a significant contamination threat to future potato crops.  We don't need GM potatoes and there is no consumer demand for them. Even the county council and the food industry have raised concerns about the impact of these trials."

The discovery of a pesticide-resistant weed that can grow up to 10 feet tall has cotton farmers in the Southern U.S. worried. A pesticide-resistant pigweed, known as Palmer amaranth, which has been confirmed in 10 North Carolina counties, four Georgia counties and is suspected in Tennessee, South Carolina and Arkansas. In Georgia, amaranth literally took over some fields and the cotton had to be cut down, rather than harvested. Scientist blame the pesticide resistance on the overuse of Monsanto's Roundup (glyphosate). A similar degradation has occurred in California, where farmers have lost farmland to herbicide resistant "horse-weed" because of longterm use of glyphosate.

A review of the US building sector concludes that the green building movement is alive and well in North America, as pioneering developers and architects have proven that sustainable buildings are financially sound and even potentially lucrative. A recent edition of Building Design and Construction (BD+C) contains an examination of progress in green building in the United States, and details the financial implications of sustainable building in a comprehensive report, Green Buildings and the Bottom Line. The report shows that green building has matured from its early days as an environmental ‘crusade' into a well established construction sector with a strong business backing. The review highlights the shift in the perception of green building from an environmentally principled approach to increasingly see the lucrative financial opportunity too. The predictions of high costs did not come true. A number of studies have confirmed that the premium is actually quite low, and that this investment can be paid back in a few short years through lower energy costs and other savings. In late 2003, The Massachusetts Technology Collaborative, a state agency which promotes renewable energy and innovation, published one such study by Greg Kats which surveyed 33 LEED buildings across the U.S. The findings showed an average premium of just 1.84%, from a low of 0.66% for LEED Certified buildings to a high of 6.5% for LEED Platinum.

Continuing the rash of bad news last month about declining fish stocks, the European Commission has called for cuts in catches of cod, herring, plaice, whiting and haddock for 2007. Announcing its annual recommendations to European ministers, the commission said there had been no significant improvement in cod stocks. Conservation groups say the commission's proposed 25% cut in cod catch would make little impact. In October, the EU's scientific advisory body recommended that no cod or anchovy should be caught next year.

A great video of whale hunting.  Check it out!

The Ecologist told us what the real cost of a BLT is last summer.  Now The Footprint of a Cheeseburger has been estimated here.  It also is sobering analysis.

Education

Although some may question whether an education is worth it, the one social factor that researchers agree is consistently linked to longer lives in every country where it has been studied is education. It is more important than race; it obliterates any effects of income. Year after year, in study after study, education “keeps coming up” says Richard Hodes, director of the National Institute on Aging.  And, health economists say, those factors that are popularly believed to be crucial — money and health insurance, for example, pale in comparison. Dr. Smith explains: “Giving people more Social Security income, or less for that matter, will not really affect people’s health. It is a good thing to do for other reasons but not for health.”  Health insurance, too, he says, “is vastly overrated in the policy debate.” Instead what may make the biggest difference is keeping young people in school. A few extra years of school is associated with extra years of life and vastly improved health decades later, in old age. It is not the only factor, of course. There is smoking, which sharply curtails life span. There is a connection between having a network of friends and family and living a long and healthy life. And there is evidence that people with more powerful jobs and, presumably, with more control over their work lives, are healthier and longer lived. But there is little dispute about the primacy of education. Life expectancy at age 35 was extended by as much as one and a half years simply by going to school for one extra year. 

Education, Dr. Smith at RAND finds, may somehow teach people to delay gratification. For example, he reported that in one large federal study of middle-aged people, those with less education were less able to think ahead.   “Most of adherence is unpleasant,” Dr. Smith says. “You have to be willing to do something that is not pleasant now and you have to stay with it and think about the future.” He deplores the dictums to live in the moment or to live for today. That advice, Dr. Smith says, is “the worst thing for your health.”  Interactive Graphic Living Longer by Staying in School

With this new incentive in mind it is disturbing to read that education in the UK is in such a poor state.  Nearly a third of British adults do not have a basic school-leaving certificate. More than a tenth have no qualifications at all. A fifth are functionally innumerate and nearly as many are functionally illiterate. And the workers of tomorrow aren't much better. One student in six leaves school unable to read, write and add up satisfactorily.

So the conclusion of the UK government sponsored Leitch Review of Skills is not surprising: Workers need to be better-educated, and so do schoolchildren.

A Languages Review by government adviser Lord Dearing recommends that studying a language become compulsory for all primary school pupils. Lord Dearing said languages should be "embedded" in the primary curriculum. It is estimated 60% of primary schools, with government encouragement, already teach languages to some extent.  But later languages may be dropped.

Meanwhile University College London, one of the UK's leading universities, has agreed in principle that a language GCSE will be compulsory for admission from 2012.  Making a language qualification a requirement for entry may help stop schools abandoning the subject.  It comes as Lord Dearing prepares to publish his review of a government strategy to make languages optional.  Until two years ago, it had been compulsory for pupils in England to study a modern language up to age 16, but now pupils can stop at 14.  Many universities have voiced concern that this has resulted in schools disbanding their language departments. GCSE results this year showed a drop in entries for modern languages - two years after they became an optional subject after the age of 14.

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