Wednesday, September 23, 2015

The #VW #Volkswagen emission control conundrum

Note: Not one single of the comments that follows is intended to diminish in any way or form the responsibility of Volkswagen for an incredibly unethical and criminal behavior. And of course Martin Winterkorn the CEO, as well as many other of Volkswagen must resign, even if not indicted by any malfeasance. Otherwise the not knowing what others were doing, could become a CEO’s and others prime responsibility... BUT:

How on earth did not emission controllers discover it all earlier?... after 11 million cars?... is there no real road driving control on each year models?... or did they have a software for that to.

We might have to be thankful for these treacherous/criminal (though quite ingenious) programmers since now the whole system of controlling emission might be revised in time. 

Of course those responsible in Volkswagen should be fired and probably put in jail... but And what about those 11 million cars’ emission controllers fooled... should they not resign and at least be publicly shamed too? 

Frankly, with emission controllers like these, global warming seems so much real and so much closer... and we're toast.  

Where can I find an emission control App, so that I do not have to pay emission control inspectors for a shoddy job?

PS. Perhaps Paris should have a little tête-à-tête with Volkswagen about what to do about embarrassing pollution ratings J

PS. If any little shady car manufacturer had come up with this in order to trick his local emission controllers, few would have taken much notice… but, for Volkswagen to do this in Europe, gosh that is indeed a potent signal! Thanks VW J

PS. Anyone who imposes regulations that can be gamed is the wrongdoer's best friend.

PS. Volkswagen turned EU's binding emission targets' control, which could be gamed, into a competitive advantage You developers of UN’s Sustainable Development Goals' the SDGs' controlling instruments... consider yourself having been clearly warned.

Feeling embarrased and sad... for the bug L

Friday, June 19, 2015

Is the Catholic Church now telling the Lutheran Church: “Thou shall not sell carbon emission indulgences”?

In the Encyclical Letter LAUDATO SI’ Pope Francis writes:

"171. The strategy of buying and selling “carbon credits” can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors."

For many years I have argued that “carbon credits” are like the indulgences sold by the Catholic Church for the forgiveness of sins, and which Martin Luther protested. And these carbon credits are currently much promoted by Germany.

So, in a strange twist of history, it now would seem the Catholic Church is telling the Lutheran Church “Thou shall not sell carbon emission indulgences”

Saturday, April 18, 2015

My proposal for this Earth Day 2015

Stop using purposeless, dangerous and silly credit-risk weighted equity requirements for banks, those which allow banks to earn higher risk adjusted returns on equity when lending to those perceived as safe than when lending to "the risky", like the SMEs and the entrepreneurs.

Purposeless: because major bank crises never ever result from excessive exposures to what is perceived as “risky” but always from excessive exposures to what was erroneously perceived as “absolutely safe”. 

Dangerous: because that completely distorts the allocation of bank credit to the real economy.

Silly: because why on earth should we taxpayers lend our support to banks if their only goal is to act as safe mattresses to stash away money in. Better to build a super-safe storage facility then.

Unjust and contrary to financial inclusion as they impede fair access to bank credit of "the risky", thereby killing opportunities and increasing the inequalities.

SO, begin using more purposeful potential of planet-earth sustainability, job generation and poverty reduction weighted equity requirements for banks. Why not equity requirements for banks based on DSGs and MDGs weights?

That way our banks will earn their highest risk adjusted returns on equity when financing what is deemed useful for the society.

That way it makes sense for us taxpayers to lend our banks the support they need, in order for these to take the astute risks we need for the world to move forward in a sustainable way generating jobs and poverty reduction.

Who shall you tell about this proposal? All bank regulators starting by the Basel Committee for Banking Supervision and the Financial Stability Board; and to multinational entities such as the UN, IMF, and World Bank.

If they do not listen to you, at least force them to explain their support for the current mind-boggling  stupid portfolio invariant credit-risk weighted equity requirements. 

Wednesday, August 20, 2014

If you do not want the earth to be toast, do not put it in the hands of a Basel Committee against Global Warming Supervision.

I just know that if what we are to do against the risk of global warming, is captured by a similar group of self-appointed experts, members of a small exclusive mutual admiration club, not accountable to anyone, like those in the Basel Committee for Banking Supervision and in the Financial Stability Board, and who made such a mess of the way how banks allocate bank credit to the real economy… well, then, pardon the pun, the earth is toast!

Saturday, April 12, 2014

Without green preachers, green besserwissers and green rent capturers, we might stand a chance of doing things right.

Any way you fight climate change I can fight better
I can fight climate change better than you
No, you can’t
Yes, I can,
No, you can’t
Yes, I can,
No, you can’t
Yes I can, Yes I can, Yes I can!!!!!

Tuesday, October 15, 2013

If regulators absolutely must distort the credit allocation of banks, let it at least be for a good purpose

The risk-weighted capital requirements, the pillar of bank current bank regulations, Basel II and Basel III, more-risk-more-capital and less-risk-less-capital, are incredibly stupid and serve absolutely no purpose.

Incredibly stupid since just some little empirical research would evidence that all major bank crises, no exceptions, have resulted from excessive exposures to what was ex-ante perceived as “absolutely safe”, but which ex post turned out to be risky; and none ever has resulted from excessive exposures to what ex ante was perceived as “risky”. In fact more-risk-less-capital and less-risk-more-capital, totally the opposite, would have been more correct.

And they serve absolutely no purpose because, allowing banks to earn much much higher risk adjusted returns on their equity when financing “The Infallible”, than when financing “The Risky”, causes banks not to finance the “risky” future, and mostly dedicate themselves to refinance the “safer” past.

In my opinion, nothing can help to enable so much the financing of our two most urgent needs, the creation of sturdy jobs for the young, and the investment needed for the sustainability of our planet than more correctly aligned capital requirements for banks. First these should be set equal for all bank assets, for instance 8 percent, but then allowed to be lowered, gradually, down to 4 percent, depending on the potential-of –job-creation-ratings and/or sustainability ratings, like the SRI or ESG ratings mentioned, whether of the project or of the issuer, and the length of the contract.

That, as you can all understand, would allow the banks to earn the highest-risk adjusted returns where they can be the most helpful to the society.

PS. I carefully reviewed the whole EUROWEEK issue on Sustainable and Responsible Capital Markets, September 2013, and, unfortunately, though it includes many good discussions, I did not found a single word about the perceived risk weighted capital requirements.

Tuesday, October 1, 2013

Jim Yong Kim, President of World Bank, and Christine Lagarde, Managing Director of IMF, here is a question on Climate Action:

On Tuesday, October 8, 2013 there will be an opening discussion by Jim Yong Kim, President, World Bank Group and Christine Lagarde, Managing Director, International Monetary Fund; on the the topic of “The economic case for Climate Action”; moderated by Zanny Minton Beddoes, Economics Editor, The Economist.

And below the question I would like to make to them all:

Current capital requirements for banks are weighted for the ex ante perceived risk of the asset; more-risk-more-capital, less-risk-less-capital. 

That does not make any sense, since the ex ante perceived risks are already cleared for by banks and markets, by means of interest rates, size of exposures and other terms. 

Besides, since all major bank crises have resulted from excessive exposures to what was perceived, ex ante, as “absolutely safe”, and none ever from excessive exposures to what was perceived, ex ante, as “risky” these capital requirements do not make sense in the quest of looking for the stability of the banks. 

And so, if bank regulators cannot refrain from playing risk managers for the world, and interfering with the markets, why does not the World Bank and the IMF at least beg them to design capital requirements based on the potential for helping the sustainability of our planet ratings, (and also on the potential for creating jobs, especially for the young, ratings).

That way the distortions which different capital requirements for different bank assets cause, and which hinders the effective allocation of bank credit in the real economy, would at least serve a social purpose.

In concrete terms that would mean changing from allowing banks to obtain better risk-adjusted returns on their equity when lending to “The Infallible” than when lending to “The Risky”; to allowing the banks instead to earn those higher risk adjusted returns on their equity when helping the sustainability of our planet (and when creating jobs for our youth).

Besides, the World Bank, as the premier development bank of the world, should know that “risk-taking” is the oxygen of any development, and that there is nothing as risky for the economies and for the society as an excessive risk-aversion; which is why in our churches we at least used to pray “God make us daring!

PS. World Bank, you who fight for reducing poverty, and the inequality gap, should also know that the current capital requirements based on perceived risk, functions as a wedge increasing the differences, between those already benefited by banks and markets, like solvent developed countries and AAAristocracy, and those already discriminated against by banks and markets, “The Risky”, like medium and small businesses, entrepreneurs and start-ups, and poor developing countries.

Per Kurowski
A former Executive of the World Bank (2002-2004)

Saturday, May 4, 2013

Holier-and greener-than-thou Al Gore ticks me off again

In minute 42.55of this video Al Gore says “Are [the scientist] all lying to get grants? Please!!!” 

But, what if it is true that the majority of scientists are doing just that? Since when are scientist the super-correct-humans? What always surprises me is that those most worried about the environment and therefore should be those most concerned with that scarce resources are used effectively, often seem to be the most willing to throw money at the problem… of course at their own solutions.

Frankly, why is it that quite often when I hear Al Gore preaching, and I even agree with much of it, instead of feeling like planting a tree, I fell like chopping one down?

Saturday, September 10, 2011

Friday, April 22, 2011

My green wheels

I celebrated Earth Day, April 22, not by getting me a hybrid car (I am not at all convinced by these) but at least by getting me some green wheels… and fortunately for me, as that color would not match the car's, the green is on the inside.

Thursday, April 7, 2011


Ecuador has been marketing for about three years a truly revolutionary proposal, Yasuní-ITT, consisting in asking the world for some of the resources it could obtain exploiting some important oil reserves so as not to have to exploit these, as they lie in a forest reserve that contains an extremely rich and valuable biodiversity. The proposal does not seem to be receiving as favorable response as it merits and I think I suspect some of reasons for that, besides that of having perhaps unnecessarily complicated the proposal with some technicalities.

During the 2009 UN conference on environment in Copenhagen I got upset seeing environmentalists from rich countries announcing that because the rich countries were the ones most to blame, they should and would assume the responsibility and pay for protecting the environment… which sounded just like global leftwing politicking, and effectively negated the poor the right to participate as human and equals in confronting something which from all perspectives would be a challenge to the human race.

In that respect it seems to me that the Yasuní-ITT proposal, because of its immense importance, should never have been presented as a government to government proposal, or one extended only to groups with environmental concerns, but should have been tabled as a proposal from the Ecuadorian citizens to all other indigenous people of the earth, meaning us, 1all other citizens. If the possible ecological damages of exploiting the oil in Yasuní-ITT are as serious as we are told, we cannot afford that the fight against these gets sequestered by other interests, agendas, or green Taliban.

Also, because the world needs oil and if not extracted in Yasuní-ITT it will do so elsewhere it would be good to have a study of the marginal environmental costs of exploiting oil in many different places. This would also be extremely important information if we later would like to replicate Yasuní-ITT.

The proposal was presented as having to select between a ferociously irresponsible oil extraction and a marvelous conservation of a habitat, and the truth is never that clear. It would be very important to know the cost and the significance of exploiting the oil in Yasuní-ITT in the most environmentally friendly way possible, so to also give the world the chance of accepting something that might sound more reasonable, or at least of knowing that this possibility has been analyzed. Since in Europe, the European taxman, by means of the taxes on its consumption derives more income from it than the country that gives up that resource for ever, it would seem quite reasonable that the European citizen could ask that at least a part of those taxes should go to help extract the oil in the best way possible. (Where is the oil company that specializes in green oil exploitation?)

But, more than anything, since no one likes to pay taxes to its own government much less would they like to pay a sort of an environmental tax to other governments, much less if these are rich in oil resources… the proposal should include that all funds, up to the last cent, should be given directly to the citizens of Ecuador… or in equal parts in cash, o through conditional cash transfer programs… for instance to all Ecuadorian children that go to school.

And I say this because as a Venezuelan I know very well that too much oil money in the hands of a government is bad… not only because it gets wasted, but mostly because, one way or another, involuntary or on purpose, that money ends up subjugating the citizens.

Translated from El Universal

Thursday, March 24, 2011

New-Klondike; a Green Five Star Resort

A Canadian Company, Greystar Resources Ltd, wishes to exploit some important gold reserves in the region of Angostura in the northeast of Colombia and to that effect has already invested some important resources. The initial project considered an open pit mine, but that proposal was withdrawn because of environmental considerations and now an underground mine is being considered.

Not that I know too much of these issues but over the last weeks I have received emails from environmentalist that wish to make sure the project is correctly executed.

One of them informed about an alternative project that included “supporting artisanal mining and local agriculture; payment for ecosystem services (from private businesses and public water users); and carefully developing ecotourism.”

When I heard the words “artisanal mining” it made my hair stand on end, as I remembered that when a couple of years ago I went to Tanzania I heard of a million of small artisanal miners doing their thing in that country and deforesting about 300.000 hectares per year. Of course to see the disasters of artisanal mining you do not have to travel that far… to our El Callao suffices (Venezuela)

Without doubt the larger mining organizations count, at least on paper, with more resources and organization to give us some more comfort about the environment being considered… of course always based on the spirit of trust but verify… and of course always with trustworthy and capable verifiers.

But the previous has not to block the opportunities entirely for the artisanal miners. Nonetheless thatr requires new ways or forms to capacitate and supervise the small independent miners. In this respect let me throw out some crazy ideas and that might very well have been raised before:

Though there are standards, type ISO, for large scale mining, it would be important to design some standards for artisan mining. But since it does not suffice with good standards if these are not complied with, perhaps we could start thinking in terms of an artisanal mining franchise, to which the independent miner should affiliate with and that should supervise the mining activities; and which could be held responsible by the world about that these activities were carried out in the best possible way considering the environment… and, why not, also considering their social impact.

One of the problems with mining, especially in the case of valuable mineral like diamonds and gold, is that the largest part of its value is frequently realized, and spent, far away from the area of extraction, which would make it important to find means of how to increase the possibilities of the local economies to capture a larger share of its formal and not illegal value. Ecotourism? Not a bad option but it does not on its own seem to carry sufficient punch so as to turn into a self-sustainable mining supervision tool.

Diamond cutting and minting might be somewhat extreme, not necessarily, but what could perhaps help the most is requiring from all concessions that five percent of all gold and diamond should be extracted directly by rich tourists from developed countries and who want to practice a sustainable artisan mining tourism… and that way see to that close to our mines “New-Klondike” 5 star Resorts are built.

Who knows, perhaps then our Colombian and Venezuela artisan mining even find it more profitable to serve refreshments to the tourists… while these sweat it out.

Sunday, May 16, 2010

What if capital requirements for banks had been based on jobs and sustainability?

Our bank regulators, the Basel Committee, imposed what I have always considered to be stupid purposeless and senseless capital requirements for banks based on the risk of default perceived by the credit rating agencies. Those capital requirements pushed the banks to drown themselves in private triple-A rated waters and some well rated sovereigns. Knowing the trillions of losses incurred because of that not a day goes by without wondering about what would have happened if those capital requirements had been based on sustainability and job creation potential? Surely we would have had a crisis from meddling that way with the banks, but, that meddling, would at least have served a better purpose than the current one.