Under The Radar – 8 April

Source: Pierre Borthiry via Unsplash

This week we discuss:

1. Are you Corbyn in disguise?

2. Like it’s 1982

3. You can’t cancel the Costa Rican President

Are you Corbyn in disguise?

What happened?

As part of the newly unveiled energy security strategy, the government will bring part of the National Grid back into public ownership in order to help reach net zero targets.

What does it mean?

The National Grid will sell its utility arm, the Electricity System Operator, back to the government, in order to form a new public body – the Future System Operator.

This newly created body will have responsibility for planning and managing energy distribution, with a particular focus on the challenges and changes the grid will face as we move towards a decarbonised economy.

The announcement comes following significant worry from government and consumers alike over Britain’s preparedness to be both a net-zero and an energy independent nation. Sky-rocketing energy bills and a war in Ukraine that has highlighted our reliance on foreign nations for our energy needs has put energy firmly at the top of the government’s agenda. Bringing the National Grid back under the public remit could be seen as a sign of how seriously they are taking the task ahead, or potentially that there is panic over the scale of the task…

It has long been suggested that the National Grid was unprepared for the transition to low-carbon energy sources. Unlike gas and coal plants, which can be fired up when needed to meet additional demands, many of the energy sources the government now wants to prioritise do not come with this luxury. Nuclear power plants produce energy 24/7, no matter what the demand is, and renewables like wind and solar are as unpredictable as the weather.

How to plan and manage all of this, whilst still meeting growing electricity demands will be one of the biggest challenges the new Future System Operator will face.

Like it’s 1982

What happened?

Santiago Cafiero, the Argentine foreign minister, has criticised the UK for refusing to engage in dialogue over the future of the Falkland Islands.

What does it mean?

In a statement released on the 40th anniversary of the Argentine invasion of the islands in April 1982, the foreign minister has claimed that Argentinian-British relations will not improve if the UK does not engage in talks on the future sovereignty of the Falkland Islands.

Cafiero claims “the 1982 conflict did not alter the nature of the dispute between both countries, which is still pending negotiation and resolution.” The foreign minister reminded the British government that prior to the 1982 invasion there had been sixteen years of negotiation regarding the sovereignty of the islands.

The British government is yet to respond to Cafiero’s statement. The plebiscite conducted in 2013 which revealed that 99.8% of Falkland islanders wish to remain British forms the cornerstone of the British diplomatic position on the islands.

This is the second time in a month that the sovereignty of the Falkland Islands has been raised in international dialogue. In February, China released a statement declaring that Argentina should be able to “fully exercise its sovereignty over the [Falklands] Islands issue”, to which the Argentinian president Alberto Fernández responded with support to President Xi’s one-China policy, which claims Taiwan as a part of mainland China.

Set against the backdrop of the Russian invasion of Ukraine – in which Putin seeks to claim the independent state as a part of a wider Russian bloc – this dialogue is even more concerning. The West must remain united against the attack on Ukrainian sovereignty, as success for Putin could be interpreted as a green light for expansionist states the world over.

You can’t cancel the Costa Rican President

What happened?

Costa Rica has elected its new president, the right-wing economist Rodrigo Chaves. His aggressive style has seen him compared to former US president Donald Trump. What does it mean? Political stagnation has long existed in the country – perhaps a side-effect of the stability and relative prosperity Costa Rica has enjoyed, particularly when compared to some other countries in the region.

However, there are significant issues for the next president to tackle, with unemployment standing at 15% and the country’s lucrative ecotourism industry struggling to recover from the impact of the pandemic. The other candidate, José María Figueres, was a favourite for the presidency, having previously taken up the office between 1994 and 1998. However, his image has been tainted by a corruption scandal, which, coupled with the rise of anti-establishment politics and no real innovative message to offer to voters, has proven to be enough to sink his campaign. But Chaves’ image isn’t squeaky clean either. He has previously faced sexual harassment accusations during his time working for the World Bank, which eventually drove him out of the institution. Returning to Costa Rica in 2011, he later became finance minister under current president Carlos Alvarado Quesada. Chaves is now promising to rework a financial support deal with the IMF, while strengthening the economy, creating more jobs and focusing on healthy public finances. Whether his technocratic approach brings back the spirit of “Pura Vida” the country has long been famous for, remains to be seen.

This Week’s Must Reads

1. “The world-changing meaning of Putin” by Edward Luce for The Financial Times

2. “Akshata Murty’s non-dom status is totally legal – and perfectly toxic for Rishi Sunak” by Gaby Hinsliff for The Guardian

3. “Nicola Sturgeon’s secret state” by James Heale and Michael Simmons for The Spectator

4. “After the disaster of lockdown, children are being failed again” by James Kirkup for The Times

Chart of the Week

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Under The Radar – 1 April

Source: Pierre Borthiry via Unsplash

This week we discuss:

1. Biden’s ambitious tax plan to be torpedoed once again

2. Avocados fuel Mexican drug war

3. Bitcoin’s Green Opportunity

Biden’s ambitious tax plan to be torpedoed once again

What happened?

Joe Biden has unveiled plans to introduce a 20% tax on households worth more than $100 million. The new proposal will target ‘the top one-hundredth of the one percent’ and if passed, is estimated to bring $360 billion in revenue over the next decade.

What does it mean?

Biden’s plan to introduce the so-called ‘Billionaire Minimum Income Tax’ was revealed as part of his latest budget. Biden’s pitch to both his party and the public is to put an end to decades of tax avoidance by the wealthiest in America, claiming that it promoted ‘economic fairness’.

This is a populist move. Those at the top of the income ladder saw their wealth swell by $1 trillion during the pandemic and Biden’s proposal aims to correct this by taxing the value of assets – likes stocks and shares – before they are sold.

Biden’s pivot to the immense wealth inequalities that exist in the US may be with one eye on internal party politics ahead of 2024, as establishment Democrats begin to worry about a challenge from the left-wing of the party.

However, like his Build Back Better plan before Christmas, this legislation will likely be killed or seriously watered down by the right-wing in his party. Joe Manchin, the dissident senator for West Virginia, killed Build Back Better and has signalled that he will vote against the new tax too.

The failure to revive Biden’s domestic agenda may prove catastrophic for the Democrats at the upcoming midterm elections, which will no doubt lead to questions as to who the party’s nominee for President should be in 2024.

Avocados fuel Mexican drug war

What happened?

The popularity of avocados is adding fuel to the fire of Mexico’s cartel wars, sending the price of the fruit through the roof.

What does it mean?

The US government temporarily banned imports from the Mexican state of Michoacán, the largest source of avocados in Mexico, earlier this year due to threats made by gangs to an American safety inspector. Mexico produces 80% of the avocados consumed in the US, and while the UK imports from elsewhere, this contraction in supply will likely push prices up globally.

Sales of the fruit have boomed in recent years due to popularity among Western millennials, but this has had a knock-on effect in producer nations. In Mexico, drug cartels have a stranglehold on the nation’s economy at both a national and local level. The injection of money into Michoacán as its avocado exports have boomed has led to farmers taking up arms against violent attacks from gangsters.

The ban on imports from Michoacán into the US came just before the Superbowl, when sales tend to boom for the fruit due to its use in making guacamole. The ban has since been lifted but violence continues to escalate. Twenty people were killed in a gunfight earlier this week, marking one of the worst shootings in recent years.

The Mexican drug war has been ongoing for over fifteen years with estimates of 400,000 deaths because of gang violence. Unfortunately, its impact on the price of innocuous supermarket items like avocados is unlikely to lead to a rethink by the US and allies towards the war on drugs.

Bitcoin’s Green Opportunity

What happened?

A coordinated campaign, Change the Code Not the Climate, run by several environmental groups is calling for bitcoin to implement changes in the mining process that could dramatically reduce its energy consumption.

What does it mean?

Digital currencies, and Bitcoin particularly, have achieved levels of growth not thought imaginable just a few years ago. Over 106 million people use cryptocurrencies globally, and that number is only growing. In the UK, almost the same number of Brits own cryptocurrencies than the number that have a Stocks and Shares ISA.

However, the crypto craze has brought with it an awakening to the huge amount of energy that the mining of these coins require.

Currently, Bitcoin uses more energy than all of Sweden, and if the crypto currency becomes widely adopted, the mining process alone could produce enough carbon dioxide emissions to warm the planet more than two degrees celsius. Whilst the world has made much progress in cutting out fossil fuels, Bitcoin miners are seeking to buy oil and coal plants consigned to disuse in order to fuel their operations.

With the problem only set to increase, a campaign called Change the Code Not the Climate has set about trying to encourage the industry to find ways to reduce its carbon footprint.

And a rival crypto currency, Ethereum, may have found a solution. The digital currency is shifting to a different coding system that it believes will reduce its energy consumption by over 99%.

But the campaign is coming up against obstacles. Bitcoin stakeholders are incentivized to resist change because of the value of the existing infrastructure.

With the UK set to reveal new crypto regulations in the coming weeks, it is undoubtedly the start of a new era for digital currencies. It may not be long until environmental laws come into play.

This Week’s Must Reads

1. “The Times view on finding allies against Moscow: Taking Sides” in The Times

2. “Meet the ‘crypto caucus’: the US lawmakers defending digital coins” by Kiran Stacey for The Financial Times

3. “The Western mind no longer understands Putin” by John Gray for The New Statesman

4. “Europe will be safer if Belarus is free” Sviatlana Tsikhanouskaya for The Economist

Chart of the Week

Source: The Economist

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Digital Digest – 31 March

1. 
   

In this week’s Digital Digest we take a look at Britain’s digital start-up boom and government plans for a solar power station in space.

We then take a look at big tech as Apple makes history at the Oscars and Google’s Deepmind is accused of mishandling sexual misconduct allegations.

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Closer To Home

British digital start-ups ‘are worth $1 trillion’

Digital Minister Chris Philp has revealed that Britain is now the third largest tech hub in the world, behind the US and China, as new figures show the UK’s digital technology start-up sector is worth more than $1 trillion. 

Britain is creating unicorns (a start-up worth more than $1bn) and decacorns (a start-up worth more than $10bn) at double the rate of Germany and five times the rate of France. The majority of these startups are located in the South of England, and particularly London. The UK government will be keen to see this boom in tech innovation expand to other regions, especially in the Red Wall. 

Philp suggested that the pandemic facilitated a wave of technology adoption from a variety of previously unintegrated sectors such as health and education. This spawned 13 decacorns and another 14 start-ups valued between $5 billion and $10 billion. Britain’s decacorns include fintechs like Revolut and Markit. 

Whitehall explores solar power stations in space

The Business Secretary, Kwasi Kwarteng, has ordered civil servants to begin researching ‘orbiting space solar farms’ as he searches for long term, climate friendly solutions to Britain’s energy security crisis. It is argued that solar space farms could provide renewable, round-the-clock energy that is then beamed wirelessly to earth and fed into the electricity grid.

A government report last year stated that a giant grid system to be assembled in space could provide the same amount of power as a nuclear plant, and that space-based solar could provide a quarter of the country’s electricity needs. The project would likely be an international endeavour.

The solar farm would be a 1,700m tall structure, constructed in space by robots who would be launched into space along with the thousands of pieces required. It would then relay the power using high-frequency radio waves to a giant net on Earth.

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Big Tech

Apple pips Netflix to the punch

While Will Smith may be grabbing the post-Oscar night headlines, Apple TV+ became the first streaming service to nab the award show’s most coveted prize. CODA, a coming of age drama about a deaf family, won best picture.

The award has evaded Netflix for years despite concerted efforts from the streaming giant, with Oscar-bait films such as The Irishman, Roma, and this year’s The Power of the Dog failing to take the big prize. Netflix’s head of global film, Scott Stuber, was quoted last week saying that a best picture win for the streaming giant would be “the dream”.

Apple’s win is a historic moment for the entertainment industry. The best picture award has long been touted as the benchmark to legitimise, once and for all, the disruptive force of streaming. Whilst this has been inevitable for some time, Apple was never thought to be the first to make the breakthrough.

DeepMind accused of mishandling sexual misconduct allegations

Deepmind, one of the most prominent Artificial Intelligence companies in the world, has been accused of mishandling multiple sexual misconduct and harassment allegations by a former employee. Deepmind employs more than one thousand people, including world renowned scientists, and has made a series of significant breakthroughs in AI since being acquired by Google for £400m in 2014. 

The company has claimed that the allegations were thoroughly investigated and the perpetrator was dismissed. However, Julia, the victim of the misconduct and harassment, wrote a letter to her former colleagues arguing that there are significant flaws in how allegations are handled at the company; this includes delays in investigations and a lack of safeguarding for victims. 

Following the complaints, Deepmind has stressed that it has made changes to its workplace policies, including how it investigates such allegations and how it trains its managers. Deepmind’s parent company, Google, was also forced into a $310m settlement in 2020 for similar allegations of mishandling employee complaints.

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Also In The News

1. Social media may affect girls’ mental health earlier than boys’, research from the University of Cambridge has found. See here.

2. Apple is considering launching pay-as-you-go iPhones in a monthly subscription scheme that could be launched this year. See here.

3. Usain Bolt has taken a stake in Irish esports group Wylde who field esports teams in video game tournaments for games including Rocket League and Fifa. See here.

4. Ofcom has found that TikTok is being used by 16% of British toddlers and a third of children aged between five and seven. See here.

5. Dyson launches a bizarre air-purifying mask that protects owners from pollution and doubles as a pair of headphones. See here.

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Worth A Read

1. Wired: Forcing WhatsApp and iMessage to Work Together Is Doomed to Fail

2. Daily Telegraph: Why Russia’s cyber apocalypse has failed to materialise

3. Financial Times: Russian tech giant Yandex’s data harvesting raises security concerns

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