It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Saturday, November 13, 2021
CAPPLETALI$M
Apple to Pay $30 Million Over Store Workers’ Security Checks
Robert Burnson Fri, November 12, 2021 (Bloomberg) -- Apple Inc. agreed to pay $29.9 million to employees at its stores who were forced to submit to security bag checks -- off the clock -- when they left work after or during their shifts.Lawyers for the workers asked a federal judge on Friday to approve the settlement, which was reached after a protracted eight-year legal battle.Apple Store employees filed the class-action lawsuit in 2013, claiming the company was violating California law by not paying them for the time it took to check their bags.Apple claimed the bag searches were necessary to make sure workers were not hiding stolen electronic devices in their bags and argued in court that anyone who didn’t like the policy could choose not to bring bags to work.
The lawsuit only covered workers at California’s 52 Apple stores. The class includes 14,683 workers; each will get $1,286 from the settlement, the lawyers said in the court filing.In 2015, a judge granted Apple’s request to toss the lawsuit. But it was revived last year when the Ninth Circuit Court of Appeals ruled that Apple was required to pay employees for the time they spent having their bags checked.
Apple declined to comment on the settlement. The company said in the agreement that it discontinued the check policy in December 2015.The case is Frlekin v. Apple, 13-cv-03451, U.S. District Court, Northern District of California (San Francisco).
Coffee Prices Hit Highest in Seven Years on Global Supply Threats Marvin G. Perez and Archie Hunter Fri, November 12, 2021, Coffee Prices Hit Highest in Seven Years on Global Supply Threats
(Bloomberg) -- Supply woes from Brazil to Vietnam sent coffee prices to a seven-year high with poor weather, shipping snarls and soaring fertilizer costs threatening to curb supply.
Arabica futures for March delivery rose as much as 4.8% to $2.235 a pound in New York, the highest for a most-active contract since October 2014. Prices have almost doubled in the past year, raising the cost outlook for companies such as Starbucks Corp. and Peet’s Coffee & Tea Inc. that favor the high-end variety of beans.
This week’s rally comes amid falling certified stockpiles and a firmer Brazilian currency that eroded incentives to sell commodities priced in greenbacks. In addition, early projections for the country’s 2022 crop indicate yields will trail the nation’s last high-yielding cycle in 2020-21. That will limit the rebuilding of stockpiles needed to weather the typical dip in the following harvest’s output.
“The global coffee markets remain in deficit and whenever prices drop we see industry buying ahead of further tightening,” said Kona Haque, who leads research at commodity trader ED&F Man in London.
Technical chart signals suggest that if prices breach $2.25 arabica could surge to the $3 level, said Hernando de la Roche, senior vice president for StoneX Financial Inc. in Miami. There’s been buying tied to expiring options, which spurred short covering, he said.
The surge in futures threatens even higher prices at cafes and grocery stores as food inflation becomes more acute. U.S. consumer prices rose at the biggest annualized rate in 30 years last month, according to government data.
Brazil’s 2021 output plunged after drought and frost damaged trees, and rains will remain crucial for any 2022 recovery. Second-ranked arabica supplier Colombia is struggling with excessive rains that cut yields and heightens the risk of plant disease. The two countries account for almost three-quarters of world arabica output.
Soaring fertilizer prices are adding to farmers woes while elevated freight costs and a lack of container ships hinder exports. That has stalled shipments of millions of bags of coffee out of Brazil. Vietnam, the top robusta supplier also has seen freight rate climb even higher.
That’s pushed buyers to seek alternatives and Africa has made up for some of that.
Meanwhile, fertilizer costs are rising in Brazil amid global export restrictions and robust demand, according to Bloomberg Intelligence. Countries where currencies have depreciated against the dollar are feeling the impact even more, including Costa Rica, long a favorite of American coffee connoisseurs.
Prices are likely to stay high as elevated shipping costs eat into profits for producers, exporters, importers, roasters and retailers, said Christian Wolthers, the president of Wolthers Douque, a Florida importer whose family has been in the Brazilian coffee business for decades.
In London, robusta coffee rose for a second session, lifting the 12-month advance to 63%. That variety is used widely for instant beverages such as Nestle’s Nescafe.
(Updates with shipping situation, possible upside target)
Most Read from Bloomberg Businessweek
CRIMINAL CAPITALI$M Factbox-J&J's legal strategy for Baby Powder, talc liability
Fri, November 12, 2021 By Mike Spector
NEW YORK (Reuters) - Johnson & Johnson on Friday said it would split into two companies, hiving off its consumer health division that sells Band-Aids and Baby Powder from its pharmaceuticals and medical devices business.
The historic breakup comes as J&J faces nearly 40,000 lawsuits alleging its Baby Powder and other talc products contained asbestos and caused cancer, which the company denies. The plaintiffs include women suffering from ovarian cancer and others battling mesothelioma.
Chief Executive Alex Gorsky told The Wall Street Journal that the talc litigation did not play a role in the decision to break up J&J. The company is aiming to complete the separation in 18 to 24 months.
In October, J&J undertook a separate corporate reshuffling aimed squarely at tackling its talc liabilities. Here is what J&J did: TEXAS TWO-STEP
Using Texas’s divisional merger law, the company's Johnson and Johnson Consumer Inc business split in two, offloading talc liabilities into a newly created subsidiary. The subsidiary, called LTL Management LLC, then moved to North Carolina.
Within days of those moves, LTL filed for bankruptcy protection in Charlotte. In legal circles, the series of transactions is known as a “Texas two-step.”
J&J has offered to contribute $2 billion toward resolving remaining talc litigation as part of the newly created subsidiary’s bankruptcy reorganization. CONTROVERSIAL LEGAL MOVE
Earlier this week, a North Carolina bankruptcy judge overseeing the proceedings transferred the case to New Jersey, where J&J is headquartered. He also halted talc litigation against J&J for 60 days, extending to the healthcare conglomerate a legal shield already provided to LTL, the entity under bankruptcy protection.
Plaintiffs’ lawyers have decried J&J’s latest move to grapple with talc liabilities, accusing the financially healthy company of manipulating the bankruptcy system without filing for Chapter 11 protection itself.
In Washington, Congressional Democrats have introduced legislation that would ban the use of divisional mergers to offload liabilities as J&J did, and also limit the ability of companies that have not filed for bankruptcy from obtaining legal protections extended to those under Chapter 11 court protection.
J&J, a blue-chip company with a market value exceeding $400 billion, has spent close to $1 billion defending against the talc litigation. Settlements and verdicts have cost the New Brunswick, New Jersey-based company about $3.5 billion more, although it has prevailed in some cases. REUTERS INVESTIGATION
A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. The company stopped selling Baby Powder in the U.S. and Canada in May 2020, in part due to what it called “misinformation” and “unfounded allegations” about the talc-based product. J&J maintains its consumer talc products are safe and confirmed through thousands of tests to be asbestos-free.
In June, the U.S. Supreme Court declined to hear J&J’s appeal of a Missouri court ruling that resulted in $2 billion of damages awarded to women alleging the company’s talc caused their ovarian cancer.
(Reporting by Mike Spector; additional reporting by Maria Chutchian; editing by Edward Tobin)
Toshiba plans to split into three after wave of scandals
Thu, November 11, 2021 By Makiko Yamazaki and Scott Murdoch
TOKYO (Reuters) - Toshiba Corp outlined plans on Friday to split into three companies in an attempt to appease activist shareholders calling for a radical overhaul of the Japanese conglomerate after years of scandals.
A rare move in a country dominated by conglomerates, Toshiba's breakup comes the same week U.S. industrial powerhouse General Electric called time on its sprawling empire and Johnson & Johnson announced it was splitting up too.
Founded in 1875, Toshiba plans to house its energy and infrastructure divisions in one company while its hard disk drives and power semiconductor businesses will form the backbone of another. A third will manage Toshiba's stake in flash-memory chip company Kioxia Holdings and other assets.
The plan, borne of a five-month strategic review undertaken after a highly damaging corporate governance scandal, is partly designed to encourage activist shareholders to sell their stakes, sources with knowledge of the matter have said.
A breakup, however, runs counter to calls by activist investors for Toshiba to be taken private and some major shareholders said the plan may struggle to get through an extraordinary general meeting due to be held by March.
The overhaul was announced after markets in Japan had closed but the company's Frankfurt-listed shares fell 4% at the open on Friday highlighting investor disappointment. The shares later recovered slightly in very low volume.
Toshiba's strategic review committee said the idea of going private had raised concerns internally about the impact on its businesses and staff retention while offers from private equity firms were not compelling relative to market expectations.
Private equity firms had also conveyed concerns about completing a deal due to possible conflicts with Japan's national security law and potential opposition from antitrust regulators, the company said.
"After much discussion, we reached the conclusion that this strategic reorganisation was the best option," Chief Executive Satoshi Tsunakawa told a news conference.
CRISIS TO CRISIS
He said Toshiba, which hopes to complete the overhaul in two years, would have chosen to split up regardless of the presence of activist shareholders and that Japan's powerful trade ministry had not voiced objections to the plan.
One major Toshiba shareholder said other investors might still consider nominating a new board director to push though an auction process.
"The option to take Toshiba private can create more value in a shorter period of time than the break-up," the shareholder said.
A portfolio manager at an activist fund with Toshiba shares said the plan was disappointing and unlikely to be voted through at the extraordinary general meeting the company plans to hold by March.
"The activists have two options now: you can sell and go away and come back in two years time or you can buy more shares and fight this thing at the EGM. I'm going to go and think about what to do," said the manager, who declined to be identified.
The 146-year-old conglomerate has lurched from crisis to crisis since an accounting scandal in 2015.
Two years later, it secured a $5.4 billion cash injection from more than 30 overseas investors that helped avoid a delisting but brought in activist shareholders including Elliott Management, Third Point and Farallon.
Tension between management and overseas shareholders has dominated headlines since then. In June, an explosive shareholder-commissioned investigation concluded that Toshiba had colluded with Japan's trade ministry to block investors from gaining influence at last year's shareholders meeting.
'EXCESSIVE CAUTIOUSNESS'
Earlier on Friday, Toshiba released a separately commissioned report that found executives, including its former chief executive, had behaved unethically but not illegally.
It said Toshiba was overly dependent on the trade ministry and problems had also been caused by its "excessive cautiousness" towards foreign funds and an unwillingness to develop a sound relationship with them.
Under the overhaul, Toshiba aims to return 100 billion yen ($875 million) to shareholders in the next two financial years.
It also said it intended to "monetize" its Kioxia shares and return the net proceeds in full to shareholders as soon as practicable, a change from a previous plan to return only a majority of the proceeds.
Other assets that will continue to be held by Toshiba include its stake in Toshiba Tec Corp, which makes printing and retail information systems.
Toshiba plans to complete the overhaul by March 2024.
A trade ministry official said the government would be interested in how the breakup affects Toshiba's businesses related to national security, which include radar systems.
Toshiba also reported on Friday that its second-quarter operating profit roughly doubled to 30.4 billion yen ($267 million) as it recovered from a slump triggered by the coronavirus pandemic.
"It makes sense to split if the valuation of a highly competitive business is hindered by other businesses," said Fumio Matsumoto, chief strategist at Okasan Securities.
"But if there isn't such a business, the breakup just creates three lacklustre midsize companies."
($1 = 113.9700 yen)
(Reporting by Makiko Yamazaki; Additional reporting by Scott Murdoch in Hong Kong and Ritsuko Shimizu in Tokyo; Editing by Edwina Gibbs and David Clarke)
Biden bill includes boost for union-made electric vehicles
FILE - A Tesla charges at a station in Topeka, Kan., April 5, 2021. President Joe Biden and Democrats in Congress are looking to give U.S. automakers with union employees the inside track when it comes to winning the burgeoning electric vehicle market. The $1.85 trillion spending package that Democrats are trying to get through Congress includes an array of programs designed to curb global warming, including incentives to hasten the transition to electric vehicles, now about 2% of new car sales in the U.S. A provision that would give buyers of vehicles made at unionized manufacturing plants in the U.S. a more generous tax credit is sparking an international and regional political squabble.
AP Photo/Orlin Wagner, Fil KEVIN FREKING Thu, November 11, 2021
WASHINGTON (AP) — President Joe Biden and Democrats in Congress are looking to give U.S. automakers with union employees the inside track on the burgeoning electric vehicle market, triggering vocal opposition from foreign trade partners and Republicans who worry that manufacturers in their home states will be placed at a competitive disadvantage.
The $1.85 trillion spending package that Democrats are laboring to pass through Congress includes an array of programs designed to curb global warming and slash U.S. emissions. It includes incentives to hasten the transition to electric vehicles, which represent a small but rapidly growing share of the market.
If enacted, the bill would provide a $7,500 tax credit for consumers who buy electric vehicles through 2026. Beginning the following year, only purchases of electric vehicles made in the U.S. qualify for the credit. The base credit goes up by $4,500 if the vehicle is made at a U.S. plant that operates under a union-negotiated collective bargaining agreement. Only auto plants owned by General Motors Co., Ford Motor Co. and Stellantis NV qualify.
“I want those jobs here in Michigan, not halfway around the globe," Biden said when visiting a UAW job training center last month.
The union friendly add-on is raising hackles internationally and inside the U.S., testing the Democratic Party's commitment to a labor-friendly approach that Biden has made central to his political brand. The provision could boost the sale of electric vehicles while disadvantaging foreign automakers with U.S. plants that employ tens of thousands of manufacturing workers, particularly in Southern states where laws have made it hard to unionize.
Democrats are undaunted. They say supporting union jobs is good for the economy and the country.
“I’m a student of America’s economic history and labor unions have consistently helped build out the middle class,” said Rep. Dan Kildee, D-Mich. “We should have a policy that’s consistent with our values. Our values are that communities are stronger, the economy is stronger when workers have wages, benefits and protections that not only apply to them, but set the highest standard for all other employees.”
But one key Democrat, Sen. Joe Manchin of West Virginia, spoke against the provision when visiting a Toyota plant in his home state Thursday. Automotive News quoted Manchin as saying that in a capitalistic economy, “you let the product speak for itself, and hopefully, we’ll get that, that’ll be corrected.”
In the evenly divided Senate, Manchin's opposition could well prove fatal to the union-friendly tax credit.
Ambassadors from the European Union, Canada and South Korea are among those who recently wrote to congressional leaders saying the credit is inconsistent with U.S. trade commitments and “tarnishes the spirit of trade laws that seek to establish the free and fair movement of goods."
Eleven governors complained that the more generous tax credit for cars made in union plants would punish companies and workers in their states. Republican lawmakers portray it as payback for a major Democratic benefactor, the United Auto Workers, which spent about $1.25 million in support of federal candidates in the 2020 elections, more than 99% for Democratic candidates, according to OpenSecrets, which tracks campaign money.
Republican Sen. John Cornyn of Texas said he didn't expect a more generous tax credit for union-made cars to be decisive for car buyers, but said it will be a factor.
“There’s nothing about a union-made electric vehicle that makes it greener than a nonunion vehicle, so it just seems pretty obvious it’s funneling money to supporters. I think it’s shameful,” said Cornyn, whose state was selected by Tesla for a manufacturing plant as well as for its new corporate headquarters.
“It’s a terrible idea,” said Sen. Roger Wicker, R-Miss, whose state is home to Nissan and Toyota plants. “It just strikes me as a blatant gift to a political friend. I don’t see any other way to look at it. It’s an obvious payoff.”
All but the richest Americans would qualify for the tax credit, which would apply to vans, SUVs and pickups costing less than $80,000 and cars costing less than $55,000.
UAW President Ray Curry said in a statement supporting the bill that it would support “good paying union jobs and stands to benefit our country for decades to come.”
“In addition, this framework encourages nonunion manufacturers to let their workers freely organize,” Curry said.
Labor unions have seen their power recede in recent decades, largely due to declining membership. Kildee's congressional district includes the city of Flint, where a sit-down strike by General Motors workers in 1936-1937 brought about one of the biggest victories for labor unions in America's history. Within a year, UAW membership grew from 30,000 to 500,000 and wages for autoworkers increased by as much as 300%.
“It transformed the community, and we think everybody should have that opportunity," Kildee said.
Foreign carmakers have been steadily expanding their U.S. manufacturing footprint in states such as Alabama, South Carolina, Tennessee, Mississippi and Texas — states where workers cannot be compelled to become members of a union as a requirement of their job. Efforts to unionize plants in Mississippi and Tennessee have fallen short multiple times.
“Let's keep in mind that the American autoworkers that my members employ have chosen not to unionize," said Jennifer Safavian, president and CEO of the trade group, Autos Drive America, whose members include a dozen foreign automakers. “They have made that choice for themselves, and that should be respected."
The combined $12,000 credit for cars made in U.S. plants with union workers would cut the starting price of a Chevrolet Bolt small electric hatchback from about $32,000 to around $20,000. That’s well below the average price of a new vehicle, now over $42,000. The car also qualifies for additional $500 credit that is available for batteries made in the U.S.
“It plays into the mix, of course, because it makes it more affordable and more accessible to people,” IHS Markit auto analyst Stephanie Brinley said of the tax credits.
Just how much of a sales bump the credit will produce is difficult to predict. A global shortage of the computer chips needed to manufacture vehicles, for example, is expected to persist well into 2022, Brinley said.
“Semiconductors will keep inventory constrained for a while,” Brinley said. “It’s harder to have an immediate impact on that with incentives.”
What’s likely to have a bigger impact on sales is the sheer number of fully electric models rolling off production lines, many in the most popular segments of the U.S. market. Those include compact SUVs and full-size pickup trucks, two of the most popular vehicle types. There are about 35 fully electric models today, but that will jump to around 150 by 2025, Brinley said.
Electric vehicle sales are now 2% of U.S. new vehicles sales, but IHS Markit, a research and analytics company, expects the share to grow to 32% by 2030.
____ AP Auto Writer Tom Krisher in Detroit contributed to this report.
CRIMINAL CAPITALI$M
The supply chain crisis' latest woe: Cargo theft that may last as long as the backlogs do Dani Romero Sat, November 13, 2021
The worsening supply chain crisis are making stolen shipments an increasingly common problem that's affecting shoppers, already facing long delays and soaring prices. Cargo that finally makes its way out of backlogged ports on the West Coast is being aggressively targeted by criminals eyeing containers filled with electronics amid the chip shortage.
Meanwhile, on the East Coast, refrigerated trucks used to transport food have been a favorite target of thieves, according to reports.
“The old saying is freighted rest is traded risk,” said Keith Lewis, Vice President of CargoNet, which tracks thefts along the supply chain for companies, told Yahoo Finance Live on Friday.
“With the log jam at the port[s] and getting the containers out of there, getting them to stack yards, carrier yards, etc. the freight is sitting,” Lewis added.
Thieves made off with greater than $5 million value of products as a result of so-called supply-chain theft in California in the third quarter of 2021, according to CargoNet’s data.
Like the ports in Long Beach and Los Angeles, the Port of Savannah has grappled with a sustained rise in import volume in recent months.
One of the biggest issues is the lack of space to process containers, as clogged container yards prevent ships from unloading efficiently, leaving thieves the opportunity to do damage in those areas.
"There's container yards down there that bring in refrigerated containers from South America and those are being targeted," Lewis added.
'Optimal domain awareness'
Container ships wait off the coast of the congested ports of Los Angeles and Long Beach, in Long Beach, California, U.S., September 29, 2021. REUTERS/Mike Blake
California topped the list of states most targeted by thieves, CargoNet data showed — followed by Texas and Florida. As much as $45 million in cargo thefts have been reported from January to September. In 2020, cargo thefts reached $68 million and in 2019 they hit $49 million, according to the analysis, with the pace of theft is expected to continue through 2022.
"We see this as going to continue for awhile," said Lewis. "Electronics, gaming, those types of things, peripheral devices for computers are going to be the trend for the future."
Recently, NBC 4 News Los Angeles reported that there are thousands of boxes strewn along the railroad tracks. They appeared to have fallen, or been thrown from cargo containers hauled by Union Pacific trains, according to the report.
Union Pacific (UNP) transports goods from the Los Angeles County Ports, where the massive backlog of cargo continues. "We are aware of the problem, and we are working with local law enforcement in Los Angeles to address the issue and stop the thefts," A spokesperson from the train operator told Yahoo Finance in an email.
For months, the Port of Long Beach has been ground zero for backlogged shipments unable to reach their final destination. "Electronic surveillance is carried out on land, on the water and below the water with a variety of cameras, radar, sonar and various threat assessment technologies," a port spokesperson told Yahoo Finance in a statement.
"In addition, the Port is continually upgrading and adapting its approach to security to ensure optimal domain awareness," the spokesperson added.
Although most of the nation’s major ports have seen their container volumes skyrocket during the past year, the most damage from thieves isn't actually ports or rail yards, CargoNet's Lewis explained.
"We're seeing is an uptick in pilferage is people stealing something just off the back of the truck, or somewhere in the middle of the truck," said Lewis.
Yet it's a challenge to track theft because shippers simply don't know where thieves could strike, especially when freight is sitting around idle.
"It's much more difficult to predict exactly what load they may target, which loads they're going to hit, what area they're going to work in that day or that weekend," Scott Cornell, a crime and theft specialist at insurance giant Travelers (TRV), told Yahoo Finance on Friday.
And the rising levels of theft for fleets and businesses mean that ultimately, it's consumers that will feel the impact this holiday season. Already, widespread shortages and rising prices are making the Thanksgiving to Christmas rush harder than usual.
"Anytime that you have a theft or you take away some of the inventory that's going to be out there, you're going to have a shortage on different items," Cornell said.
"There's going to be less to choose from. Fewer things on the shelves or fewer choices to make when you go out to shop this year," he added.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
Chrissy Suttles, Beaver County Times Fri, November 12, 2021, The Shell Chemicals ethane cracker plant shown under construction Aug. 20, 2020, in Potter Township.
SHELL SCOTFORD ALBERTA IS A SHELL ETHANE CRACKER PLANT
POTTER TWP. — Shell Polymers will partner with a chemical recycling company to pave roads at its petrochemical site with asphalt enhanced with recycled plastic additive.
Shell on Thursday announced plans to pave nearly six miles of site roads and 47,000 square yards of parking lots with the mix at its Beaver County site, which will begin turning natural gas into plastic pellets next year.
Company representatives said the project will “utilize the equivalent of 3 million plastic grocery bags, reducing waste in landfills.”
The partnership with Canada-based GreenMantra Technologies began in March 2020, when crews at the future Potter Township facility laid a test strip with the modified asphalt next to traditional asphalt and monitored it for a year. The test strip’s performance, compared to its partner, prompted leadership to use it more broadly throughout the project.
GreenMantra converts waste plastics such as grocery bags and film into specialty chemicals for use in roofing, paving and other industries. The technology aims to reduce energy use and carbon emissions during asphalt production and installation.
Hilary Mercer, Shell Polymers senior vice president, called the move a “win-win” for the environment and the cracker plant project “by using materials that would otherwise have been plastic waste.”
The company is now working to identify other possible uses for the technology across its other projects.
“We believe there are tremendous opportunities for combining asphalt and polymers to reduce both (carbon) emissions and plastic waste,” Mercer said.” "Governments, industry and the private sector can deploy this technology and deliver environmental benefits that were once unthinkable.”
The pension fund of one of the largest energy companies in the world cut its investments in a Chinese online giant, and the U.S. pharmaceutical sector.
Shell Asset Management, which handles Royal Dutch Shell‘s pensions, exited Alibaba Group Holding (ticker: BABA), and slashed positions in Pfizer (PFE), Johnson & Johnson (JNJ), and Merck (MRK) in the third quarter. SAMco, as the subsidiary is known, disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.
Outline of carbon markets deal emerges at U.N. climate summit
Jake Spring and Kate Abnett Sat, November 13, 2021
Nov 13 (Reuters) - Negotiators began to close in on a deal to settle rules for carbon markets on Saturday, as talks extended into overtime at the COP26 U.N. climate summit.
New draft documents released early Saturday on implementing Article 6 of the 2015 Paris Agreement https://www.reuters.com/business/cop/toughest-tasks-un-climate-talks-article-6-co2-markets-2021-10-26 suggest progress around all three of the key sticking points that have skuppered a deal on the issue at the past two U.N. climate conferences.
Article 6 would set the rules allowing countries to partially meet their climate targets by buying offset credits representing emissions cuts by others.
Companies as well as countries with vast forest cover are keen for a robust deal on government-led carbon markets in Glasgow, in hopes also of legitimising the fast-growing global voluntary offset markets.
But balancing those interests against worries that offsetting will go too far in allowing countries to continue emitting climate-warming gases has made some wary of a hasty deal.
TAXING TRADES
On the issue of whether certain carbon trades should be taxed to fund climate adaptation in poorer nations https://www.reuters.com/business/cop/that-sinking-feeling-poor-nations-struggle-with-un-climate-fund-2021-11-11, the latest proposals offer a two-track approach.
Bilateral trades of offsets between countries would not face the tax. That suggests capitulation to rich nations including the United States, which had objected to poor countries' demands for the levy.
In a separate centralised system for issuing offsets, 5% of proceeds from offsets will be collected to go toward an adaptation fund for developing countries.
Also in that system, 2% of the offset credits will be cancelled. That aims to increase overall emissions cuts by stopping other countries using those credits as offsets to reach their climate targets.
OLD CREDITS
Another stubborn roadblock had been whether carbon credits created under the old Kyoto Protocol, the Paris Agreement's predecessor, should be included in the new offset market system.
Negotiators had been wrangling over a compromise that would set a cut-off date, with credits issued before that date not being carried forward.
The latest text would carry over any offsets registered since 2013. That would allow 320 million offsets, each representing a tonne of CO2, to enter the new market, according to an analysis by the NewClimate Institute and Oko-Institut non-profits.
Campaigners had warned against flooding the new market with old credits, and have raised doubts about the climate benefits of some.
The latest compromise got a mixed response.
The 2013 date "is not good. So now it will be buyer countries' jobs to just say 'no' to them," said carbon markets expert Brad Schallert with non-profit World Wildlife Fund.
Some countries said it was unfair that old credits would be allowed in the new market, while they feared credits awarded under a forest scheme known as REDD+ were not explicitly included.
"Panama will not accept the proposed text in Article 6 as it currently stands," Juan Carlos Monterrey Gomez, lead negotiator for Panama, said. "Forests must be part of this deal. If not, no way, no how, no deal."
A negotiator from another country told Reuters that in their view, the draft proposal could include such forest credits. "DOUBLE COUNTING"
One of the most contentious points had been on the question of whether credits could be claimed by both the country selling them, and the country buying.
A proposal by Japan may have resolved the issue, and appears to have backing from both Brazil and the United States. Brazil's past insistence on allowing double counting had torpedoed an Article 6 deal in the past.
Under the new proposal, the country that generates a credit would decide whether to authorise it for sale to other nations to count towards their climate targets.
If authorised and sold, the seller country would add an emission unit to its national tally and the buyer country would deduct one, to ensure the emissions cut was counted only once between countries.
The same rules would apply to credits used more broadly toward "other international mitigation purposes" - wording that some experts said could include a global scheme for offsetting aviation emissions, ensuring double counting doesn't happen there too.
"It's a strong text on double counting," said Kelley Kizzier, a vice president at the Environmental Defense Fund, who has chaired the Article 6 talks at past U.N. summits. "It does what it needs to do."
(Reporting by Jake Spring and Kate Abnett; Additional reporting by Valerie Volcovici; Editing by Katy Daigle and Jan Harvey)
Kerry, Xie Huddle as Glasgow Deal-Making Goes Live: COP26 Update
Jennifer A. Dlouhy, Ewa Krukowska and Akshat Rathi Sat, November 13, 2021
Kerry, Xie Huddle as Glasgow Deal-Making Goes Live: COP26 Update
(Bloomberg) -- COP26 talks are now in the final stretch, with negotiators haggling over money, coal, and carbon-trading. Two proposals that have faced resistance -- calling for a shift away from fossil fuels and for countries to upgrade their climate plans -- survived another night of talks. The main issue now is how the rich world will help poor countries withstand the worst effects of climate change. Vulnerable island nations are enraged by the lack of new funds.
But negotiators are moving closer to a deal on global emissions trading that could speed reductions of greenhouse gases. While environmentalists say it still needs to be strengthened against the risk of greenwash, the latest draft offers a compromise.
As talks run well into overtime, some top officials from smaller countries are already heading home. Covid rules on tests, flights, and quarantine are adding extra logistical hurdles right to the end.
Key developments:
Latest draft on carbon-trading shows signs of progress
COP set to call for phase-out of unabated coal and “inefficient” fossil-fuel subsidies
Countries told to strengthen climate plans next year
Maldives says it’s not good enough
EU, Italy are hatching a plan to solve the finance gap
Activists warn that carbon-trading deal could lead to greenwash...
... and Extinction Rebellion labels COP26 a failure
Delegates got through 11,000 liters of disinfectant
Read more: What to Look Out for If You’re Just Tuning In
(Timestamps are Glasgow, Scotland.)
Time for Objections (3:12 p.m.)
After much huddling and pouring over texts, COP26 President Alok Sharma has finally got everyone seated. Now listen out for objections as countries take turns to have the floor.
Sharma has made clear he wants to wrap up “this afternoon.” It’ll soon be clear what kind of deal has emerged from two long weeks of talks.
Extinction Rebellion Labels COP26 a Failure (2:55 p.m.)
Extinction Rebellion activists disrupted the City of London Lord Mayor’s event as they declared COP26 a failure. They displayed a float with a giant drowning head and two outstretched arms, and with banners saying “COP has failed” and “Stop Fossil Fuel Funding,” the group said in a statement.
U.S.-China Huddle (2:41 p.m.)
U.S. and Chinese negotiating teams are huddling as they try to get a deal over the line. Sharma had called people back for 2:30 p.m. But it looks like they still have some chunks of text to discuss. U.S. climate envoy John Kerry, masked and wearing reading glasses, is parsing the texts with his Chinese counterpart Xie Zhenhua.
There’s been a fair amount of backslapping too, particularly between the Brits and Americans.
Plan Is to Close Summit Today (2:01 p.m.)
COP26 President Alok Sharma insisted he plans to close the summit this afternoon, as he gave delegates more time for informal talks to try to get a deal over the line.
A plenary session was delayed as delegates huddled in small groups for last-minute horse-trading. Sharma has called everyone back for 2:30 p.m.
“At the end of the day what has been put forward here is a balanced package,” he said. “Everyone’s had a chance to have their say.”
Financing Still a Challenge (1:08 p.m.)
Climate financing continues to be the biggest challenge, said Brazil’s Environment Minister Jaoquim Leite. Rich nations have not only missed their target of $100 billion a year of annual funding for poor countries to tackle climate change, but some say that money is just not enough. The financing has been a key sticking point, and major complaint from vulnerable nations.
“They signed in 2015, promised for 2020 and now are kicking the can down the road to 2023 or 2024, for resources that are no longer enough,” Leite said.
He added that an agreement on carbon trading is likely on Saturday, after nations have finally agreed on a compromise to avoid double-counting carbon credits.
“The global carbon market is one of the solutions but not the biggest,” he said. “The main solution is more resources, funding above $100 billion.”
How Good is the Carbon-Trading Deal? (12:45 p.m.)
As negotiators close in a deal on a global carbon market, activists and experts are pouring over the detail.
The new proposal has been praised by some activists for offering stronger provisions on accounting -- a key issue. Another important element of the draft is also an obligation to cancel 2% of newly issued credits -- a step that would ensure pollution is cut, rather than just offset elsewhere.
Kelley Kizzier, vice president for global climate at the Environmental Defense Fund and a former negotiator, called the new draft text a good deal.
“It gives us a robust accounting framework, especially for compliance markets,” she said in an interview. “I think it also provides the opportunity for avoiding double counting for voluntary markets for the first time. But that will definitely be the job for civil society and national governments to make sure that that’s implemented.”
Yet some activists voiced concerns over the treatment of old carbon credits generated under the now-defunct Kyoto Protocol-era offset market. Up to 4 gigatons of old units could be carried over -- more than the annual emissions of Russia and Indonesia combined, according to WRI’s Helen Mountford.
“This is a concern, and we need to ensure that this is as limited as possible” lest it undermine ambition,” she said.
Maldives Laments Lack of Progress (12:50 p.m.)
With just minutes to go before countries take to the floor to take stock, the Maldives have signaled their unhappiness with the amount of adaptation finance provided for in the draft text, setting the stage for a potential showdown.
“We know through the trillions that are invested in fossil fuels every year that money is not the question -- the question again is one of political will,” said Shauna Aminath, environment minister for the chain of 26 atolls in the Indian Ocean, which are threatened by rising sea levels.
“We have 98 months to halve our emissions. We are not there. The difference between 1.5 and 2 degrees is a death sentence for us.”
Saudi Arabia Doesn’t Reject Fossil-Fuel Line (11:50 a.m.)
Saudi Arabia doesn’t object to the line in the text that calls for a phase-out of “unabated coal power” and “inefficient” fossil-fuel subsidies, according to a person familiar with the country’s position.
The coal line would be a big win for the summit as it would make the first time a final COP text references the need to move away from the dirtiest fossil fuel. Still, the fossil-fuel language matches what the G-20 has been saying for years, even as members continued to pump billions of dollars into subsidies.
Greenpeace Celebrates Fossil-Fuel Language (11:30 a.m.)
“The key line about fossil fuels is still in the text,” says Greenpeace International Executive Director Jennifer Morgan
“It’s weak and compromised, but it’s a breakthrough, it’s a bridgehead and we have to fight like hell to keep it in there and have it strengthened.”
The Risk of Compromise (9:43 a.m.)
The draft compromise proposal on a UN-supervised carbon market is a good start but still needs stronger provisions on the use of credits from a previous program, according to Gilles Dufrasne of Carbon Market Watch. Under the new documents, offsets from projects registered under the Clean Development Mechanism in 2013 or later could be transfered to the new market.
The controversial, technical issue of provisions to avoid double counting also needs more analysis, according to Dufrasne. “It looks like the risk has been reduced but the devil is in the detail and we will need to see how this can be implemented in practice.”
New Ad Hoc Finance Group (9:30 a.m.)
Climate finance has been one of the thorniest issues at COP26, and newly released drafts are unlikely to mollify poor nations angered by wealthy countries’ failure to fulfill a pledge for $100 billion annually that was supposed to start flowing by 2020.
Under draft documents released Saturday, an ad hoc group would work to develop a new climate finance plan for the second half of the decade with the new collective funding goal established in 2024.
But negotiators have dialed back any commitment on what that plan would actually look like -- including by omitting proposed language to set the floor at $100 billion annually and mobilize at least $1.3 trillion per year by 2030.
Coal and Fossil Fuel Phase-Out (9:05 a.m.)
COP26 is set to call for a phase-out of “unabated” coal and “inefficient” fossil-fuel subsidies, according to the latest draft. It will likely be considered a win after the line faced fierce resistance from some countries. If it survives until the end, it will be the first time a final COP text references fossil fuels.
Still, the G-20 has been calling for an end for inefficient fossil-fuel subsidies for a decade, and the latest numbers show those countries spent $600 billion subsidizing fossil fuels.
“It’s a major shift if it survives since it’s been so verboten,” said Collin Rees, a senior campaigner at the environmental group Oil Change U.S. Even if the language won’t “deliver much tangible change by itself,” he said, the real value is in signaling the shift away from fossil fuels and setting a precedent to build on.
Paying for Climate Damage (9:15 a.m.)
Negotiators have moved closer to a plan for compensating climate-vulnerable countries for the damage caused by global warming. A new draft has countries committing for the first time to provide funds to a program that was set up years ago but still doesn’t really work.
Under the latest draft text, the so-called Santiago network “will be provided with funds to support” efforts to avert, minimize and address loss and damage associated with climate change.
It still falls short of the demands from climate-vulnerable countries.
Gaps Are Closing on Carbon Trading (8:45 a.m.)
Envoys moved closer to a deal on launching a global carbon market market, according to a new draft.
The document outlines solutions to some of the biggest sticking points, including the accounting rules. Here, negotiators backed provisions endorsed by Brazil, Japan and the U.S., which environmental activists say creates the risk of lax accounting -- or greenwashing.
Negotiators kept a rule that 5% of revenues from offset trading under the new UN-supervised program would have to be channeled to developing countries to help them adapt to climate change. And to ensure that the market accelerates pollution cuts, 2% of newly issued offsets would have to be canceled.
There’s also a draft compromise on the use of old Kyoto Protocol-era offsets. The unused so-called Certified Emission Reductions would only be authorized for use to meet nations’ first climate plans under the Paris Agreement. To qualify, the offsets would have to come from projects registered no earlier than 2013.
New Steps on Carbon Trading (8:10 a.m.)
Negotiators are making progress on creating rules for international carbon markets. A new draft proposal published on Saturday moves ahead on the thorny issue of how to use cash generated from bilateral emission trades.
Instead of channeling a fixed share of revenues to developing countries, a demand voiced by African nations and other developing countries, now they are “strongly encouraged to commit” to contributing funding for adaptation, particularly through the Adaptation Fund.
EU, Italy Seek Band-aid on Finance (9 p.m.)
The European Union and Italy are rushing to draft a last-minute climate finance proposal that would help rich countries make good on failed funding promises -- and perhaps rescue COP26 negotiations.
(Michael Bloomberg, the founder and majority owner of Bloomberg LP — the parent company of Bloomberg News — committed $500 million to Beyond Carbon, a campaign aimed at closing the remaining coal-fired power plants in the U.S. by 2030 and halting the development of new natural gas-fired plants. He also started a campaign to close a quarter of the world’s remaining coal plants and cancel all proposed coal plants by 2025.)
What Can Indigenous Peoples Teach the World About Resilience in the Face of Climate Despair?
Chris Feliciano Arnold Thu, November 11, 2021 Photo credit: OLI SCARFF - Getty Images
Fiona Watson, advocacy director for Survival International, has worked for more than 35 years to help Indigenous peoples across the world defend their lives and territories from land theft, forced development, and genocidal violence. As the 2021 United Nations Climate Change Conference draws to a close, and in the wake of this year's UN report on climate change signaling a “code red for humanity, ” I spoke with Watson about what she has learned from decades of campaigning against seemingly impossible odds—and the importance of not losing hope.
When we first met in 2017, I was feeling despondent after years of reporting on environmental injustice in the Amazon rainforest, and you somehow convinced me that not all is lost. Given the environmental catastrophes we’ve seen in the last four years, are you still feeling hopeful?
All is not lost until all is lost. That’s not to underestimate the gravity of the situation. It’s a very bleak scenario, no doubt about that. But one of the things that really encourages me, still, is the phenomenal growth in the Indigenous movement in many countries. It’s thanks to them that we still have forests standing in places like Maranhão [Brazil], which has been so devastated in the last 50 years.
We know Indigenous people are the best defenders of their land, but they need us to stand by them. They need our moral support. They need our financial support. When we’re talking about the climate crisis, we’re also talking about a crisis of human diversity. Why is that human diversity so vital?
Indigenous and tribal peoples show us other ways of being and thinking, different ways of thinking about life, about the planet, about the resources and how we use them. Whether through their technologies or science, or their expert botanists or herbalists or zoologists, they understand these very profound connections between human beings and nature, and how these things interconnect. And they are self-sufficient peoples. They can show us how to live within our means.
They are also warning voices. Long before Western people had woken up to climate change, I traveled for many years with the Yanomami shaman Davi Kopenawa when he left Brazil for the first time. His prophetic voice was telling us this years ago: “We’re all in the same boat. You don’t know it yet, but we know it already. You’re going to burn. You’re going to suffer unless the materialism and the consumption of industrialized society changes.”
What they have to show us is this extraordinary knowledge, but also this tenacity to stand up in the face of massive violence and greed, and challenging this perception that we can carry on consuming.
When you reflect on a 20-year campaign like that effort to demarcate the Yanomami Indigenous Territory in Brazil—the largest area of protected rainforest in the world—what have you learned about balancing a sense of urgency with the stamina necessary to make lasting change?
We need both. The public may feel despair and helpless in situations like this, and the only thing I can say is that all the campaigns that I’ve been involved in at Survival, and more widely, have been long campaigns.
Look at the campaign against slavery. That was a long campaign, and many people thought it was entrenched. But slavery was abolished eventually.
We should never think that we can’t change things. It’s easy to get depressed and defeatist. But when people and groups stand up, collectively, and are counted, and do whatever they can in whatever way, change can coalesce. And that’s why I hold onto some form of optimism.
And how do you hold onto that optimism in the face of setbacks like we’re seeing with the spread of industrial mining in the Yanomami Territory?
When I started, there were no Yanomami political organizations. And there were only a handful of Yanomami like Davi who spoke Portuguese and were speaking out. Now there are many more. So that’s another difference that gives me hope. The way they use technology to communicate their messages, the way that they’re lobbying the Brazilian government, and the United Nations, and the Organization of American States. That’s a complete change.
I know the times are very bleak. But people shouldn’t lose hope. When you lose hope, then you lose everything. The Bolsonaros of the world are not going to be in power forever.
How can non-Indigenous people learn from and stand by Indigenous groups and uplift Indigenous voices in a non-colonial way?
First of all, what we can do is educate ourselves by reading and becoming aware of things that may look like solutions to climate change that are not necessary. So for example, carbon emissions. The fundamental thing about offsetting your carbon emissions is completely wrong, because the message is, “Carry on polluting, but pay your way out.”
A lot of these proposals are very flawed—and colonial because they’re coming at the cost of Indigenous peoples. Much of the creation of national parks is done in this extremely colonial, fortress conversation way, kicking Indigenous people off their land with no attempt to obtain their free prior or informed consent. Why are they not working with the very people who could make conservation work with their eyes and ears on the ground?
There’s this arrogance that the Westerner or the scientist knows best. That has to be challenged.
What have you learned from Indigenous people about challenging these power structures?
I have seen extraordinary resilience in so many Indigenous peoples. Like the Guarani in Brazil. I’ve visited them in encampments where they are living on the side of the road between a massive highway and a barbed wire fence. And they’re still performing their rituals, absolutely single-minded about getting back to their ancestral land.
One of the most despairing conclusions of the United Nations report on climate change is that a certain degree of catastrophe is inevitable at this point—and that the new goal should be to avoid even worse disaster. What has your work taught you about inevitability?
The trouble with inevitabilities is that it becomes shorthand for “cross my arms and do nothing.” I don’t think anything is really inevitable. I’d rather turn it round and say it’s not inevitable. I mean, it’s extremely serious. It’s very grave. But there is still some time.
In the 1950s, you had people predicting that there would be no Indigenous peoples left in Brazil by 1980. That hasn’t happened. People in Brazil, the Indigenous movement, and certain sectors internationally didn’t let that happen.
They could easily, easily have said, “You know, it’s all inevitable. Indigenous people can die out or become integrated.”
Neither has happened. We have to be very careful about using the word inevitable.
What advice would you give a young activist who’s looking at the world right now and feeling despondent?
You as an individual have a whole load of possibilities. Always be prepared to go with your gut instinct and your values. And try not to get sucked in by the commercialism in the mainstream.
They have youth on their side. And youth is a fantastic thing. Youth refuses. They’re saying, “This is our future, and we don’t want this.”
We've done a terrible thing, our mistakes, and generations before us, and now we are putting it all on the young people, and it’s a very heavy burden. But at the same time, the young people are up for a fight. Without a doubt, the young people, Indigenous, non-Indigenous, north, south, east, west, are the hope for the future. My message would be never, ever give up. Nothing is ended until it’s ended.
'A huge disconnect': Developing nations say climate change agreement draft is too weak
GLASGOW, Scotland — Developing nations pleaded for more aggressive action to combat climate change on Friday, the last planned day of the United Nations Climate Change Conference, also known as COP26.
“There is a huge disconnect between where we are, where we will be, based on current projections, and where we need to be, based on what science is telling us,” said a representative of the government of Bangladesh, which currently holds the presidency of the Climate Vulnerable Forum, a partnership of countries especially affected by climate changes, such as sea level rise. (Rising seas could cost Bangladesh 11 percent of its land by 2050.)
Bangladeshi children sit on garbage piled up by the river Buriganga in Dhaka in 2018. (A.M. Ahad/AP Photo)
In a session presided over by COP26 president Alok Sharma, at-risk countries pleaded for increased ambition in the forthcoming agreement, the second draft of which came out Friday morning. In particular, they want bigger cuts in the greenhouse gas emissions that cause global warming, more assistance for developing countries to build economies powered by clean energy, and more funding to adapt to climate change and compensation for the losses they are already incurring.
“The current draft does not live up to our expectations,” said Camila Zepeda, the lead negotiator from Mexico, who was speaking on behalf of the Environmental Integrity Group. The government of Mexico, however, like those of many large developing nations such as Brazil and India, has also been criticized by environmental activists from its own country for insufficient ambition in its emissions targets.
“We need to phase out all use of fossil fuels immediately, including coal, and we must end all subsidies to fossil fuels,” said a delegate from Belize. “We must have language that provides support to those vulnerable communities already experiencing loss and damage.”
In particular, developing nations are fretting over the fact that emissions will rise 16 percent by 2030 under the current commitments, rather than dropping 45 percent in this decade, as the Intergovernmental Panel on Climate Change finds is needed to stay below 1.5 degrees Celsius of warming, which is the expert consensus on the maximum temperature increase that avoids triggering a cascade of catastrophic effects.
“Keep[ing] the focus on raising ambition of short-term commitments is absolutely critical,” said the Bangladeshi representative.
Bangladesh's Prime Minister Sheikh Hasina speaks during the 75th anniversary celebrations of UNESCO in Paris on Friday. (Julien De Rosa/AFP via Getty Images)
The urgency is especially strongly felt by small island nations that are already contending with enormous challenges from rising seas. Tuvalu’s Finance Minister Seve Paeniu, whom Yahoo News interviewed on Monday, expressed disappointment that the outcome of the negotiations hasn’t lived up to the soaring rhetoric of the heads of state who addressed the conference at its outset.
“In the first two days, we heard the passion and commitment of world leaders,” Paeniu said. “However ... in the negotiation rooms, we are not seeing that level of optimism being translated into the cover decisions before us.”
“We are at the forefront of climate change,” he added. “It is an existential threat now. We would like to propose stronger language, to raise the level of ambition.”
Outside, in a press conference, climate justice advocates from the Climate Action Network said the current agreement is not fair to developing countries.
“The current trajectory that we are on points to a very disadvantaged future,” said Mohamed Adow, director of the think tank Power Shift Africa. “We are already losing lives ... and there isn’t much support being provided to these countries to build their adaptive capacities.”
“It’s really unacceptable that poor countries are being asked to foot the bill for something that they did very little to create,” said Oxfam International executive director Gabriela Bucher. “The lives of everyone in the world depend on the decisions taken in the next few hours.”
