October 7, 2024

Oslo Journal: Oslo Copes With Shortage of Garbage It Turns Into Energy

“I’d like to take some from the United States,” said Pal Mikkelsen, in his office at a huge plant on the edge of town that turns garbage into heat and electricity. “Sea transport is cheap.”

Oslo, a recycling-friendly place where roughly half the city and most of its schools are heated by burning garbage — household trash, industrial waste, even toxic and dangerous waste from hospitals and drug arrests — has a problem: it has literally run out of garbage to burn.

The problem is not unique to Oslo, a city of 1.4 million people. Across Northern Europe, where the practice of burning garbage to generate heat and electricity has exploded in recent decades, demand for trash far outstrips supply. “Northern Europe has a huge generating capacity,” said Mr. Mikkelsen, 50, a mechanical engineer who for the last year has been the managing director of Oslo’s waste-to-energy agency.

Yet the fastidious population of Northern Europe produces only about 150 million tons of waste a year, he said, far too little to supply incinerating plants that can handle more than 700 million tons. “And the Swedes continue to build” more plants, he said, a look of exasperation on his face, “as do Austria and Germany.”

Stockholm, to the east, has become such a competitor that it has even managed to persuade some Norwegian municipalities to deliver their waste there. By ship and by truck, countless tons of garbage make their way from regions that have an excess to others that have the capacity to burn it and produce energy.

“There’s a European waste market — it’s a commodity,” said Hege Rooth Olbergsveen, the senior adviser to Oslo’s waste recovery program. “It’s a growing market.”

Most people approve of the idea. “Yes, absolutely,” said Terje Worren, 36, a software consultant, who admitted to heating his house with oil and his water with electricity. “It utilizes waste in a good away.”

The English like it, too, though they are not big players in the garbage-for-energy industry. The Yorkshire-based company that handles garbage collection for cities like Leeds, in the north of England, now ships as much as 1,000 tons a month of garbage — or, since the bad stuff has been sorted out, “refuse-derived fuel” — to countries in Northern Europe, including Norway, according to Donna Cox, a Leeds city spokeswoman.

A British tax on landfill makes it cheaper to send it to places like Oslo. “It helps us in reducing the escalating costs of the landfill tax,” Ms. Cox wrote in an e-mail.

For some, it might seem bizarre that Oslo would resort to importing garbage to produce energy. Norway ranks among the world’s 10 largest exporters of oil and gas, and has abundant coal reserves and a network of more than 1,100 hydroelectric plants in its water-rich mountains. Yet Mr. Mikkelsen said garbage burning was “a game of renewable energy, to reduce the use of fossil fuels.”

Of course, other areas of Europe are producing abundant amounts of garbage, including southern Italy, where cities like Naples paid towns in Germany and the Netherlands to accept garbage, helping to defuse a Neapolitan garbage crisis. Yet though Oslo considered the Italian garbage, it preferred to stick with what it said was the cleaner and safer English waste. “It’s a sensitive question,” Mr. Mikkelsen said.

Garbage may be, well, garbage in some parts of the world, but in Oslo it is very high-tech. Households separate their garbage, putting food waste in green plastic bags, plastics in blue bags and glass elsewhere. The bags are handed out free at groceries and other stores.

Article source: http://www.nytimes.com/2013/04/30/world/europe/oslo-copes-with-shortage-of-garbage-it-turns-into-energy.html?partner=rss&emc=rss

Bucks Blog: Monday Reading: A Week at a Fat Camp for Grown-Ups

December 30

Friday Reading: Municipal Cutbacks Leave Residents in the Dark

A discount retail chain shuts down, manufacturing jobs return with lower wages, municipalities try to balance their budgets by shutting off streetlights and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=7da0ffd0a2c0991f8335b1113e3cab85

Bucks Blog: The Possible Unintended Consequences of Higher Taxes

Leslie Quick III, who described himself as a centrist Republican, said he and his new partner spent $2 million of their own money to start Massey Quick, a wealth manager and investment adviser — something they might not have done if tax rates were higher.Tom White for The New York TimesLeslie Quick III, who described himself as a centrist Republican, said he and his new partner spent $2 million of their own money to start Massey Quick, a wealth manager and investment adviser — something they might not have done if tax rates were higher.

Paul Sullivan writes in his Wealth Matters column this week about President Obama’s proposal to make Americans who make more than $1 million a year pay at least the same percentage of their earnings as middle-class earners.

The number of people affected by the proposal is quite small, Paul notes — about 60,000 people. But the plan has several unintended consequences for people who make far less than $1 million a year. Under the proposal, only taxpayers who pay an income tax rate of 28 percent of less would continue to get a tax exemption for the interest on municipal bonds. Now, all taxpayers can claim the exemption.

Limiting the exemption could raise the cost of borrowing for municipalities, and that cost would then be passed on to city and state taxpayers. And the change could limit the number of people interested in buying municipal bonds — at a time when the municipal bond market has been weak.

Have you bought municipal bonds in the past? Would a change in the tax laws affect your decision to buy them in the future?

Article source: http://feeds.nytimes.com/click.phdo?i=eedb297118ef544f962d96ce12ddbe7f

A Proposal for Drawing a Clearer Picture of Public Pension Finances

The suggested changes — which are voluntary rules — are an effort to straddle the gaping divide between public sector unions, their supporters and public pension consultants on one side and, on the other, economists who have criticized the official fund disclosures as misleading and fiscally unsound.

Among the recommendations to be proposed by the Government Accounting Standards Board is a new way to calculate today’s value of pensions that will be paid in the future, in response to complaints that the current method drastically understates what governments owe.

The rule makers would also bar actuarial techniques that some states and cities have been quietly using to make it look as if pension cuts for the workers they will hire in the future are already producing savings today. That would appear to affect states including Illinois, Rhode Island, Ohio, Texas and Arkansas.

A third change would require cities and towns that participate in big, state-run pension systems like the New York State Common Fund to report their share of the systems’ total obligations. Not all currently do so, making it impossible to trace such promises back to the municipalities that have to pay them.

The recommendations are efforts to forge a compromise between the sides in the hopes of getting states and cities to adopt the rules. But the proposals are likely to heighten the antagonism between interested parties with vehemently opposing views.

“We expect a lot of pushback,” said Robert H. Attmore, the chairman of the accounting standards board, in an interview.

Public pension policy has grown increasingly polarized as municipalities and state governments face mounting pension costs at the same time that overall state revenues have constricted in the aftermath of the 2008 recession. Workers, unions, government officials and consultants who work for public pension funds contend that a full-blown accounting overhaul is unnecessary, and they suspect hidden agendas. They view substantial changes as a way to weaken public employees’ unions and take benefits away, or as an opportunity for outside interests to get a crack at managing some of the billions held in pension trusts.

But economists and other proponents of significant changes argue that official pension numbers are fundamentally inaccurate. They warn that the current pension portrayals mask a looming fiscal breakdown as more and more public workers retire, threatening taxpayers whose own retirement plans have been shredded since 2008. Those taxpayers must still pay higher taxes to finance the pensions of public workers, some of whom can retire in their 50s, sometimes even in their 40s.

Rather than choose sides in the dispute, the rule makers have charted a third course, Mr. Attmore said.

“Nobody believes that it’s going to be exactly correct,” he said. “We’re trying to get as close as we can to what we think economic reality will be.”

The most closely watched issue for the board has been how to measure the value, in today’s dollars, of all the pension benefits that governments must pay in the future. The process involves the use of a rate, known as a discount rate, to convert between dollars in the future and dollars today.

For years, economists and other analysts have complained that the current accounting rules call for governments to use a rate that is much too high, greatly understating the cost of the benefits they have promised, and making unsustainable plans look viable. Since public pensions are protected by state laws and constitutions, they have urged the accounting board to require a rate like the one for safe investments like Treasury bills.

The other side responds that most public pension plans look viable because they really are viable. It has urged the accounting board to preserve the current method, in which governments use their expected rates of return on the assets in their pension funds.

The accounting board’s proposed solution would require governments to blend the two rates. Each government would be required to project all the pensions owed in the coming decades and all the investment returns it expects. By analyzing these cash-flow projections, governments would be able to see whether they were setting enough money aside, and if not, which year in the future they would run out, called the “cross-over point.”

Until now, analysts who have warned that some pension funds could run out of money and tried to estimate when have been accused of fear-mongering and using faulty assumptions. Mr. Attmore said the rule makers hoped to keep the projections honest by making governments explain how they calculated their cross-over points.

In addition, governments would have to provide a sensitivity analysis, showing how changes in their assumptions would affect their final numbers.

After projecting how many years their pension assets would last, each government would use that information to calculate its own discount rate. It would be a blend, combining the rate governments now use for the years up to the cross-over point, and a more punitive low-risk rate for the years after that. The low-risk rate would be based on an index of tax-exempt municipal bonds, Mr. Attmore said.

Governments would then spread the cost over the estimated working lives of their employees. If the portion that workers have already earned exceeds the fair value of the pension assets, the excess would go onto the government’s balance sheet. Benefits that workers expect to earn in the future would not be shown on the balance sheet, Mr. Attmore said. Currently, all pension disclosures are tucked away in footnotes.

This method might not satisfy critics, Mr. Attmore acknowledged, but it would shine a bright light on the public plans at greatest risk of running out of money, or those whose burdens would crowd out required government services. If adopted, the new rules would give governments an adjustment period, rather than demanding big, controversial changes overnight.

The Securities and Exchange Commission has been investigating certain states’ and cities’ pension numbers for possible fraud, but Mr. Attmore said he could not comment on the legal implications for governments whose current methods would not be allowed in the future.

Article source: http://feeds.nytimes.com/click.phdo?i=39fb977e028ddaed86de2ac79b77bdde

Bucks: The Impossible Public Pensions Choices

Last summer, I wrote about a brewing court battle in Colorado. At issue was the question of whether the state could reduce the annual cost-of-living adjustments for the pensions of state workers who were already retired.

I noted that the battle was the sort of thing we’d be seeing a lot more often as states and municipalities grew ever more reluctant to make taxpayers foot the bill for retirement benefits that now seemed outsize.

Well, this week the court in Colorado (and another one in Minnesota) found for the state and not the workers.

The workers will probably appeal, and we’ll probably spend years watching cases like these wind their way through the legal system. The battles will be fought in the legislatures, too. Already this year we’ve seen several states, including Wisconsin and New Jersey, demand more pension contributions from workers.

The big picture question, however, remains one that is more moral than economic. Decades ago, we made promises to government workers. Now, depending on your view, those promises have turned out to be too generous. Or they were based on funny math or absurd predictions of long-term stock market performance. Or they were undermined by the financial crisis, and it’s all the bankers’ fault.

Whatever your view, we now face a choice: Should all taxpayers (including the retired workers themselves) pay a lot more in taxes and accept large cuts in government services to pay for the promises to government employees? Or should we break the promises (by a little — or more than a little) because they have turned out to cost too much?

Article source: http://feeds.nytimes.com/click.phdo?i=7efcfb7900301156fdd8a0a69f60d2b6