The goose that laid the golden egg is looking decidedly vulnerable as the Vodafones of this world try to
The goose that laid the golden egg is looking decidedly vulnerable, as the Vodafones of this world try to reclaim control of the marketplace.Climate change: not such a costly problemUnless something is done soon, we are all doomed, or at least our children are. That message was being hammered home again yesterday by Friends of the Earth, whose latest research finds that never mind the social and environmental costs of failure to address climate change, the economic cost may run to trillions of pounds. The report paints an apocalyptic view of what might happen if global warming is left unchecked.At two degrees centigrade above pre-industrial levels, there will be decreased crop yields in the developing world, widespread drought and water shortages, a near total loss of coral reefs, and the extinction of the polar bear. Property and mining stocks were the key drivers in London – British Land added 27p to 1,432p, with Land Securities up 22p to close at 2,030p. The word among traders is that it will be the French bank Soci? G?rale, but traders were also backing Barclays, 12.5p better at 722p, a new high, and Lloyds TSB, 4.5p firmer at 559p.In the wider market, strong earnings figures from several US stocks, including McDonald’s and Costco, sent the Dow Jones sharply higher, helping the FTSE100 to climb 47.8 by the close to 6121.3.
Fewer than 15 per cent of Vodafone’s independently sold contracts are through Carphone, which is a big chunk of business to lose, but hardly the end of the world.All the same, to claim, as Carphone did, that the initiative will be far more damaging in the long term to Vodafone than to Carphone because the public will recognise that the company has opted for force-feeding of sales rather than competing for them, is just a little bit spurious.The big danger for Carphone is not so much the direct loss of business involved, which no doubt can be compensated for by higher sales of rival networks, but that others will follow Vodafone’s lead. Emerging markets are the fashion of the moment, but they will not always be so.j.warner independent.co.uk. The uniting characteristic is the remuneration structure – typically a 2 per cent management charge, 20 per cent of any upside, but none of the downside.Traditional long fund managers who bought into yesterday’s offer must be wondering why they cannot get away with charging like that It’s called being in the right place at the right time. The truth of the matter is that although some still dislike being referred to as hedge fund managers, the term these days covers a multitude of sins.
In fact, says Mark Coombs, its managing director and the chief beneficiary of yesterday’s share placing, it is a manager of emerging market assets.The fact that many of its clients think of it as a hedge fund, that it remunerates itself on the same performance-related basis as most hedge funds, and that many of those who are buying shares in the company think of it as a hedge fund, should not apparently mislead us into thinking that it is in fact a hedge fund.So now we know. Yet it is surely better that too much capital is invested in bringing climate change to heel than too little.Ashmore: don’t call us a hedge fundI’m instructed not to refer to Ashmore Group, which floated yesterday with a stock market value of £1.2bn, as a hedge fund manager. Climate change is already big business, and as you might expect with any new sector, there is also already evidence of a bubble building around its investment opportunities. If insurance is inexpensive, most of us regard it as a small price to pay against the unlikely prospect of calamity. We’ll only know for sure if we spend nothing and see what happens. What we can be sure of is that the economic, environmental and social cost of climate change rises exponentially with each one degree of warming.Spending on curtailment therefore has to be seen as a form of insurance. Spending heavily to reduce emissions might be a complete waste of money.
We know that climate change is man-made, but we don’t really know how far it might accelerate if we do nothing about it In this sense, it is a bit like the millennium bug. In 2003, the Department of Trade and Industry put the cost of a 60 per cent reduction in UK emissions by 2050 as between 0.3 and 2 per cent of GDP.Most modelling since is in broad agreement that there is a read across in these estimates to the world economy as a whole. Significantly reducing emissions from present levels will require some curtailment of economic growth, but not much, even in China and India.The trouble with global warming is that the science is still fuzzy. At four degrees, melting polar icecaps would put vast tracts of land under water, and equally vast areas of the world will become incapable of agricultural production At more than four degrees.. well, you get the picture.So far, so dire. The good news is that virtually all respectable estimates of the costs of fixing the problem are relatively small.
At three degrees, there will be increased disease, widespread species extinction, increased desertification, and a wholesale collapse of the Amazonian and Alpine ecosystems. This, after all, is the model used in some parts of Europe and the US, where exclusive deals with independents are common.Carphone might be able to weather the loss of one of the big operators, but its whole business model as an independent supermarket for mobile telephony would be seriously undermined by the loss of two.Fortunately for Carphone, there are few other independents after Carphone and Phones 4U that other networks can turn to for exclusive deals These two are far and away the largest independents. As if on cue, Orange last night confirmed that it was considering its options on indirect sales. Bought second-hand, it was a model favoured by many amateur aviators, not least because of its fancy finish and high-end safety features, notably a parachute that can be deployed by pulling a red-lever in the cockpit’s ceiling in the event the single engine loses power. Built on a steep hill, now in the centre of Rome but in the 16th century still semi-suburban, it was originally meant to emulate the thundering classicism of Michelangelo’s Palazzo Farnese but in development it became a unique hybrid of city palace and grand rural villa, with a spectacular garden behind.The army takeover of the palazzo began innocuously enough with the renting of part of it from its needy aristocratic owners in 1934. Visitors taking in the museum’s masterpieces by Raphael, Tintoretto, Caravaggio and the rest are frequently distracted by the smells of frying fish that drift in from the kitchens when an officers’ banquet is being prepared, or by cries of “Viva gli sposi!” (“Long live the newlyweds!”) as a wedding party gets under way.Although the soldiers have paid no rent since 1965, they let out their premises to other organisations for parties. A couple of years ago Bob Geldof and the Yorkshire poet Tony Harrison addressed a large banquet in the Officers’ Club celebrating the centenary of Rome’s Keats Shelley Museum.The agreement to move out is another feather in the cap for the Italian Culture Minister, Francesco Rutelli, who presided over the return last month of 13 antiquities looted from archaeological sites in Italy and sold by middlemen to the Boston Museum of Fine Arts.