[Cc-fests&FR] [climatecamp-london] Are we sure what we're getting into here?

[Ian Duff]

Hi Ben and all...

In case you haven¹t spotted yet some good coverage in the Guardian
recently....

www.guardian.co.uk/environment

And I found some good paper on this website:

http://www.thecornerhouse.org.uk/subject/climate/

Hope they are useful....

ian




On 2/2/09 10:34 pm, "Ben Hart" <benhart33 at googlemail.com> wrote:

> Cheers for taking the time to write a response bonzhe- I reckon it's worth
> sending it to the rest of the list as it's a helpfull explanation of what
> looked to me a nasty piece of financial thinking.
>  
> I suppose there's a lot to be learnt about finance and (carbon) markets in a
> very short space of time! It also highlights the fact that we need to know
> what other financial alternatives there are if we are going to focus on Carbon
> Trading over the next year. With Energy and Aviation the alternatives are
> pretty obvious, maybe not so for uber complex financial instruments.
>  
> I think I've been staring at a screen for too long! Definitely time to go to
> bed....
> 
> 2009/2/2 bonzhe <bonzhe at gmail.com>
>> Ben,
>> 
>> This isn't so bad as you make out; the worst that can really be said about
>> these schemes is that they haven't yet been demonstrated to work, unlike
>> micro-finance. 
>> 
>> The idea is that entrepreneurs, social or otherwise, who could use a
>> (relatively) small amount of money upfront to buy the tools/equipment they
>> need to start a small business or cooperative, may be being held back from
>> doing so by the fact that they live in unjustifiable grinding poverty and
>> only have unstable access to subsistence-level jobs within the 'grey'
>> economy. Untaxed, no recorded assets according to the state, no property
>> rights etc. these people are entirely economically excluded.
>> 
>> and yet they live in houses which, though seemingly temporary, ramshackle and
>> handbuilt out of materials found and traded for, are in fact des-res to many
>> others. Using this as collateral on a loan is certainly risky - taking
>> something of value from someone who has little is a pretty horrendous thing.
>> But experiences with microcredit suggest that as long as the conditions are
>> supportive and effective, the defaulting rate can be so low that it would
>> make a US sub-prime lender weep and jump out of a window all over again. In
>> the case of the first microlending institution, Grameen Bank in Bangladesh,
>> it's around 2%.
>> 
>> Now, there is an argument to be made that it's not worth implementing the
>> scheme if 2-5% of the borrowers are liable to lose their homes. That's a
>> question you'd have to take up with Al Gore's buddies and the 95-98% of
>> people who borrow, do not default, and accomplish something that would have
>> been impossible beforehand.
>> 
>> But as I mentioned, the conditions are important. Grameen Bank had (and
>> perhaps still has) a policy of lending only to women on the principle that
>> they are more reliable, a bit like Diamond car insurance. When you remember
>> that this is in a country where historically women have not had much right to
>> own property, you see that this is a pretty radical idea. On top of that,
>> they would only lend you money if you were in a group - a cooperative if you
>> like - which sets up a mutual dependence which means that if I fail, I let
>> down the team as well. there is a kind of neighbourhood watch incentive to
>> make the scheme work. And so childcare groups, fishfarming schools, weaving
>> co-ops, little stalls serving hot food at lunchtime, and - the big one -
>> mobile phones find their way to places which haven't seen much opportunity
>> for small business ever ever.
>> 
>> Gore's buddies are speaking about potentially transformative development
>> practices in the language of financial globalisation. yes, they are
>> transparently appealing to the american
>> entrepreneur/investor/financier/philanthrocapitalist, but that's why they're
>> running an international organisation after all.
>> 
>> there are a billion 'slum dwellers' in the world. we shouldn't write off any
>> possible means to help them pursue their dreams and ambitions.
>> 
>> If I haven't managed to convince you not to worry about taking money from Al
>> Gore's buddies, let me know what your particular concerns are, and I'm happy
>> to respond.
>> 
>> All the best,
>> bonzhe
>> 
>> 
>> 
>> 2009/2/2 Ben Hart <benhart33 at googlemail.com>
>> 
>>> Ok- I was just having a look around Al Gore's various websites with the
>>> vague idea of applying to some of his campaigns for some CC funding. (Due to
>>> the "can't understand why there aren't rings of young people blockading coal
>>> fired power stations" comment.) Turns out he's got himself a sustainable
>>> investment company called Generation (http://www.generationim.com/), where I
>>> found the following statement:
>>> Background
>>> C.K. Prahalad and Stuart Hart define the Base of the Pyramid (BoP) as the 4
>>> billion people with annual per capita income based on purchasing power
>>> parity in U.S. dollars less than $1,500 (what is considered the minimum to
>>> sustain a decent life).
>>> 
>>> According to some experts, the Base of the Pyramid is an untapped market
>>> opportunity of $13 trillion in annual sales as well as significant invisible
>>> assets. In The Mystery of Capital, Hernando de Soto estimates that there are
>>> well over $9 trillion such unregistered assets (houses, equipment, and so
>>> on) in the rural villages and urban slums of the world." These are assets
>>> that could be used to collateralize loans/credit to allow people to become
>>> part of the economic system or market. Other evidence of BoP potential
>>> includes market demand for microfinance is close to $300 billion, as
>>> compared to the $4 billion of current supply. Today there are over 3,100
>>> microfinance institutions that served close to 100 million clients. And
>>> remittances are somewhere between two and three times the level of
>>> development aid from rich to poor countries. For example, a total of $167
>>> billion in remittances flowed to developing countries last year.
>>> 
>>> You couldn't make it up...........
>>>  
>>> Needless to say I didn't bother sending an application form in! Although i
>>> did ask what happens when the slum dwellers default on their payments?
>>>  
>>> Just an idea of what the new campaign is up against!!!
>>>  
>>> 


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