The parliamentary commission on banking standards, set up by the Treasury in response to the Libor scandal, has said greater steps need to be taken in order to truly reform banks.
The commission, which published its first report today, outlined that it welcomes the government’s ringfencing plans – which would force banks to split up their retail and investment arms – but said that they “fall well short of what is required” in the long-term.
Chairman of the commission – Conservative MP Andrew Tyrie – said that the need for a tougher banking reform strategy had been evidenced by recent misdemeanours on the high street.
“Parliament took the unprecedented step of creating its own inquiry into banking standards, in the wake of the first revelations about the Libor scandal”, he said.
“The latest revelations of collusion, corruption and market-rigging beggar belief.
“It is the clearest illustration yet that a great deal more needs to be done to restore standards in banking.”
Barclays was the first bank to be fined for rigging the Libor rate – the rate at which London banks borrow from each other – and the subsequent investigation forced chief executive Bob Diamond and chairman Marcus Agius to resign from their posts.
Swiss bank USB has also received a hefty penalty for its role in the scandal while the Royal Bank of Scotland is expected to receive a fine of £350m – the largest to date in relation to the issue.
Tyrie added that while ringfencing would make the banking system “more secure”, banks would still find ways around the legislation. Therefore, the commission had put forward suggestions to “electrify” the ringfence.
“Over time, the ringfence will be tested and challenged by the banks. Politicians, too, could succumb to lobbying from banks and others, adding to pressure to put holes in the ringfence”, Tyrie said.
“For the ringfence to succeed, banks need to be discouraged from gaming the rules. All history tells us they will do this unless incentivised not to.
“That’s why we recommend electrification. The legislation needs to set out a reserve power for separation; the regulator needs to know he can use it.”
The parliamentary commission on banking standards was set up by George Osborne and asked to study the government’s draft financial services (banking reform) bill and make recommendations on the back of this.
The formation of the commission follows an independent investigation into banking reform by a group led by economist Sir John Vickers, whose subsequent report initially recommended the ringfencing concept.
But Vickers said that such changes would not be implemented until 2019 – and some commentators have criticised the speed at which important reforms will come in.
Speaking to Blue & Green Tomorrow earlier this year for The Guide to Sustainable Banking, Paul Ellis, chief executive of Ecology Building Society, said that the Vickers report goes neither far enough or fast enough in tabling a solution to the banking crisis.
“We met the publication of the report with some dismay when we realised how long it would take to enact some of the things discussed in it”, he said.
“And it doesn’t go far enough to tackle the fundamental problems in the system. It’s focused on protecting banks from contagion and causing the cost of that to come back to the taxpayer.
“That’s all well and good, but it doesn’t really address other aspects of problems in the banking system such as the overreliance on ratings agencies and so on.
“We’ve drifted into what is really a glorified form of gambling in many respects and that is reflected back in the practices, particularly in some of the US banks where products are deliberately being designed to inconvenience a customer. We need to bring that under control.
“The pace of regulatory change at the moment in that respect is very, very slow and that’s reflected in the attitude to the implementation of the Vickers report.”
Move Your Money, a campaign group that encourages people to move away from the big banks, said that the real answer to the crisis is for people to exit the high street in favour of alternative banks.
“Recent history has shown us that banks are willing to flagrantly flout the law in the pursuit of profit”, said chief executive Laura Willoughby.
“The commission has recognised that regulation is only part of the answer. Ultimately it’s up to customers to change the culture of banks by moving their money out of bad banks.
“It is the only way they will get the message and the only way to save the industry. Ordinary customers are on the frontline of the battle to save the reputation of British banking.”
With the help of Move Your Money, Blue & Green Tomorrow has compiled naughty and nice banking lists ahead of Christmas. Which side does your bank appear on?
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Will Self-Driving Cars Be Better for the Environment?
Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?
But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?
The Big Picture
The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.
That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.
One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.
There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.
As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.
Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.
Make and Model of Car
Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.
On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.
The Bottom Line
Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?
Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.
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