|Ken Novak's Weblog
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Tuesday, January 10, 2006
Confidence Game: Analysis of Iran situation from Christopher Dickey. "Iraq has taught us that 'unknown unknowns' make lousy targets. Will Washington heed that lesson when it responds to Tehran breaking its nuclear seals?.. Even some of the most rabid Iranian opposition groups think the mullahs can withstand whatever the Israelis or Americans throw at them from the air—and in the aftermath the Iranian public would rally around the turbans. Indeed, some opposition groups think Ahmadinejad is intentionally goading the Israelis to launch a strike for just that reason. "If they attack him, he will have his war; if they do not, he will have his bomb," says one well-connected exile ..
"The Iranians think they are untouchable," says a European diplomat involved with the negotiations .. Yet patience with Tehran may be wearing thin in Moscow and Beijing. Both governments joined with France, Britain and the United States sending letters to the Iranians yesterday telling them to back off from a renewal of the uranium enrichment research. ..
Paradoxical as it may seem, their greatest weakness is their oil and gas industry. Sure, Iran has the second largest oil reserves in the Middle East, after Saudi Arabia. But its facilities for pumping and processing the stuff are in such a sorry state that domestic demand for gasoline is 60 percent greater than the country's refining capacity. To keep up, the mullahs have to import more than 95,000 barrels a day. Iran has the second-largest known reserves of natural gas in the world—but it's a net importer of the stuff its people use. To make matters much worse, the mullahs long ago adopted a policy trying to buy popular support with massively subsidized prices for cooking gas, gasoline and other products. Today, those subsidies eat up a whopping 10 percent of Iran's gross domestic product ..
If Ahmadinejad succeeds in provoking the United Nations to impose serious sanctions, cutting off Iran's imports of heavily subsidized natural gas and gasoline, the first people to suffer would be the Iranian president's core constituency—the poor and uneducated. A long, tense game lies ahead, but, again like Iraq in 2003, there are options short of war that may yet bring the desired results.." 3:19:01 PM
Getting in early as China cleans up: "Stories on environmental disasters come out of China and other Asian developing countries regularly. A review of impacts and the resulting investments: "Environmental damage from pollution is costing China the equivalent of 7.7 percent of gross domestic product annually .. Other sobering statistics in the report, called "Connecting Asia," include estimates of 6.4 million work years lost annually in China to air pollution, 178,000 premature deaths in major cities every year caused by the use of high-sulfur coal and the fact that 52 urban river stretches have been so contaminated that they are no longer suitable for irrigation. ..
[Investment manager] Sorenson said that in terms of environmental standards, "China is now where the U.S. was in the late 1960s" [when disasters and new laws] changed the way U.S. companies conducted business. A similar process was seen in Japan, spurred by the Tokyo Olympic Games of 1964, and in South Korea, when Seoul was host of the Olympics in 1988. There is much hope that the 2008 Games in Beijing will prove as seminal in China's environmental development. .. In November, [China's] State Environmental Protection Administration estimated that the government would spend around $156 billion in environmental protection from 2006 to 2010. ..
Sorenson's FE Clean Energy Group is currently putting together an Asia fund, which Sorenson expects to total around $75 million. .. [Another is] the China Environment Fund, set up in 2001 by Tsinghua Venture Capital Management, a fund management company affiliated with Tsinghua University in Beijing. Catherine Cao, executive director of the firm, said that its third fund should be ready by the end of 2006 and aims to raise $50 million. Two previous funds [were] $13 million and $30 million..
The easiest means of entry for small investors still remains the mutual fund. The Impax Environmental Markets fund of £45 million, or $79 million, rose by around 32 percent in 2005. Among its biggest holdings are Casella Waste, a U.S. waste disposal company, Kurita Water of Japan and Horiba, a Japanese environmental testing company." Other options: big utilities, especially European, operating in Asia; Shenzhen Dongjiang Environmental, listed in Hong Kong; canada's Zenon Environmental; Nordex of Germany; solar companies Kyocera and Sharp. [via Salon] 11:33:41 AM