moneyblog

Food Miles are stupid - Carbon Pricing is smart

We've heard all about English newspapers going on about food miles. Here's an example. My colleague, Tim Arrowsmith, was recently in Britain and the jargon of environmentalism is the new regligion - and often it has similar consequences: observance is often in forms rather than in spirit.

Like recent exhortations that included not buying NZ wine. These have been identified as a threat to many of our exporters - and they are. They are also a threat to the environment, because the concept of food miles is dim. I am not against including an idea of the carbon impact of a product. But dumbing this down to food miles doesn't help.

One shipload of kiwi goods will usually involve much less carbon expenditure than 10,000 people driving an extra 5 miles in their cars to buy local food at a farmer's market.

This fact has been spotted by the carbon trust - their work is profiled in this article.But even their 'carbon footprint' labels will not help much.

They give the charming example of potatoes - yes, local involves less carbon - but if you boil them forgetting to put a lid on the pot your potatoes may as well have come from Timbucktoo.

The more we look at the overly simplistic concept of food miles the more it looks like protectionism in drag. The best way to get consumers to consider carbon in the purchasing decisions is to price carbon, and it'll end up in the price. Then they don't even have to read the label - their wallets will make them carbon saints.

Space Race!

Just read a fantastic feature in WIRED - easily the coolest magazine I can think of off-hand, all about the Space Race. All the action is in the private sector - fuelled by a cocktail of excitement, philanthropy, and greed - they are doing the interesting stuff.

On the other hand NASA is described as "Big, Dumb, and Slow" - which would be hard to disagree with given their obsession with a moon base with dubious scientific outcomes.

"NASA can place objects on the moon at a cost of $26,000 a pound. At that price, each bottle of water a crew member uncaps will cost the taxpayer $13,000. Even if the new moon rocket being designed by NASA custs that cost in half, as agency insiders hope, that's still $6,500 for one Aquafina (astronauts and moonbases extra)... A private company facing such numbers would conclude that a moonbase is an absurd project... and would put its capital into new propulsion technologies."

Along with a clutch of new planets - see the Herald - 26 of them discovered in recent months, well - the stuff of science fiction is being manufactured as we speak. With the unlimited resources of the universe humanity could do almost anything...

Budget Opens the Floodgates

Apparently since the budget there has been a flood of investment managers working fast to put together KiwiSaver products. One manager I spoke to this morning said "every man and his dog" are at it now.

Property Advisers Unhappy with Google

Apparently a number of advisers offering property advice - and other forms of financial advice too - are unhappy because if you search for them using google, Richmastery comes up in the sponsored links column. Link. I've got a JPG of the search results so you can judge for yourself if the association is confusing...

Probably not, I'd say.

The Glory of Cricket

While the Windies are folding to England, and the rain has come bucketing down (the last hope for the Windies) Cricket commentary - even online continues in its finest tradition - click below to read the wonderful rain affected commentary from Cricinfo. I hope they will forgive me if I plug them - I've reproduced it because there is no facility to link to it - as it's dynamic content.

Weatherston's Five

Recently Murray Weatherston outlined the five messages from the MED:

• There will be more than one approved professional body (APB)
• Legislation will catch all those who are deemed to give financial advice - ie - the tiered adviser approach has been discarded
• The definition of financial advice will not be tied solely to product
• Individual businesses should not be APBs
• A single disputes resolution process is favoured - however, the government has not decided on this yet.

Let's take them one by one.

1. Well, der! Some people have been living with the fantasy of "one APB" but it was only ever "One" if you forgot to count the NZX, the NZMBA, and a clutch of other declared candidates.
2. The legislation has always been drafted to catch all advisers - its the level of disclosure and supervision that was proposed to vary. I think the MED is moving closer to the industry position - but daylight is still visible between the two.
3. It never was as far as I could see, and care is being taken to ensure that there aren't 'product silos' in registration either.
4. Good to reiterate this point. Some businesses still think they can be their own APB.
5. Murray is joined by others in picking up on disputes resolution issues. A new common 'desk', better inter-agency co-operation, consumer awareness, and more funds for disputes all look likely.

Far from the heat and light of APBs companies and advisers alike may find that the greatest demands on them post-compliance come from newly empowered consumers making lots and lots of complaints - and being helped to do so.

ANZ/National Considers Equity Release Loans

Stuff reports that ANZ/ National are looking at the market. Link. Sentinel would probably be happier than you might think for someone to do so, as it would probably help to lift the profile and growth of the market to another level.

Updated New Mortgage Insurance

Sovereign has updated its venerable Freehold - it still has the best name of any mortgage insurance plan, originally developed by Charlotte Orr, at Metropolitan Life. The list of enhancements make it very strong:

• Addition of Redundancy Benefit
• Addition of Total Permanent Disablement Benefit
• Cover for up to 110% of the mortgage principal to a maximum of $1,000,000
• The Disability Income Protection Benefit is re-named Loan Instalment Repayment  Benefit
• Addition of  8 and 13 week waiting periods for Loan Instalment Repayment Benefit
• For joint life covers, if the first life dies, the second life will continue to be covered
• Ability to link policies with TotalCare – allowing your customers to have only 1 policy fee.

Obesity

Because we are one of the few industries which actually discriminates legally on the basis of obesity its nice to keep in touch with what's going on around this subject. Reading Muriel Newman's column I saw this:

In April 2003, the former Minister of Health Dr Michael Bassett wrote a column about the ‘Fight the Obesity Epidemic’ group. He thought that the spokeswoman “was giving vent to more foolishness than I've seen concentrated in one document for years”.

He went on to say: “She wants legislation to cover the content and placement of food advertisements, and authority to ban those she doesn't approve; she wants power to regulate food sold at schools: 'what the heck are we doing selling soft drinks, fruit drinks, chips and pies, sweets and chocolates in schools?' she asks rhetorically. Her list of smart solutions to the obesity epidemic? Taxing video and computer games because of their association with sedentary activity; removing Government support from television; promoting exercise by exempting bicycle sales from GST; extending daylight saving to allow more time for physical activity."  

Hmmm... hands up who thinks this is really going to fix obesity? Anyone pricing for the dramatic reduction in collective weight these excellent policies will bring about?

John Armstrong KiwiSaver Article

This article highlights the medium to long-term hazards of KiwiSaver - for future governments - painting a more reasoned picture of the perceived public policy advantages and risks associated with KiwiSaver than the link to the Matt McCarten article I gave you earlier. However, unlike John I would not interpret a lack of objection in the polls to a positive endorsement by the electorate. Super policy is too complicated for large numbers of people to have quickly formed a view.

Link,