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The success of the 9 euro rail pass introduced in Germany in increasing rail use and reducing pollution and congestion on highways is described here in The Guardian. For 9 euros one could travel throughout Germany on Deutsche Bahn rail network for one month in June, July or August.  Less traffic congestion and better driving times in 23 of 26 cities in Germany, and a jump in short journeys by rail between 30 kms and 100 kms, and between 100 and 300 kms, are shown here for Germany.

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According to a report from China's Environment Ministry for the first half of 2013, only 4 cities met the acceptable air quality standards. The national grade 2 standard in China is for 35 micrograms per cubic meter for levels of airborne particulate matter smaller than 2.5 micrograms in diameter. WHO standard is for 25 micrograms per cubic meter in a 24 hour period. The 4 cities with acceptable air qualty out of 74 cities monitored by the Environment Ministry are Lhasa in Tibet, island city Haikou, coastal town Zhoushan, and Pearl River Delta city of Huizhou.

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The South China Morning Post provides this view of China on the day of the 70th anniversary of the Communist Party of China, on the long road from the founding of the government in 1949 under Mao, the Cultural Revolution, and the shift to a state sponsored market economy under premier Deng in the 1980's.  From being at early stages of industrialization to a fully developed modern and industrialized country over three decades.  The challenges China faces are whether its growth will slow with a high debt situation, trade war with the U.S., aging population and the housing bubble that has created problems in Hong Kong. This could lead to a situation where its per capita income stays in the middle range at around $12,000 per capita, referred to as a middle income economy by the World Bank. Some experts believe that the factors that propelled China since 1990- a youthful labor force, globalization reducing tariffs and benefitting from entry into WTO, easy access to western technology, land sales for local governments to finance industrial development, rapid urbanization, and infrastructure investment in electricity rail and highways, are now reaching their limits with smaller incremental steps and growth in the future. The big gains made in the last three decades could be limited by other factors also such as the high debt economy, build up of industrial overcapacity, limited domestic consumption to take the place of exports facing high tariffs. Countries normally face some slowdown in such situation after a period of rapid growth, Japan and South Korea being recent examples. During the transition period to a new kind of economy from the manufacturing export push Asian model many unseen social and other problems emerge. The situation in Hong Kong shows how the housing bubble can also lead to problems that require resources and attention.  There are other social problems that continue to remain hidden. It does not take long for hidden problems to emerge as the situation in Brazil for lack of sanitation and epidemic prevention shows. In China the cost of too rapid development has led to pollution of rivers and land that will need to be cleaned up. The effect of contamination of food supply is an ever present risk with the contamination of land and water. Little attention is paid to prevalence of smoking and its damaging effects on health. The one child policy also brings with it cultural issues of how a whole new generation of children without siblings. Many other social problems that affect the quality of life become evident as growth slows and addressing these problems can actually benefit the country and its people. ...

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This briefing in the Economist says China now faces a difficult transition to its next phase of development, in which the government is trying to change the model used by Deng Xiaoping of export led development to a consumption based economy. That model produced spectacular results between 2000 and 2015 when the middle class went up from 5% of the population to 25% of the population, as measured by people living on more than $20 a day in 2011 $ purchasing parity, as reported by IMF, EIU. The problem China faces is can this development stall if it fails to tackle problems in the next phase, with an aspiring group behind the new middle class left behind. Recent jump in the stock markets volatility, devaluing of the currency, and confusing signals sent by the government have hurt its credibility. Demographic issues with an aging population, the destruction of the environment with rampant development, and how to manage this next phase of development with respect for the constitution and the rule of law replacing the high corruption levels, are serious challenges. Experts say it will be difficult to manage a transition to the next phase of development without some degree of democratization. The rise of the internet and the social media have created more avenues for expression, which gives the government some guage of public opinion, especially in tackling pollution, mismanagement, and other problems. The government sees the need to manage things carefully, with rising unemployment posing a problem as growth slows and the government closes down inefficient manufacturing facilities. ...

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This editorial in the Economist points to the long term effects of a crash in China's stock markets. This would reduce access to equity markets for corporate funding. It would pose larger risks because of the increase in total debt in the Chinese economy from 150% in 2008 to more than 250% in 2015. The fallout would not be as large as in the U.S. after a stock market bubble collapsed in the U.S., because market capitalization is about 40% of GDP, and households have put about 10% of their wealth in stock markets. Coming at a time when China's economy is slowing, and it faces other problems such as addressing pollution, healthcare and other issues, this could lead to a further slowdown for a prolonged period. Most economists from Krugman to Summers, say China is no exception to basic rules of finance and economics. The indexes have accelerated in the past year- CSI300 index of China's largest mainland stocks doubling in the past year, and ChiNext market for startups tripling in the past year, and at P/E ratio of 140 times prior year earnings. 4 million new brokerage accounts opened in one week of April 2015, and a study shows about 66% of people buying stocks for the first time have no schooling beyond the age of 15. Margin financing has increased to 2 trillion yuan or $325 billion. Clearly unlike the U.S. investors and stock market authorites have not experienced the collapse of a bubble with all the economic distress for a prolonged period....

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Alan Blinder talks about the benefits of alarge cash for clunkers program and how it could be designed around what parameters and upon which it could be broadened or narrowed. One thing he points out is that it would help the economically challenged, though how these low income people would go out and buy new cars in the midst of deep recession and credit card bills, and other debt, is a question. The German customers were not in the debt situation many lower income Americans are. The alternative approach would be to broaden the program to give the middle class the benefits, and design it around giving a boost to the depressed auto industry and the midwest region. Such a program would need adequate financing like the $20 billion, Blinder says, and would include the possibility of turning in an old clunker for a Malibu or Impala or a Focus. Only focussing on small cars would not give much of a boost to Detroit car makers, which are focussed more on the middle and larger ends of the product line. From the cleaner environment perspective and carbon emissions perspective, the cars that are 13 years or older account for 25% of the miles driven, but 75% of the pollution from cars. This and reducing dependence on foreign oil suggest that the benefits of a well designed program or a combination of programs targeting different goals such as environment, boosting the Detroit car makers, and so on , could be well worth an investment of more than the $20 billion, Blinder suggests. ...

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The International Energy Agency says in areport that China's policy shift to develop green energy projects will reduce global greenhouse emissions by 2020. Lower economic growth worldwide and thefaster development of green energy will reduce the emissions by 5% by 2020. Instead of recent growth in emissions the lower economic growth will lower greenhous emissions by 3% this year.

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Smaller companies are being squeezed by rapidly escalating costs as costs are going up as fast as oil prices, and face tighter emissions rules in Alberta's oil sands projects. Some projects now cost 2 to 3 times the original projections and there is a severe labor shortage. Even the big players will find it difficult and expensive. To meet the stringent emissions rules, as Prime Minister Harper signs on to new international greenhouse emissions targets, Shell may have to use a technology that captures CO2 from the plants that process the oil sands and store the gas underground. This costs $120 a ton, and would cost Shell upwards of $2 billion a year just to capture and store the CO2, for the 15-20 million tons of CO2 that would be emitted when it increases production to 770,000 barrels a day. The cleanup from oil sands processing is costly because processing is very pollution intensive. Production of one barrel from these oil sands is 3 times more polluting than producing conventional oil. Synenco Energy, which had a project in partnership with China's Sinopec for mining and processing the oil sands called Northern Lights for $10.8 billion, called off the project last year because of all these hurdles, slashed its work force, and decided it may sell the company. Currently 1.1 million barrels a day come from the Alberta oil sands. 2020 output was expected to rise to 4.3 million barrels a day. But now this looks too optimistic. CAPP forecests 3.8 million barrels a day, but even this may be on the high side. ...

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The action taken by local and government officials to address the high PM 2.5 pollutant levels and smog in Harbin, China, in October 2013. For the first time the Ministry of Environmental Protection has powers to take serious action. It is sending out inspection teams to cities across China for the winter to make sure environmental regulations are enforced. One big change is that cities now report in real time the change in pollutant levels for PM 2.5, the worst pollutant. By Oct. 2013 113 cities in China carried the live reports on websites. The Ministry has published a list of the 4189 factories in China that create 65% of total industrial air pollutants in China. The Jinping-Li Keqiang administration supports the stronger enforcement and has set a goal of reducing PM 2.5 levels by 15- 25% each year for Tianjin, Beijin and Hebi province in northern China, compared to 2012 levels. These three regions have been given the target of reducing coal use by 80 million tons a year.

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Tom Friedman explains why Applied Materials is one of the largest solar panel manufacturers in the world but makes its panels in 5 factories in Germany, four in China and one each in India, Taiwan and Italy. With no factory in the USA. And all 14 factories put up in the last 2 years, put up overseas. Applied Materials is opening its largest worldwide research facility in Xian, China, in October 2009. Applied develops the knowhow for solar energy at its research facilities for manufacturing technology. These solar panel factories says Applied CEO Splinter go for about $200 million each. Solar panels technology can vary from thin film coated onto glass with nanotechnology using crystalline silicon, to other technologies. Germany is at the forefront of the world solar energy industry. It is the second largest industry in Germany employing some 50,000 people. China is putting a new emphasis on pollution free energy. What Germany has done says Friedman after visiting Applied Materials research facilities, is to allow any business or homeowner to generate solar energy, and if they decide have the power utility to connect them to the grid as well as buy the solar power at apric and duration attractive to the homeowner or business user. Something the USA has still to do. As a result solar energy consumption in the USA lags way behind these countries. Applied Materials largest USA customer is a German owned company in Oregon says Applied CEO Splinter. Splinter points to the fact that solar energy is becoming an important industry, similiar to the way the auto industry assumed importance. For Applied Materials this means revenues of $1.3 billion in the last 12 months, according to Splinter. ...

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Questions about whether the emerging market countries are looking ahead at a period of lower growth in the next decade. If the slowdown in 2013 is structural then these countries have to to make changes in economic policies that will help them return to higher rates of growth. If the slowdown is cyclical then this is temporary and emerging market countries will return to higher growth rates. Countries such as Brazil, Mexico and India need to improve infrastructure and educational systems, and invest in research and development to generate more growth. Turkey and India depend on foreign capital, which puts limits to growth, creating a need to boost domestic savings and investment for long term growth. Lower rate of about 7% compared to the 9-10% of the last decade in China are because the wave of investment in construction and infrastructure building through huge state investments is now slowing, says Peter Aslund of the Peterson Institute of International Economics. It is a positive prospect for China, according to Kalpana Kochhar, a deputy director of IMF, because of the asset bubbles developing in real estate. It is seen positively by China's new government as it tackles problems created by a rush to industrialization of widespread pollution of the environment, and lack of balanced development without attention paid to healthcare, worker wages and social security. Stephen Schwartz of BBVA bank, says urbanizaton will drive further gains, especially in India, which has lagged behind the gains made in China and is likely to follow the rapid urbanization seen in China. New elections in India in 2014 are likely to lead to more growth oriented government policies. A pause in the U.S. Federal Reserve's policy of withdrawing economic stimulus gives emerging markets, especially India, and opportunity to come up with new economic policies to restore growth....

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Building extensive subway systems in large cities is the next focus for China's infrastructure building effort. China's prime minister, Li Keqiang supports "new urbanization, with people at the center." Building convenient mass transit for cities with subways and light rail is seen as a way to improve living in urban environments. Other related priorities are water supply, garbage disposal and more sidewalks. Subway lines reaching further into the fringes of cities helps push population out further and lead to less overcrowding and pressures on limited space in core areas of cities This also takes pressure off increasing automobile use inside the centre of cities, reduces overall automobile use in urban areas, and frees up money for consumers to spend on products other than automobiles. This fits in with the plan to urbanize China, by taking pressure off property prices, reducing air pollution from automobile use, and improving quality of life. It is also seen as a way to stimulate economic activity in the fringe areas as subways extend further to outlying urban areas. An example is the $300 million three station line to Kunshan, an extension above ground to Shanghai's subway, which is expected to connect with a line to Suzhou. China's cities have spent about 22% of the total debt of $1.76 trillion in 2010 on transportation infrastructure, according to national audit. The subway and light rail effort is taking place in 26 cities with new or expanding lines, according to the Transportation Technology Development and Planning Research Center. Subways charge much less in China compared to New York- 2 yuan or 30 cents compared to $2.50 base fare in New York city, and will need local government and state subsidies. ...

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Mr Tata in an interview said that the new small car from Tata will be able to meet current and future European emissions standards. There has been some speculation about emissions but this confirms that the technology for the new car has been kept to the forefront so that this car will keep emissions low. Lower Mr. Tata says than many small cars on the road today. Why is this important? Imagine in a counntry where urban areas already have a high level of pollution, cities like Kolkata and Ahmedabad, imagine putting in millions of these cars on the road, it would have been a serious error for Ratan Tata to have a vision of a great vision of a small car for the Indian people without having though about the environmental consequence of this. It appears that the vision includes staying upto date with future European emissions standards also. The other aspect is safety, arapid increase in the car fatality rate also would set this car back, and here Mr. Tata says the car hasn't compromise by using plastic, as a car its like any other passenger car, its made of sheet metal. Profits and margins on this car Mr. Tata says will depend a lot on the input costs. One of the inputs is steel whose prices have been rising. It helps that Tata is a big manufacturer of steel and would be able to better manage this input cost. A lot of sourcing is done on the internet auctions to get the best price and Tata has a long term relationship it appears with Bosch for the engine as Bosch is investing heavily in India. See the links to Tata's $2500 car and to Bosch....

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Dubai's sewage system is not keeping up with the rest of the sewage system. For homes not connected to the sewage system the sewage is transferred by tanker trucks and sometimes tanker trucks will unload the sewage on desolate streets outside of town. Also treated sewage water is used in sprinklers in public parks in Dubai but this water may ot be healthy or have a bad odor so some residents ask their children to stay inside when the sprinklers go on. So where is the $300 billion thats supposedly going to be spent in the next 10 yeas and where is the money thats being spent now going for something as basic as sewage systems to be inadequately funded and tackled? It also shows the imbalances in development that go on side by side in the developig countries. In the rush for western style living a lot of other things may be happening or neglected. In China basic labor rights, food and drug safety, and pollution of the nation's water system, and contamination hazards were left untackled or ignored as a lot of money went into new infrastructure and western style living for those able to acquire it in the cities. Thus the substandard housing with neglect of safety inspections, supply of shoddy materials for building and the corruption which made a lot of this possible, especially painful when it came to collapsed school buildings in the Sichuan earthquake, is a recent reminder of these imbalances in the developing countries middle classes making a rush to acquire western standards of living. In Dubai sewage is rising by 25% a year and one sewage plant that is 30 years old is all that Dubai has to meet its expanding sewage needs!!!...