Our goal – to inspire and learn, a new year resolution for 2015.

Resolutions are always good to start a new year with: Committing to Gamification sounds like a good one. The goal is to maximize enjoyment and engagement through capturing the interest of learners and inspiring them to continue learning. Then it occurs one element you need is narrative and at least one other is immediate feedback. Then it occurs what we are being conditioned, or thought we are being conditioned by our leaders, corporate and political. Other evidence of this is the narrative we increasingly hear is playing down the unpleasant rather than getting to the point – an example of spinmeisters at work deploying euphemism(s) expecting we let the words wash over us without scrutinising the underlying reality.

So now our good intention is turning out to be a communication strategy and not so much a goal to inspire – We are openly massaging our message to our stakeholders to transition our moving forward. But what if, if the intention was only pro-business and pro-market? By this we mean to benefit the rent-seekers only.

It then occurs that while we have good intention in our resolution, others might not share our values that climate change is real and urgent. That merely adapting for ‘climate variability’ is a loser view. It would seem, according to Dr Neil James: Workers, corporate and politicians alike are digging in for a long fight between the ideology of each for 2015. Reported is you just have ask around and you read and hear; “Minister’s who can’t or won’t compromise, Union’s lack the strength to force their issues, and a workforce wondering what is going on here? “

Co2land org does guess it is about the game after all, and we are still in hope for a happy new year. As was said in Monty Python’s Life of Brian – always look on the bright side of life.

Also introduced are the further extensions of language to confuse and obfuscate, and from Dr Neil James, executive director of the Plain English Foundation and the author of Writing at Work was said:

“In Australia, the nation’s finances dominated the political “narrative”. The Treasurer divided the nation between “lifters” and “leaners”. The finance minister huffed that our public broadcasters were merely being subjected to an “efficiency dividend”. The government later admitted that, yes, this meant their funding was being cut after all.

Then Amanda Vanstone weighed in as a member of the National Commission of Audit with what must be the mixed metaphor of the year: Let’s fix our roof while the sun is shining because we’re on a course to hit the rocks and we have to fix it.

In the era of the mobile device, we are subjected to more information in more places at more times than ever before. It has never been more important to deconstruct this kind of doublespeak and uncouple the corporate spin. 2014 provided plenty of examples of what to watch for in the year ahead.”

Then there are the ‘we are here to help you’ matters – Like the National Disability (NDIS) scheme where parents of young children are being helped. But there is a catch; your special school can now bill you for the government contribution equivalents and other fees that leave them out of pocket in a way not done before.

Then there are those innovation help schemes. One example from a LinkedIn group member involves the ‘improved’ Commercialization Australia Scheme, called ‘Accelerating Commercialisation Australia’.

Under the heading: Accelerating Commercialisation Australia – up close and personal, Mark Dunn wrote – “Having read all the paperwork, FAQs and consumer guides, I lodged an application with Accelerating Commercialisation, and found out what they are really targeting.

Basically, this is product development funds. You have to have your prototype product or service, and are seeking assistance to convert it into something that a customer wants, e.g. making samples to distribute, or working with customers to determine detailed specifications, or working to develop markets.

The rules say the grant scheme is potentially good for $1 million, for 1:1 matching funds, but to quote their advisor, ‘there is not actually very much money’ in the fund.”

Being we cannot help ourselves we set about looking at common reference tools and found:

Accelerating = Slow down (dictionary form antonym)

Commercialisation = making it easy for companies to engage and successfully exploit

Australia = a sing-along medley of mountains, deserts, reefs, forests, beaches and …

I guess with a sense of humour you could say come a waltzing Matildas with me!

But do we need it, to suffer anymore in 2015 with the ‘necessity’ of euphemism, obfuscation and metaphors aided by corporate and political spin?

Then we read something that is food for thought in showing we are all full of it, and that ideology has little to do with success. It starts with the headline: Government running costs to reach record high as disability expenses mount, by Markus Mannheim, 3 January 2015: The Goulburn Post – “Former public service commissioner Andrew Podger, now a public policy professor at the Australian National University, said the expenses were a better indicator of efficiency than the size of the workforce because they included costs racked up by private contractors as well as public servants.

There have been a lot of experiments in efficiency over the years – outsourcing was one, another is shared services to try to take advantage of economies of scale …” he said.

“We had a period of decentralising government bodies and now we appear to be moving back to centralising a lot of work back into departments.

But you can’t say one method is more efficient or cheaper than another: it should be decided on a case-by-case basis for each program.

Real running costs grew rapidly under the Howard government. Labor, meanwhile, managed to restrain its operating expenses despite its massive spending projects to counter the global financial crisis.

Last month, as part of the Coalition’s “smaller and more rational government” agenda, Senator Cormann detailed plans to abolish or amalgamate about 250 government bodies, though most were small committees.

He also released a paper outlining the Coalition’s philosophy on the role of the public sector.

As a principle, government bodies should not be given preference as service delivery agents, where others are more capable of providing the same service …the minister wrote.”

We must finish with tying all this back to our advocating for a sustainable world, and the headline:

Heat is on Abbott government over climate change as world turns, 3 January 2015. “This could be the year of extinction for the climate-change denier” writes Peter Hannam. He goes on to say about the stance of the NSW Coalition Government: “When the Baird government unveiled the first high-resolution mapping of how global warming is expected to shift the climate for NSW, Victoria and the ACT by 2070, officials were quizzed why they weren’t using “climate variability”, a term favoured by federal Coalition counterparts, to describe the outlook.

This is the NSW government, we believe in climate change!” came the immediate response at the last month’s media briefing”.

Co2land org now asks is Gamification to be accessed in a similar way to narcissism. Classified as good and bad! We say we are good!

An Inconvenient Truth – regulatory response ash to waste

An inconvenient distraction: A vexatious type can make it difficult for success and a friend points out ‘a difficulty’ and you find yourself in a position of lampoon. The issue is should what you report be directed or controlled. To illustrate we published, 13 December 2014, “Maybe the question is better put this way: Plants don’t need carbon, soils do. Biochar is but a hazardous waste from pyrolysis”. This was not a position statement; it was outlining a problem of perception promoted by deniers that you should think of it as an ash.

On 13 December 2014 we also wrote – “The quandary for most of us when we express our thoughts is we can be regarded as excessive or obsessive for seeking out an agenda”. In this story CO2Land org had an agenda – to make one aware. To be aware that moves were afoot overseas to have ash declared ‘waste’. The below the radar application if you want to make more of it.

What is difficult to accept is that the catalyst for this change was the coal fired power stations in the USA. The story unfolds as:

On 22 December 2014, http://www.wastedrive.com published that – Feds: Coal ash classified as solid waste – by Nicole Wrona. This followed a story published by Dina Cappiello The Associated Press on 20 December 2014 through the Casper Star Tribune. Outlining: “The Obama administration on Friday set the first national standards for waste generated from coal burned for electricity, treating it more like household garbage rather than a hazardous material.”

To directly quote wastedrive.com – on the affects of the new regulations:

Dive Brief:

  • New federal standards will categorize coal ash as a solid waste instead of considering it a hazardous material.
  • The classification was determined despite pushback from environmentalists. The regulations do not extend to shuttered power plants, but would apply to closed ash ponds where utilities are active.
  • States will continue to ensure standards surrounding the waste are followed. The federal government would have taken over enforcement had the decision turned out differently or if the waste had been dubbed “hazardous.”

Dive Insight:

  • The Environmental Protection Agency (EPA) said it would protect citizens from the risks associated with coal ash waste sites while pledging to hold corporations who operated ash waste sites accountable. The rules are expected to increase leak monitoring, control blowing dust, and to require companies to publicly release test results.
  • Waste Management had predicted a substantial amount of growth for the company if the rule were to be approved. The ash waste stream is larger than the waste stream currently handled by the company.

Recommended Reading:

Now back in Australia the Carbon Farming Initiative is sympathetic to bio char from pyrolysis. The difficulty is the regulations that are responded to by the EPA of each state. The question now is will this USA EPA ruling be followed in Australia? Will bio char too be cleared of any stigma of a perception either implied or express that it is an ash – should be leave this to experts?

It is not that simple. As we said previously what is needed to be truly progressive is the commitment to investigate the potential. Do we need a senate inquiry to get that moving? We see some wonderful benefits where multiple products could be extracted from just a simple classification change being the catalyst.

The facts they say: About the poles and wires selloff.

The facts they say: About the poles and wires selloff. Revenue is a weird thing and it is all about your plan. That is short term gain verses long term revenue. What can get missed on that point is what is changing around you can be a bigger factor than the emotion around the change. That factor is technology and the transition strategy to survive – to survive you need to transform how you do your business or get pushed aside. The other issue is not only the technology challenging you it is the skill required to understanding how to take the opportunity to exploit the rise of the technology. These comments are as important for Energy Network companies as they are for banks, the financial services industry, sales, commodities traders, agribusiness and manufacturing. Dare we also say, political response, too.

One group we know of, http://www.solarcitizens.org.au has been active in seeking “to change the game”. They are referring to the practices and the behaviour of companies that run electricity networks. They are targeting those that control how we get our electricity and are encouraging concerned parties to participate, by way of a submission into the Australian Senate Inquiry, and submissions closed 18 December 2014.

The Senate is looking to spotlight whether it is fair that power prices have surged across the board in Australia. Whether it is because of the unnecessary upgrades to the electricity network, known as ‘gold-plating’ of the grid. What is being investigated, and you can see the full terms of reference for the Senate Inquiry here:

  • Whether energy companies have misrepresented information to the energy regulator for their benefit
  • Allegations of price rorting by companies
  • Whether current network arrangements discriminate against homes and businesses who generate their own power, and
  • The possibility of establishing an independent body to investigate and prosecute poor behaviour.

Those that say the plan to sell off the poles and wires claim privatization leads to higher prices, reliability of supply declines, maintenance is avoided with disastrous consequences, and what could the most persuasive of all: Once it is sold that revenue source is gone!

Then we read ABC News 21 December 2014 the story headed New Tas energy plan will drive down power prices: Government.

“A new energy plan for Tasmania will result in lower power prices, the state’s Energy Minister says.

The Government is inviting Tasmanians to have their say on its new draft energy strategy.” Public submissions are open until mid-February.

This is said to be an opportunity to attract new business to Tasmania and for better ways to utilise the state’s existing energy assets.

They also moot the possibility of a second Bass Strait to the mainland interconnector and expanding their hydro generation output by 10 per cent.

They also quote the Energy Minister Matthew Groom:

“This is about a mindset shift, this is about recognising that the energy businesses are primarily there to deliver energy advantage to Tasmanians, and central to that will be the lowest possible power prices that are genuinely sustainable……………..We saw power prices increase by more than 65 per cent over seven years……..That’s unacceptable and under this new strategic direction, it cannot happen again.”

The strategy includes more work on encouraging competition, with the Government still open to selling Aurora Energy’s customer book.

We should say the truly progressive part is the commitment to investigate the potential of using forest residue for biofuel.

CO2Land org has empathy with the cause. That said we should realize the poles and wires (Electricity Networks), historically are a 130 plus years old system. Some did not have the network system for some times after that, and some still do not have access. It also follows that regulators and those consulting to the companies were constantly expecting continuous load growth on the network. The evidence is that is not now happening and predictions are it is now a very different market. In our opinion anything that can be gamed is a market and will be treated as a commodity by the players. The selloff of the networks is evidence also that the predominately state owned utility companies want to divest themselves of ‘services’ and the new owners will have the reign to treat all as a commodity. If you do not believe us – think of the new rules coming into play referring to ‘Cost reflective’ for network charges.

Are the rules setters correct? One argument that has gone for some time – at least since 1996 that we are aware of, is the fairness of cross subsidies within the networks charges being to transfer cost burdens from the sparse population region to the concentrated population region (country and city users). If you think of what the Australian Energy Regulator (AER) is saying and the Australian Energy Market Commission (AEMC) is saying it now it is enough it must change. Where it gets ugly is when you ask is the issue a question of to whom is the favour for – Business as usual and the rent seekers, or those that are bold and go forth with the transition to change.

Again, that all leads to the need to develop new business models and that need will be regardless for the reasons we started in para 1 of this discussion – the factor of technology.

A very likely model is that energy networks will adapt and change, and part of our believe of this is there will still be a need for some form of infrastructure to deliver the power. It will not matter is it is micro grid or long runs of poles and wires. The infrastructure will have new build, maintenance and upgrade needs. And, who pays? You do no matter what is the model.

A Quandary – Nit-pick or constructive critique of CFI ERF

The quandary for most of us when we express our thoughts is we can be regarded as excessive or obsessive for seeking out an agenda – the agenda to change that might be procedurally correct, but fails to address the main issue. For instance the Emissions Reduction Fund – Irrigated Cotton draft determination and associated documents (the consultation process closed 12 December 2014). The main issue, as with other Carbon Farming Initiative methods, is that it is harder for leading growers to be rewarded, as there is no recognition of past improvements.

In the main we found the draft cotton determination, draft cotton explanatory statement and the draft cotton equations, as is, to be sound. It has its process thought through well enough and while we could say some of the flow could be improved any further submission could appear to be nit-picking as opposed to constructive criticism.

Was there room for constructive critique? Yes, but these are areas we might like to adjust the eligibility criteria. Also a little tweaking of what appears too broad in the descriptions. They are areas that could be argued as wrong, but they really are areas for the regulations or legislation to be adjusted. When you access the process of a determination your role amounts to comment on the process that is laid out in the draft determination. It is not the appropriate place to express frustration with the rules. Expressing your frustration is really the domain of the politics.

Being we mentioned the ERF – Irrigated Cotton draft determination, we should let you know what is it about. The first thing is it is the opportunity for growers to obtain certificates called the Australian Carbon Credit Unit (ACCU) under the Act 2011 called the Carbon Farming Initiative (CFI). The reference to the Emissions Reduction Fund (ERF) is part of the CFI Amendment Bill 2014. The fund is designed to help reduce Australia’s emissions by providing and incentive for business, landowners, state and local governments, community organization and individuals to adopt new practices and technologies which reduce emissions. The ERF does include incentives for business activities and farming practices. To find more go to: http://www.cleanenergyregulator.gov.au .

A bit more about our thoughts on the determination and consultation on the Draft Energy Reduction Fund: Irrigated cotton.

  • The ‘system’ is for irrigated cotton growing mainly in Queensland, NSW and Western Australia.
  • The incentive is to encourage Nitrogen fertiliser use efficiency and efficiency is a measure of the ratio of lint yield to nitrogen applied via synthetic fertiliser (kg lint yield per kg N).
  • An increase in nitrogen fertiliser use efficiency is equivalent to a decrease in emissions intensity from synthetic fertiliser use in irrigated cotton (t CO2-e per kg lint yield).
  • Because nitrogen fertiliser use efficiency is calculated using both nitrogen fertiliser use and yield, credits for emissions reductions can be generated by reducing fertiliser use while maintaining or increasing yield, or by increasing yield without a corresponding increase in fertiliser use. This approach also ensures that credits for emissions reductions cannot be generated through a contraction of yield without a reduction in fertiliser use.
  • The draft Determination therefore enables irrigated cotton growers to adjust nitrogen fertiliser rate according to paddock yield potential in the project area, provided that nitrogen fertiliser use efficiency increases.
  • There is support for a broad range of activities to improve the efficiency (reduce the emissions intensity) of fertiliser use in irrigated cotton, including activities to improve lint yield without a corresponding increase in nitrogen fertiliser application rate, and activities to modify the rate, timing, method and efficiency of nitrogen fertiliser application.
  • Proponents have the flexibility to select management actions that suit their individual circumstances.
  • In this draft, cotton is the only crop in the production system eligible for generating credits for a reduction in emissions from synthetic fertiliser use.
  • Emissions from other crops grown in rotation with cotton, with the exception of green manure, are excluded from this draft Determination.

What is Synthetic fertiliser?

Inorganic are sometimes called synthetic fertilizers since various chemical treatments are required for their manufacture.

Synthetic fertilisers do not include solid or liquid organic products created using waste products of other industries that do not meet these labelling and minimum nitrogen content standards. For example, synthetic fertilisers do not include manures, such as poultry litter or beef feedlot manure, or mulches and composts, such as composted ginning trash.

What is a Green Manure?

A green manure is a legume that is planted in a paddock to improve the soil for a subsequent cotton crop. A green manure crop is not harvested and the above ground growth is returned to the soil. Examples of green manure are vetch, faba beans, chickpeas and annual clovers. Non-legume crops which require nitrogen fertiliser are not included in the definition of green manure

What is Organic fertiliser?

Organic fertilizers are usually (recycled) plant- or animal-derived matter. The main “organic fertilizers” are, in ranked order, peat, animal wastes, plant wastes from agriculture, and sewage sludge.

If you picked up on peat as a organic fertilizer and the reference that it has no nutritional value to the plants, but improves the soil by aeration and absorbing water. You might ask why is biochar not a fertilizer?

Bio char

It gets down to two issues:

  1. Bio char is described as a sequester of carbon and as such binds carbon to its properties.
  2. So broad is the definition that it is seen to be the product of ‘burning’.

The later point is where it gets interesting and frustrating. This is because the technology for fine chars is thermochemical decomposition of organic material at elevated temperatures in the absence of oxygen. In another speak, Bio char is created by pyrolysis of biomass.

We do not argue that is a fertilizer. What we argue is it is an agent to improve the efficiency of fertilizer use.

Another potential for confusion is linking soil carbon to bio char. Soil carbon is a condition and bio char is a conditioner. If you think one is the constant and the other the agent for change it makes sense does it not?

That leaves the issue of if it is helpful why is it excluded from the incentives?

Maybe the question is better put this way: Plants don’t need carbon, soils do. Biochar is but a hazardous waste from pyrolysis, looking for a below-the-radar application. Do we have that application? But that is for another discussion and a case study!

The leap of faith to a low-carbon future – Engineers Australia

The platitudes no longer cut it, the cries that the scientists are wrong is being proved wrong. Since the carbon pricing signals were removed from our (Australia’s) trade all the numbers are going backwards. Our energy intensive industries are increasing emissions (Hugh Saddler wrote, 2 December 2014) “the recent emissions trend ‐ since the last CEDEX® report with data to June 2014 – is an increase in total emissions of 2.2 million tonnes CO2‐e, with a large increase in electricity generation emissions and a smaller increase in petroleum emissions. Then on 3 December 2014 the national newspapers reported from the accounts data released that day – we are officially in an income recession. It follows our manufacturers are in decline, our commodities crisis is real and our trading partners have been stockpiling to ride out the storm – the financial storm that affects jobs, the economy and the deniers ability to hype hysterical nonsense about contributing to environmental fraud.

Outside of science, is anyone of note is taking this whole business of a low carbon future seriously? Yes, the banks are, and so are our engineers. The engineers’ story is:

Engineers Australia commits to designing the quantum leap to a low-carbon future. Willow Allento on 27 November 2014 published,

The interview write up and policy highlights are here: http://www.thefifthestate.com.au/innovation/engineering/engineers-australia-commits-to-a-low-carbon-future/70016

“Around 100,000 of Australia’s brightest innovators and designers and operational experts committing to a climate change policy and sustainability policy that is binding within the professional code of ethics, that’s a game-changer. Interviewing Dr Cruikshanks-Boyd this morning and reading the policies again and again [pithy, pointed and absolutely game-changing] I keep thinking – “This is the quantum leap we needed to escape the turmoil of the policy lens and have concrete action that really changes everything substantially.”

Can engineers save the planet? I reckon it’s tremendous they’ve set themselves loose on the opportunity to do so!

Engineers Australia has put sustainability and climate change mitigation at the core of the profession, with the formal adoption of two new policies and a series of events on opportunities.”

We read the policies were also peer-reviewed by 25 external bodies. So it is not insular it is outward looking to establish the practice and engage. They are actually committed to put sustainability up front engage with clients to promote the business case. We further quote:

“As engineers we have a role to play not just in innovating, but in selling the business case.

Regarding the property sector, he said engineers must make clear to clients there is a market for sustainable buildings, and use lifecycle cost analysis to demonstrate the cost-effectiveness of taking a more sustainable approach and gaining “market edge”.

While the policies were passed unanimously, there was robust debate, he said, particularly around the climate change policy, with a significant minority of members opposing the climate change policy on principle initially. He said given the organisation has about 100,000 members, all of whom were consulted on numerous drafts, a percentage of sceptics was to be expected.

On an organisational level, the policies mean Engineers Australia is throwing its combined weight and expertise behind efforts to transition to a low-carbon energy future, reduce fossil fuel dependence, design within a lifecycle costing framework, look for industrial ecology opportunities in managing waste, and prioritise renewable resources wherever possible.

There are a lot of engineers associated with the fossil fuel industries, and I thought we would strike problems with them during the debate [on the climate change policy]. But the more balanced members in that industry recognise it must be dealt with, so we resolved that through the simple addition of a statement that there would need to be a transition from fossil fuels,” Dr Cruikshanks-Boyd said.

At this point CO2Land org notes a fundamental point for getting anything done, as it is possible to get polices of government changed through professional lobbying and advocacy, the real impact happens at the individual level. We also learnt, and we admit we too are learning, sustainability has been one of the four pillars of the Engineers Australia organisation binding code of ethics since 2010; to continue the quotes:

“While Dr Cruikshanks-Boyd is disappointed in the current “entrenched situation” regarding government policies on climate change and sustainability, he said Engineers Australia would ensure the new policies and the views they represent were well known to government.

He also said that the profession was in a position to leverage enormous positive change regardless of government policy through placing its focus on achieving sustainable outcomes in all they do. Just as there are negative tipping points that lead to collapse, there are positive tipping points that lead to exponential progress”.

A fundamental point of our mortality is also made in that professions live longer than politicians. We assume what was meant is that politicians are most concerned for themselves and professionals for their legacy. Without too much more waffle below now is more direct quoting from the article:

Some of the key statements in the Climate Change policy include:

Building upon a long history of Engineers Australia policy development, and as the largest technically informed professional body in Australia, Engineers Australia advocates that Engineers must act proactively to address climate change as an ecological, social and economic risk.

Engineers Australia is committed to natural resources policy reform to adopt full life-cycle analysis, including the pricing of resource use externalities, to ensure responsible resource allocation decisions.

Engineers Australia will work to facilitate statutory, regulatory and policy reform such as progressive Renewable Energy Targets, incentives to promote renewable and sustainable energy technologies, energy efficiency standards, transport emission limits, and incentives/disincentives to reduce dependence on fossil fuel sources. It is recognised this is part of a transitional process.

Engineers have an ethical responsibility for, and play a key role in, limiting atmospheric greenhouse gas concentrations, through transformative change and innovation in engineering education, and practice.

Reduction of the emission of greenhouse gases to the atmosphere associated with engineering activities should be accorded urgent priority in engineering endeavours.”

Some of the core statements in the sustainability policy include:

Our Code of Ethics requires us to develop engineering solutions that repair and regenerate both natural and social capital, while maintaining economic health.

Engineers Australia acknowledges that to achieve sustainability outcomes requires transformative change in business practices, lifestyles, and in the way resource allocation decisions are made.

Fundamental to this change is the recognition that a healthy economy is underpinned by a healthy environment and respect for all life on earth.

Engineers Australia and its members commit to ensuring all relevant stakeholders are consulted, and that open and regular reporting of progress towards delivering sustainability outcomes forms a fundamental component of engineering practice.

This Sustainability Policy is supported by an Implementation Plan, which articulates specific changes to engineering practice that arise from adoption of this Policy.

Specific sustainability considerations to be applied to engineering practice (policy and projects) include (not in priority order):

  1. The use of resources should not exceed the limits of regeneration.
  2. The use of non-renewable resources should create enduring asset value (everlasting and/or fully recyclable), and be limited to applications where substitution with renewable resources is not practical.
  3. Engineering design, including product design, should be whole system based, with consideration of all impacts from product inception to reuse/repurposing.
  4. Product and project design should consider longevity, component re-use, repair and recyclability.

Eliminating waste should be a primary design consideration. Unavoidable waste from any one process should be examined for recycling potential as input to another productive process.

The rate of release of any substances to the environment should do no net harm, and be limited to the capacity of the environment to absorb or assimilate the substances, and maintain continuity of ecosystem services. In all instances, such releases should be lifecycle-costed and attributed.

Proactive and integrated solutions are preferable to reactive, linear, “end of pipe” solutions, such that there is a net sustainability benefit.

In circumstances where scientific information is inconclusive, or incomplete, the precautionary principle and risk management practices should be applied to ensure irreversible negative consequences are avoided and not passed as a liability to future generations.”

Co2land , as you would expect is pleased to see Engineers Australia is throwing its combined weight and expertise behind efforts to transition to a low-carbon energy future. Our only point that could improve that position were they say ‘reduce fossil fuel dependence, design within a lifecycle costing framework, look for industrial ecology opportunities in managing waste, and prioritise renewable resources wherever possible’, we would prefer the words ‘eliminate fossil fuel dependence’. Sometimes the simple wording is more meaningful!

Fairly unfair – Energy Network price setting

Gold plated networks practice stopped, and cost reflective price setting will be the market policy. Yes, prices will rise. However prices will be controlled in a fair way it is said. It is an interesting game and thinking about it you realise it is ‘business as usual’ with an appropriate spin for self fulfilling prophesies. Actually it could be prophecies as it depends on if you are using the term as a verb or noun. For instance whether you are forewarning of significant price increases with callous regard to the customer, or anticipating being able to inspire the process of one or more messages that have to be communicated on behalf of the ‘good’.

Previously Co2land org wrote that the question that is most difficult is are you pro-business or pro-market. We have found a new term for the customer as a position description ‘pro-sumer’, and the position is the customer must be the one that willingly pays. We won’t bore you with theories of elastic and inelastic demand as this is a supply side argument. However, we might suggest you develop an instinct that identifies what can be summed as – ‘The rustling of the leaves tells a story, warns of a danger, and a lot of … is going on’. Beware you might not like what you see and the problems are in the detail. So what is the story behind it all?

The story is the players displaying how they justify the costs of reliability of supply. It is not about balancing the supply and demand for more efficient and reliable source of supply. A little more explanation please we hear you say. The business and the market of the energy supply is a supply side focus. That is why the energy companies are called, in the rules, the supplier, and where the customer might curtail or offer low volume generation into the supply is called the provider. Where the customer consumes they are called the user, or more recently termed the ‘pro-sumer’ where they make smart choices. All very simple is it not!

It remains at issue is your network charges will rise regardless.

The questions are how much and why is the political term ‘gold plated’ being used to substitute for what was called redundancy in the past – In this case we explain: “Redundancy is the duplication of critical components or functions of a system with the intention of increasing reliability of the system, usually in …” Source en.wikipedia.org/wiki/Redundancy_(engineering).

The remainder of the story uses other sources as follows: http://www.canberratimes.com.au/act-news/actewagl-says-power-supply-in-canberra-at-risk-20141127-11uyv7.html

, and

http://www.goulburnpost.com.au/story/2726997/australian-energy-regulator-clamps-down-on-network-charges/?cs=12

, and

http://reneweconomy.com.au/2014/regulator-slaps-down-networks-on-more-attempted-gold-plating-22048. Also AEMC paves way for changes in network pricing for solar, air-con.

The network view:

ActewAGL: Chief executive officer Michael Costello says the draft decision from the Australian Energy Regulator does not make sense, and could lead to catastrophic failure.

“We not objecting to a reduction in price, …What we are objecting to is the degree of the reduction, and the fact it threatens reliability, stability and, if it does go far enough, the safety of the network.”

Energy Networks Association head John Bradley said the “unsustainable” spending cuts could compromise reliability, safety and efficiency outcomes for customers. “If implemented, these funding cuts put at risk key consumer outcomes relating to safety, maintenance and outage response times,…Consumers end up paying more under this kind of ‘roller-coaster’ regulation where underspending is followed by higher cost catch-up spending and political intervention.”

The Regulatory View:

Australian Energy Regulator (AER) chair Paula Conboy says under new rules the regulator’s focus is squarely on outcomes for energy consumers, for a safe and reliable network. “So we have to ask ourselves, why should customers be required to pay more?….. Our draft decisions propose lower allowed revenues for transferring electricity and gas, which, if implemented, should result in lower energy bills for end users in the ACT and NSW,… These reductions would be followed by small increases in each of the three subsequent years [in line with the yearly Consumer Price Index]…. Network charges on bills have inflated with extravagant spending – or gold-plating on poles and wires – in recent years and now account for 50 per cent of an energy bill issued to NSW users.”

RenewEconomy asked Conboy if the network revenue application were simply a case of them prosecuting “business as usual” rather than the transformation – the “prosumer revolution” – identified by new AER chief executive Michelle Groves, the chief executive of the AER.

Groves said last month:  “The electricity industry certainly is changing. In fact it is not much of a stretch to say that the next couple of decades will witness something of a revolution in the way small customers interact with the electricity industry. In the future there will be more scope for even the smallest energy users to become active participants in the energy market.”

Conboy said we would have to ask the networks if they were focused on business as usual.

In a separate announcement, the Australian Energy Market Commission (AEMC) said new pricing rules will begin on December 1.

“By having prices that reflect the costs of different patterns of consumption, we are giving consumers clearer choices as we develop a more efficient, incentive-based network regulation framework,” AEMC Chairman John Pierce said .

The Users View: Large, SME, Domestic Advocates.

Gabrielle Kuiper, senior policy officer at the Public Interest Advocacy Centre, said the AER’s draft decisions were welcome news to the increasing number of NSW families struggling to stay on top of soaring energy costs. Dr Kuiper also said there was room for improvement in regards to the allowed rate of return – the forecast of the cost of funds a network business requires to attract investment in the network.

Oliver Derum, another senior policy officer at the advocacy centre, said energy prices could drop even further if the NSW government before the proposed lease of the networks writes down previous over-investment by the networks. “That could cut bills further by hundreds of dollars a year. We would urge the NSW government to consider this option as part of the sale process,” he said.

The Parkinson Report says (Giles Parkinson that is), “The draft rulings are part of a big game between the networks and the regulators over how much they can spend on upgrades, charge for maintenance, and for the cost of capital. The networks have a history of asking too much, and while the AER has sought to cut them down in the past, they have often been over-ruled, or forced to compromise on appeal.

(The AER decides how big the revenue pie will be for the networks. In an associated decision, the Australian Energy Market Operator has confirmed new rules that will require networks to introduce “cost reflective” tariffs, which will likely mean higher fixed and/or demand charges, which could affect households with solar arrays)… Hence the focus on this new round, particularly in light of the incursion of solar and battery storage into the grid, and the emergence of a new decentralised energy model. The AER, in its draft decisions, said that its estimate should result in a lowering of electricity costs, rather than a rise if the networks were allowed to have their way”.

Co2Land org review:

It all looks too much like they want your energy supply to be viewed as a commodity attached to a financial service. You see a commodity price can be manipulated as a means of control. If you lose control the networks cannot keep the growth numbers where they want them – ‘business as usual’.

Look further at the network lobby group, the Energy Networks Association, which has never conceded gold plating in the past, wants solar incentives reduced, higher fixed charges to consumers, and argued that it would be too expensive to quit the grid, said the AER ruling threatened the reliability of the network – an old favourite of those arguing against carbon prices, renewable energy, or any much change at all.

Reneweconomy says solar households face inevitable changes to the way their bills are packaged after the Australian Energy Market Commission delivered new rules which will require networks to impose “cost reflective” pricing on networks.

According to the AEMC, the changes will not only cater better to different patterns of consumption, they will benefit all consumers in the longer term as lower peak demand reduces the need for spending on infrastructure, and they will likely result in changes in tariffs to encourage households to avoid switching everything on at peak times, or at least pay for the privilege, and also for solar households. It could, for instance, encourage more homes to install west-facing panels rather than north-facing panels, but the final tariffs will be up to the networks to decide.

Reneweconomy goes on the say: In effect, while the Australian Energy Regulator decides how big a revenue pie the networks can eat – and based on today’s decision it is a lot smaller than last time – the AEMC is proving rules that decide how the networks can slice and dice that pie.

The new rules also affect households with air conditioning units, as the main targets of new tariffs aimed at recovering network revenue.

The arguments all centre on fears of the networks are losing market share, and are keen to get as much “network pricing” out of the pro-sumer as they can. The pricing set and recovered from different consumers, says the AEMC, with the key factor to determine how much consumers pay being their individual usage pattern or load profile.

The bit we love sic most “This rule change will not actually set new network prices – that is a role for the networks themselves and the AER. It does create a new requirement that reveals the cost of people’s energy choices,” AEMC’s Pierce said. Other AEMC quotes “Under these changes, we estimate around 70-80 per cent of consumers would have lower network charges in the medium term…Research undertaken since the draft rules were released for public consultation in August shows network prices are likely to be lower in the long run with cost-reflective prices,…

Research shows average residential charges could reduce by $28 to $145 per year. Households which use power at a steady rate through the day will receive the biggest benefits…Based on Victorian trials, we also found a small business could save up to $2,118 or 34% of its total annual electricity network charges by using less electricity at peak times for just 20 hours per year when networks are congested,…

Once the new rule commences on 1 December 2014 network businesses need to start consulting on their new tariffs and submit draft proposals to the AER in late 2015 for new prices that will start no later than 2017.”

Head spinning – it should be!

Our final word: We suggest it is because the term gold plated is different to redundancy in that the former highlights the risk of stranded assets.

ChAFTA – ‘real’ big deal – but!

On balance is a fair term when describing trade. However, when you say Free Trade there has been some disquiet across a number of industries. Clearly there are some clear winners and some areas of concern apparent from the China Australia Free Trade Agreement (ChAFTA) signed, 17 November 2014, between the two countries. As with all good stories comes a more interesting one. How to make it work will come in time. It is time that is most important. If you think culturally, something becomes obvious – Western world thinks 5 years is a good plan, Eastern World sees no sense in less than 10 years and prefers 100 years. So is it about plans or planning?

If you did not already know – NZ released a press announcement on 7 April 2008 that it signed a Free Trade Agreement with China. For reference go to chinafta.govt.nz – as far as we can tell the last press release was 12 April 2013 on progress on that sight – maybe someone else knows why?

One topic on the official NZ site is the comment: Are you ready for China, and that forms the discussion from this point.

Starting with two words that seem popular – collaboration and cooperative. We find a world of difference yet seemingly very similar words. It is how they operate that matters. One is a verb and the other an intransient verb – inner or outer if you prefer.

To collaborate suggests to work with others and is an intransitive at an intellectual level whereas the Australian version of ChAFTA is missing encouragement of cooperatives to take advantage. Why is this important? Because it is yet to be fully explained what is the level of risk. Risk of the franchise is the more important thing to work through when considering the deal.

The talk from the positives claim it will build on the indications from China that it values a further deepening of our trading relationship. For instance, the setting up of a ‘settlement hub’ in Sydney, based on Chinese Renminbi exchange. This hub is designed to make doing business with and in China easier. While restrictions to trade and tariffs ranging from dairy products, wine, processed foods and pharmaceuticals, to processed metals, plastics, medical devices, cosmetics are lifted. A very strong point is also being made that a new mechanism for resolving non-tariff barriers to trade which have caused so many issues with the implementation of previous FTAs is part of the positive. That said, not all are happy and it is not necessary the raw material suppliers it is also those that realize there is a lack of the detail and effectiveness of this mechanism and all is yet to be tested.

Another concern is anti-dumping may be not be possible as the ChAFTA only uses the wording ” full access for Australian producers to trade remedies available under the WTO, including anti-dumping and countervailing measures.” Which like Australian Intellectual Property is often seen as an unnecessary barrier by Chinese firms. That said it is claimed China is moving towards more rigorous protection of IP as a natural progression. Some experienced people in this area may be saying – waiting – waiting – time will tell!

The positive also argue that while the service industry will no doubt benefit the Chinese market is good news for manufacturers as they will often be able to incorporate Australian manufactured products in their offerings.

Architects, for example can partner with local Australian suppliers to offer broader solutions to Chinese needs. Healthcare providers can similarly partner to tackle the China market. Other restrictions being relaxed on services will clear the way for Australian equipment and technology suppliers. The later point is claimed as a win for innovative technology and product suppliers.

One area of both opportunity and concern is the easing of restrictions on the use of imported Chinese labour. That labour source can undermine workers’ conditions and the competitiveness of firms operating under Australian law, so who wins? Comparative advantage is what the economists would argue would determine the winner.

While the positive argue it is all good. They also acknowledge there is no doubt China benefits greatly from this agreement and with that will come greater competition and threat to Australian business. It then means the Australian government must be more active in follow up on industry concerns as the details of the agreement are revealed and issues emerge. The difficulty in this is it is actually counter to the current government’s intention ‘of open for business’. It is even more difficult if you consider the need to collaborate outside of the cooperative of Australian Values.

So from all this comes the ‘real’ issue of not knowing about the mechanism proposed for addressing non-tariff barriers. Kindly provided is the following summaries to assist highlight what might be of concern. Not in any particular order:

  • Customs-related issues: – import tariffs, onerous customs procedures, including customs valuations, other import taxes and charges, rules of origin/certificates of origin, market access quotas
  • Technical issues – standards and certification: conformance testing and certification requirements
  • Other internal regulations issues – internal taxes, restrictive import licensing agreements, visa requirements and work permits, ownership and investment restrictions, banking and foreign exchange issues, governance and competition-related issues, differing processes for obtaining government approvals, transparency and fairness in tendering procedures for government contract and in the – award of tenders, ineffective enforcement of intellectual property rights
  • Social or market-related issues: staff recruitment, local business culture.

It is suspected that these barriers in China are extensive and complex.

In addition, it needs to be appreciated that arguably Australia’s largest barrier to trade, particularly in the services sector, is the very low level of mandarin speaking skills and understanding of Chinese Confucius-based business culture by Australians. Add to that the comparatively low level of ‘in country’ trade development support offered by the Australian Government and the need for Australians to invest considerable time and resources necessary to build up relationships before any deals can be concluded are also important factors.

We also seem to forget the high level of competition which Australians will face not only from European countries that have been far more active in Chinese markets in recent years, but also the very strong presence of mandarin speaking Taiwanese business interests who will be actively chasing service market opportunities.

Despite the current level of political rhetoric being generated about opening up ‘services-based’ markets in China, the reality is likely to be quite different. Only time will tell!

So was it so clever to have financial services hold the key to trade that is controlled by exchange. What is different for building trade over services is the key advantages of building trade around ‘hard products’ (commodities and manufactures) is that they are ‘language and culture’ neutral; if the price is right and the technical and other barriers can be addressed, market opportunities can be realised. Simply put the agenda is obvious and transparent.

As we see it the hurdle that many Australian companies within an exchange will be the need to learn and understand the soft diplomacy required in bedding down arrangements as the cultural context of business is different to that of the West.

A mixed blessing is probably the best description. A number of major concerns with this agreement:

  1. Firstly there is no mention of China needing to float it’s currency to achieve a more honest and realistic exchange rate.
  2. The agreement favours large-scale innovative makers and mining.
  3. Maintaining small to medium business input will be difficult.
  4. China is not required to place a carbon footprint on it’s export products, an economic advantage. In addition Australia does not require imports to place a carbon footprint on products. Should such a footprint be costed in real terms local manufacturing competes.
  5. China’s agreement with the USA may result in pollution issues being costed.
  6. We have heard no analysis of any imbedded uncompetitive clauses that may have a detrimental effect on Australian export business and local business alike.

Meanwhile back in NZ. After signing the NZ/China FTA Plinius Audio based in Christchurch NZ spent almost 5 years getting the CCC approval process to work for its products to enter China having been tested and proved compliant here.

Back to the now in Australia we are having our own ‘realities’ where according to our agribusiness contacts China is always going to control raw materials into China, it is a balancing act between feeding the people with Grain, clothing the people and exporting, and manipulating the price of commodities into China. Why? Because if they lose too much control, they cannot keep the rate of growth in the range where they have it. It follows that if China’s economy slows down it has huge implications not just for China, but for its main trading partners, of which Australia is a major one for Raw Materials.

Whether it is perceived or ‘real’ most feel the so-called free-trade agreements and other international contracts zap control from sovereign nations and hand it to rootless instrumentalities, undermining the role of governments.

It all culminates with: Planning, the timeframes that each culture believes plans should be projected forward and whether your side is proactive or reactive and when to be so inclined.

Relatively stable – but out of control – added costs

Your real energy costs are the networks. Interesting statement and arguably true. But is more gaming going on than meets the eye? The October 2014 energy bill arrives, and despite having negotiated a better energy price for your Victorian based small to medium sized business, you see you are paying more. Why you ask? You have a new energy price, no carbon price added, do not have solar, have reduced your load through energy efficiency measures as was encouraged and expected to be better off. The concerned business sent us their bill for analysis and what stood out.

From the Energy Retailer:

The unit price of energy had = reduced 33% – good.

The Retailers ‘other charges’ introduced new fees = increase 18% – bad

The Retailers LRET liability passed to you = increase 69% – bad

Therefore after paying a lower energy price and the Retailer contract exchanged, you find increased fees and passed to you their liability for the shortfall in their obligation on environmental charges.

From the government:

Relatively stable on state government imposts = good.

Therefore there are no new imposts from government – yet.

From the Networks:

Peak consumption charges = up 16% – bad

Off Peak consumption charges = up 7% – bad

The net effect on their total billing from the changes about 14% increases and that you can clearly see it is higher than inflation estimates. When you consider the business did expect a net reduction of 13% – it is another price shock they did not see coming – so much for cheaper electricity!

From an environmental perspective the good thing is the business reduced their carbon footprint about 8% through state government offered energy efficiency measures. At least they can have a conscience vote to please!

As has been said previously, the energy industry is the only industry in Australia that can avoid the contract terms as it suits. What is not helpful is the AER Determinations of late that introduce ‘may do’ As opposed to ‘must do’ in their wordings of onus for the industry. You could say there is a lot of water in that soup!

Prepare for unexpected climate events – but can we?

Reported is the driest ever on record and hottest ever recorded for the period, and OMG might be the response from agribusiness in those affected districts.

First look at these three stories:

South Australia and western Victoria head into drought after dry October

Catherine McAloon, Friday November 7, 2014 – 15:34 EDT

“The weather bureau’s latest drought statement shows severe rainfall deficiencies have developed in western Victoria and south-east South Australia.

South Australia recorded its driest October on record.

Australia-wide, it was the seventh driest October overall, but maximum temperatures across the country were the hottest ever recorded for the month.

Climatologist Lynette Bettio says rainfall from July to October in parts of western Victoria and southern South Australia was among the lowest ever for that period.

“”These are percentile rankings, so if you lined up all the July to October periods on record, starting at 1900, which is when we start our records, this July to October period, those areas covered by the rainfall deficiencies, which is much of western Victoria and southern parts of South Australia, would be in the bottom 10 per cent and the bottom 5 per cent,”” Dr Bettio said.

Richard Thornton, of the Bushfire and Natural Hazards Co-operative Research Centre, says the dry conditions could mean bushfires develop sooner than expected.”

Academic says climate extremes the major problem for farmers

Michael Condon, Friday November 7, 2014 – 15:27 EDT

“An academic says climate change will not be catastrophic for farmers, as they can manage any long term change.

Agricultural scientist Professor Richard Eckard, from the University of Melbourne, says extreme weather events like fire and flood do more damage to farmers and farming viability than the long term nature of any climate change.

“”That is where attention should be focussed,”” Prof Eckard said.

“”Because the real threats are dealing with the extreme weather events.

The attitudes are slowly changing to recognise that there is something changing in our weather.

I think a lot of the farming community might say that that is part of the natural cycle but regardless of whether or not you think it is a permanent change or a natural cycle, it does represent a change in what we see in the extremes.

A heatwave in November is one example of that.

Any gradual change we can adapt to over time, if is a gradual increase in temperature you can start breeding different animals or plants in that direction to deal with those changes.

It is really the unexpected extreme events that will catch us unawares that we need to be prepared for.

I am talking about the floods, the bushfires the extremes in temperature, in unusual times throughout the year,”” Professor Eckard said.”

Time to get serious about land use and emissions

By Stephen Bygrave on 10 November 2014

“Agricultural emissions in Australia could be responsible for over half of Australia’s total emissions. The land use sector has the most to lose, and the most to gain from climate change. Following discussion with farmers, it’s clear many of them are looking at ways they can stay on their land, and even make it more productive in the face of the changing climate.

There are those already revegetating their land, and experiencing the benefits of doing so. Others are looking to keep their topsoil, that otherwise blows all the way to Antarctica, with methods such as no-till farming.

Our research also found that just leaving native forests to recover could draw down more than 10 year’s worth of Australia’ total annual carbon pollution.

The recommendations in Land Use: Agriculture and Forestry are not radical – no more than the IPCC calling for global zero emissions is radical. They’re things that some are already doing, and that we must do if we’re to inhabit the planet into the future.

In fact one thing the fifth assessment report does very clearly is provide even stronger evidence that we’re already feeling the impacts of climate change. As if we needed it. We’ve already been in conversation with farmers who’ve been forced from their land, largely because of climate change. Farmers like John Pettigrew in the Goulburn Valley don’t bulldoze their 10,000 peach trees if there’s any hope of things improving.

We’re heading into a hotter, drier summer in a country where hotter, drier summers have become the norm.  In fact over 75 per cent of Queensland & northern NSW are approaching four years of drought now, and the western districts of Victoria look set to join them.

Even the National Farmers Federation, based on ABARES data, acknowledge that “without actions to adapt to a changing climate and to mitigate the effects of greenhouse gases, Australian production of wheat, beef, dairy and sugar could decline by up to 10 percent by 2030 and 19 percent by 2050.”

One of the pathways identified in our paper is to reduce livestock by 24% in the intensive zone and by 16% in the extensive zone. This matches the trend of Australians overall eating less meat, and allows farmers to take control of their production before the decisions are taken out of their hands.

This number is fully encompassed by the controversial live export trade – meeting this target would still allow for consumption of far more meat than is healthy for everyone in the country.”

Co2Land org asks: What does all this mean? We do not think it matters whether is it anthropogenic or not as the cause. However, we do care that what contributes to our wellbeing needs us to care. You see our markets need a healthy environment as much as carbon life forms do too. So even if we just assume people, and our activities are 50% responsible for the change in climate the measure still needs to be based on what if we don’t abate and what difference will that make.

Without complex modelling a significant number can still be indicative of what could be avoided. And, what must be avoided is the tipping point of climate change – the point not imaginable.

Digitally enhanced – ‘friends of’

Are you a moderniser or values driven? It is suggested it is a logical postulation that evades resolution, and is a true conundrum for the politic.

To illustrate, Douglas Carswell is authentically a modernizer and has quipped, in his book The End of Politics published in 2012, where he argued that “The digital revolution will do to grand planners in the West what the collapse of Communism did to socialist planners in the old Soviet bloc”. “Reform” in the 19th century meant increasing the franchise until it eventually included the entire adult population. In the 21st, it means “iDemocracy”, the crowd-sourcing of politics. We were asked where did you read this stuff? The Telegraph.co.uk, 29 Aug 2014, was the reply.

Thinking about this in a local setting – it occurred; The Independent senators have a handle on these problems and in particular how to save our country from being a dependant service industry – the advent of the exit of manufacture. In other words they are thinking on how to rally ‘Friends of Manufacturing’. The simple question is why is Australian politics having so much difficulty understanding the dependency issue and what then occur is causal of other uncalculated change too! History is full of such things that happen, and in particular that they were results of as opposed to outcomes of the change.

Change is always a difficult path and it is not as easy as engaging in old style reform. In a visit to the UK the tour guides constantly delivered the message that to save England from descending into moral decline they built churches that also served as an economic reform.

The difference today is renewal requires a different form of discipline – discipline to resist pandering your own ego. Why because eidetic recollections are called for, and you don’t have time to perform lengthy research for your answers, or just call on a higher ‘authority’ – how do you do that? Google or DuckDuckGo it of course, for the instant answers for the crowd.

It follows that the danger is you will selectively pick what suits ‘you’ and ‘your’ ideals and therefore cannot be empathetic and understanding of what is ‘the going concerns of real life’ – think of it as viewing life as a theme park. This simply means the view is an invitation to join the like minded and is sufficient to set change in the right direction. What examples let us think that this is a problem? The political scene in the UK illustrates the point very well, as reported by the Telegraph – being it “showed a weakness for the political equivalent of botox”. As a sense of humour must prevail – does that explain the goofy grin that seems printed on our PM’s face!

So is being a ‘friend of manufacturing’ the illustration of a present-day confrontation of social systems and civilizations and implies a confrontation exists between various systems of values. This implies the belief that as the creations are part of given social forces, each type of civilization embodies the values of the respective social forces.

Therefore what is needed for such a move to be successful is we distinguish between the sociological-politological and the axiological approach to values. You could argue the former disregards the intrinsic substance of value. The axiological approach is based on historical experience, on the social situation, on the interests and ideology determining the way in which a social group, a human community, a society ascertains values, non-values and anti-values. You could also argue, there is a correlation between these two approaches. We could say if you define political values as political relationships, institutions, organizations, views and ideas resulting from the transforming, creative sociopolitical practice of the social forces that meet the requirements of social progress and of the development of human personality on a social scale.

What this does emphasize is the special role of political values. Of course you then might say if you believe this you accept there is no place for the intrinsic character of political values.

That is not the case here, we believe to identify the issue, you need a group that can intrinsically recognize and then know where their mediating role in the creation-and, respectively, assimilation-of these values is needed. Therefore the ‘friends of’ person of today ‘experiences’ the values centered on political values. For all the differences between civilizations and their values, the common fundamental interests of mankind—the necessity of setting up a new economic and political order, of creating a new climate of peace and cooperation among states and peoples—require the assertion and promotion of common, general, and acknowledged political values. So ‘friends’ become political no matter what.

So what is the conundrum? It is the political values that interfere with real life experiences and that interferes with modernising. The question then becomes how do you prevent the hollowing out of your attempts to modernise? Then you develop your ‘friends’ and then along come the ‘rent seekers’ wanting to influence their interests.

If you then argue it is a matter of ‘friends’ being pro-market and not pro-business you will come across the issue of old fashion values and entrenched responses of we need more regulation. Then we have another issue – the policing of the regulator? How do you do that? By reverting to your values system you then effectively hollow out modernising.

What is the answer? Maybe we just postulate – change will occur, but what we must do is accept that where non-conforming activities are evident it is that anticipated remediation contingencies also need to be in place. What is this meaning? It is the place where conforming bodies are confronted by non-conforming bodies with pro-business friends. It is happenings and is akin to corrupting practices. You might say they will plan to achieve a competition to fail event. To be concluded over time as to whether the issue evades resolution!