The World's Largest Renewable Energy Developer Could Go Broke

There is a “substantial risk” that SunEdison may file for bankruptcy, the world’s largest renewable energy developer said in a regulatory filing on Tuesday. The company’s fall isn’t a referendum on the solar industry as a whole, as much as it is on SunEdison’s aggressive growth strategy fueled by excessive debt and financial engineering, analysts say.

SunEdison “just thought they were smarter than everyone else,” said David Levine, the founder and CEO of Geostellar,  a solar energy marketplace that has done deals with the company.

The company's shares have fallen steeply since they hit a high of $30 in July. They were at just $1.26 before the filing. The stock immediately dropped another 40 percent when the market opened after the filing, and the company was trading at just $0.59 by Tuesday lunchtime.

SunEdison shares plummet 40 percent after bankruptcy concerns surfacehttps://t.co/i337x7fv2x pic.twitter.com/PdQZj0ijf7

— Bloomberg Markets (@markets) March 29, 2016

“What happened from late-2014 to the middle of 2015, the company began embarking on a hyper-growth strategy,” S&P analyst Angelo Zino told The Huffington Post.

SunEdison loaded up a total of $11 billion in debt to develop or acquire renewable energy projects. Once projects were complete, they sold them to one of two separate, public companies, called yieldcos, which SunEdison controlled. The company also created two internal financing entities, called warehouses, that raised a total of $2.5 billion to build renewable energy projects, which would be sold to the yieldcos once they were complete. 

The theory was that the risk of building and managing renewable energy projects could be split into its various components and investors could buy exactly the slice they wanted. To work, SunEdison needed to keep raising more money to build new projects, and its yieldcos needed to keep raising money to keep buying those projects so that the company could pay down its debt in order to borrow more to build new projects. 

“That is way too complicated, way too smart I would say... There’s only so much you should do because you are super smart,” said an industry observer, who is familiar with SunEdison’s business. “It’s a great company with great assets. It’s the finance department that’s the problem...They over-engineered it to death.”

Levine told HuffPost that a deal to buy the residential solar company Vivint for $2.2 billion in July of 2015 started the cratering. He pointed out that there’s nothing inherently wrong with yieldcos. Other solar companies and other utilities have them, but what set SunEdison apart was what it tried to stuff into the yieldcos. Rather than sticking to utility scale projects, SunEdison included residential solar that was tied long-term contracts. Investors didn’t trust these contracts, called purchase power agreements, because they locked in rates at current prices, which wouldn’t make financial sense if solar costs keep falling, as they are predicted to. “[Investors] considered purchase power agreements for consumers to be the equivalent of subprime loans,” Levine said. “I think it was a totally stupid deal to do Vivint and it made everyone question SunEdison.”

As a result of the Vivint deal, investors soured on the company's yieldcos and their stock prices, along with SunEdison's, started dropping. That meant that the yieldcos couldn’t raise more money to buy more assets from SunEdison. Worse, SunEdison had to delay its financial report because of accounting questions, so the company, already deeply in debt, couldn’t borrow more money. The carefully laid financial structure lacked what was necessary for it to work: new cash flowing in.

When financing dried up, SunEdison’s only option was to sell its assets to other companies, like utilities. But Zino said there had been limited asset sales since the company last reported in November. “We’re at a point now where if they haven’t been able to generate cash via those assets sales, and you can’t tap the equity markets and you can’t tap the debt markets, there’s really no other means to generate cash,” the S&P analyst said. Zino thinks that could be because SunEdison's projects aren’t as good as the company says or because buyers know they are in trouble and is negotiating to get lower prices.

Now the company, by their own admission, may file for bankruptcy protection. Zino, noting that strong growth in renewable energy last year, sees a bright spot for other big solar companies: They now have a chance to buy up projects from a competitor at a discount.

SunEdison did not immediately respond to a request for comment.

California Reaches Deal For $15 Minimum Wage

SACRAMENTO (Reuters) - California Governor Jerry Brown said on Monday he had reached a deal with top legislators and labor leaders to gradually raise the minimum wage to $15, the latest in a wave of minimum wage increases at the state level following a push by Democrats.

The proposal, which still must win approval from moderate lawmakers in the California assembly, would gradually raise the state's minimum wage to $15, but give the governor the right to opt out if the economy faltered.

Such a move would give California the highest statewide minimum wage. The federal minimum wage has remained at $7.25 an hour for more than six years.

Raising the minimum wage has cropped up on many Democratic Party candidates' agendas ahead of the November presidential, congressional and state elections. The issue could help mobilize Democratic voters and galvanize support from labor unions.

"An agreement has been reached with key labor leaders, legislative leaders and my administration to raise the minimum wage over time to $15 an hour, making California the first state to do that," Brown said at a press conference in Sacramento.

"It's a matter of economic justice and it makes sense," Brown said.

The deal would commit California to raising the minimum wage to $15 an hour by 2022 for large businesses and 2023 for smaller firms.

The measure’s chances of passing the legislature will depend on support from moderate Democrats, who have held up other measures backed by the governor.

Democratic Party presidential hopeful U.S. Senator Bernie Sanders of Vermont has called for raising the federal minimum wage to $15 an hour by the year 2020.

The idea has been opposed by Republicans and some business groups, who have said a higher minimum would harm small businesses and strain the budgets of government agencies.

Christopher Thornberg, founding partner at Beacon Economics, said increasing the minimum wage was not an effective tool in reducing poverty because those most at risk of falling into poverty tend lose their jobs when employers cut positions.

"This is not costless," Thornberg said. “These are the people that businesses will say, "If I’m going to pay $15 bucks an hour, I’m not going to hire them.'"

Fourteen states and several cities began 2016 with minimum wage increases, typically phasing in raises that will ultimately take them to between $10 and $15 an hour.

 

(Reporting by Sharon Bernstein, Robin Respaut and Dan Whitcomb; Writing by Dan Whitcomb; Editing by Grant McCool and Alan Crosby)

The Story Behind The Craziest Corporate Collapse Of The Last Decade

Things have gone from bad to worse this week at drug giant Valeant Pharmaceuticals, and its future is looking bleak.

After months of scandals and falling stock value, the debt-saddled Canadian company announced Monday that it had fired its CEO and reshuffled some of the seats on its board of directors -- though it still can't get rid of one disgraced former exec who still sits on the board. It also admitted to some shady accounting practices.

The company will re-release basically all of its financial statements, which will almost certainly give a bleaker picture of the company than we already have.

On top of all this, the company is the subject of several investigations, including one by Congress and one by the Securities and Exchange Commission.  

The Valeant story is so complicated and dramatic that one Wells Fargo analyst called it "a soap opera" in The New York Times. That almost seems too conservative a description for this story, so let's dive in. 

'Improper Conduct'

The company appears to have some serious accounting problems. It admitted in a press release on Monday that its former chief financial officer, Howard Schiller, who stepped down as CFO last June, and its corporate comptroller Tanya Carro engaged in “improper conduct.” Essentially, the company recorded some drug sales twice -- once when it sold them to now-shuttered mail-order pharmacy company Philidor, and once when Philidor sold them -- resulting in inflated revenues in 2014 and 2015. (Valeant's relationship with Philidor is very strange, and there's more here if you are interested.) Carro has left the company, but Schiller remains on the board of directors.

This press release comes just three weeks after the company announced it is under investigation by the Securities and Exchange Commission and six weeks after the House of Representatives released a report detailing how Valeant and another drug company, Turing Pharmaceuticals, buy up and inflate the price of drugs. (More on this later.)

Valeant spent a fair amount of energy trying to keep people from finding out about its price gouging, according to the Congressional documents. One internal PR communications plan noted that "Valeant’s upcoming price increase on three drugs ... has the potential to insert Valeant into the ongoing dialogue about orphan drugs, and therefore needs to be managed carefully."

Major Shakeups

As a result of these accounting issues coming to light, the company said Monday that it will replace CEO J. Michael Pearson. The company is looking for a new CEO, and Pearson will remain on board until they find one.

Kevin Van Paassen/Bloomberg via Getty Images

Michael Pearson, the CEO of Valeant, will step down once the company finds a replacement.

The company also announced a new addition to its board: William Ackman, the activist investor and CEO of Pershing Square Capital Management, which owns a 9 percent stake in Valeant. Taking a seat on the board personally means Ackman is taking a hands-on approach to righting the Valeant ship in an attempt to make his money back. Last week Ackman's fund lost $1 billion in a single day as a result of its stake. Ackman appears dangerously close to losing the entirety of his original $4.1 billion investment in Valeant, according to Matt Levine at Bloomberg View. 

Then there’s former CFO Howard Schiller. (Remember him from earlier?) Schiller disagrees with the company's accusation that he engaged in "improper conduct" and released his own statement on Monday saying he did nothing wrong. He is still on the company’s board. The company says it asked him to resign this week, but he refused (a relative rarity in corporate America). So he’s technically not out, but not exactly welcome.

Because the company’s board is capped at 14 people and Schiller refused to resign, another board member, Katharine Stevenson, “voluntarily resigned” in order to make room for Ackman, according to Monday's release.  

Tanking Stock

Until the last few months, Valeant was one of the market's fastest-growing pharmaceutical companies, but its stock has since collapsed. After peaking at more than $260 a share in August of 2015, it is trading at about $34 a share as of Wednesday afternoon. 

Yahoo Finance

Valeant's stock is down more than 80 percent since last August.

Valeant's Special Place In The Industry

Why is this such a big story? Mostly because of Valeant's role in pioneering the financialization of pharmaceuticals. It's not just a company that does research, then turns out prescription drugs. Instead, Valeant is a "platform company," which the Financial Times describes as "companies that expand by continually buying rivals in musty and unloved segments of the market, supposedly squeezing out efficiencies as they go along." 

Recall Martin Shkreli, the executive who made news a few months ago for hiking up the price of the anti-parasitic pill Daraprim, often used by AIDS patients, by more than 5,000 percent? Shkreli didn’t invent that move. Valeant was doing it first. A report published by the House of Representatives in February showed that Valeant bought two “orphan drugs,” a term that describes medications used to treat rare diseases, in 2015 and hiked the prices by 525 percent and 212 percent respectively. Those two drugs alone brought the company $351 million. 

But Valeant also racked up a ton of debt in its quest to buy drugs and smaller pharmaceutical companies -- and it’s increasingly unclear whether that will be sustainable for the company.

Doomsday Predictions

“We do not believe that [Valeant] is really a company with a coherent core in a traditional sense," an analyst from investment bank Piper Jaffray wrote this week, "but rather is just an entity that over the years has sought to take advantage of a series of arbitrage opportunities: tax arbitrage, expense arbitrage and drug pricing arbitrage.”

Bill Gross, the legendary bond trader, tweeted on Tuesday that Valeant’s “biz model was based on leverage and [financial] engineering.”

The company has mostly been run by finance executives over the last decade, as Slate’s Moneybox columnist Jordan Weissmann noted on this week’s Slate Money podcast. Pearson joined Valeant in 2008, after 23 years at the management consulting company McKinsey. Schiller joined as CFO in 2011, after 24 years at Goldman Sachs.

Given the company's epic demise, the financialization of pharmaceuticals is a strategy that doesn’t seem to be working out too well.

Language in this post has been changed to clarify the meaning of "orphan drug."

Why Levi's Is Giving Away Its Trade Secrets

Levi Strauss & Co. is giving away its special sauce.

The blue-jeans behemoth said Tuesday that it plans to reveal its strategies for reducing water use by 96 percent when making denim, so the tactics can be adopted by competitors across the industry. The announcement came on World Water Day, the holiday designated 23 years ago by the United Nations for celebrating the availability of fresh water. 

“Water is a critical resource for our business, the planet and people around the globe, but usable supply is becoming increasingly scarce,” Michael Kobori, vice president of sustainability at Levi's, said in a statement. “We’ve long been committed to being water stewards, but realize more needs to be done. We’re setting competition aside and encouraging others to utilize these open source tools.”

Levi's introduced its suite of 21 water-saving methods in 2011, including strategies like buying only sustainable cotton and using less water when finishing and washing denim. Since then, the company has conserved more than 1 billion liters of water. If its techniques were to become industry standard, Levi's estimates they could save 50 billion liters by 2020. 

"Making the jeans we wear is a very thirsty business," Brooke Barton, water program director at the nonprofit sustainability group Ceres, told The Huffington Post on Tuesday. "Levi's commitment to open source this technology means that others in the apparel sector have no excuse but to step up their game."

Levi's, whose CEO Chip Bergh famously eschews washing his jeans, said Tuesday that it plans to double-down on its sustainability efforts by 2020, the year many companies have set for overhauls in their supply chains and environmental policies.

By then, the company aims to source 100 percent of its cotton from farms certified by the nonprofit Better Cotton Initiative or from recycled material. Up to 80 percent of all Levi's products will be made with water-saving techniques, trademarked under its Water<Less brand. As part of its partnership with nonprofit The Zero Discharge of Hazardous Chemicals Foundation, it will eliminate all hazardous chemicals from its supply chain in the next four years. And, as part of an initiative backed by the White House, all corporate employees at the company will complete Project WET water education training.

The idea of allowing competitors behind the curtain in hopes of fostering higher industry standards isn't new.

As far back as the 1960s, Swedish automaker Volvo invented the three-point seat belt and promptly gave away the design to other manufacturers to make all cars safer -- not just its own. 

More recently, in 2010, Nike released a tool featuring many of its environmental design techniques, for free use by other clothing manufacturers. Three years later, the company folded the tool into a free app called Making that draws data from the Nike Materials Sustainability Index.

Nike CEO Mark Parker claims that its Flyknit technology has saved over 3 billion pounds of waste #Nike2016

— HuffPost Sports (@HuffPostSports) March 16, 2016

In June 2014, Tesla pledged not to sue anyone who used the electric carmaker's patented technology "in good faith," in hopes of cultivating a bigger industry for rechargeable vehicles. The argument was that copycat companies would expand the market, and the rising tide would raise all ships.

Levi's move is less about increasing competition and more about sharing strategies it's already developed. It's a refreshing perspective in a time of water crises. 

Having A Bad Day/Week/Month At Work? Here's How To Turn That Around

Michelle Gielan is a big fan of positive thinking. A former journalist for CBS News, Gielan believes that focusing on good news goes much further than harping on the bad.

Gielan, now a positive psychology researcher at the University of Pennsylvania and the author of Broadcasting Happiness, previously examined the impact that solution-based news reporting had on readers. She found that people don't necessarily favor depressing or sensational stories. They also enjoy stories that present society's problems as opportunities for improvement -- and they were more likely to share those stories with friends and family.

Intrigued by the results, Gielan decided to take a look at whether a solution-based approach would help solve problems in the workplace too. Her latest research, conducted in partnership with The Huffington Post, focuses on how managers can better talk about issues in the office and get people to think creatively.

The key, once again, is to not just highlight what’s going wrong, like poor quarterly results or a change in management, but to offer solutions for those specific problems. That way, team members are thinking about how to improve going forward, rather than becoming dejected by less-than-ideal results at work.

“Managers struggle with telling their teams about bad news, but you don’t have to isolate your team from bad news,” Gielan told HuffPost. “You have to do it in a way that gets their brain moving from problems to potential solutions.”

For the study, 248 participants were asked to read an article that either revolved around a problem or explained both the problem and solutions. One article, for example, looked at food insecurity in the United States, while another discussed ways in which food bank shortages could be avoided.

Those who read a solution-based article reported feeling less hostile, less uptight and less agitated than those who had read a problem-based article. But the researchers didn't just observe a difference in participants' mood: When individuals read about solutions or actions that would be easy for them to recreate (like donating to a food bank), they improved by 20 percent on a task they were asked to complete later.

“When you remind people of their ability to control specific things, people do better” on tasks, she said.

In a way, she added, putting forward solutions among team members in an office isn’t too different from a news outlet highlighting positive stories for its readers.

“We’re constantly broadcasting info to people, as team members, as managers, as parents, and it can fuel people to success or hold them back,” Gieland said. “How can a business change what it’s broadcasting to its employees?”

Positive thinking can go beyond the office, too. A growing body of research has supported the benefits of this optimism to physical health, including reducing the risk of heart disease and improving immune system function.

But some caution against getting carried away with positive thinking. A recent study published in the journal Psychological Science posits that leaning too heavily on optimistic fantasies could, in the long run, exacerbate symptoms of depression.

Instead, those researchers suggested that positive thinking be taken in the right doses -- and that people remain realistic about achieving their goals.

Even At A Company Obsessed With Fair Pay, Women Make Less Than Men

To get a sense of how complicated the gender pay gap is, take a look at Buffer, an 85-person company seemingly obsessed with paying workers fairly.

Nothing about salary is secret at the social media management company. A publicly available spreadsheet documents each Buffer employee’s salary. There’s little confusion over the rationale behind the numbers: To figure out what to pay people, Buffer uses what it believes to be a clear formula. Workers are paid according to the cost of living where they work, the market rate for their particular position and their experience level (the formula is also publicly available.)

There are no ambiguous annual bonuses doled out based on subjective measures of how you perform. Instead you get a 5 percent raise each year, categorized as a “loyalty increase.”

Yet despite a clearly scrupulous commitment to pay fairness, Buffer just realized that women at the company make less than men overall. The average annual salary for a man at Buffer is $98,705, while women make $89,205, according to internal analysis from Feb. 23, Buffer released last week -- its first look at gender and pay.

“We were surprised,” Courtney Seiter, who heads up Buffer’s inclusivity efforts, told The Huffington Post. “We’ve had transparent salaries for two and half years, we put out so much data that it never occurred to us to analyze it [for gender] until recently.”

Salary transparency is supposed to be a magical disinfectant for the stubborn scourge of gender pay inequality -- the fact that women make 78 cents for every dollar a man earns, according to federal data. An increasing number of companies are starting to examine how they pay men and women -- including Intel, Salesforce and Apple -- in an attempt to root out bias. (Others, like Amazon, stubbornly refuse.)

Many think that getting rid of secrecy around pay is the key to equality. California recently passed a fair pay law that protects workers who talk openly about pay. 

There’s even a bill lurking around Congress -- floated by GOP senators -- to make it easier for workers to talk about how much they make, for the express goal of getting rid of pay inequity.

“Ensuring transparency would not only make it easier for workers to recognize pay discrimination, it would also empower them to negotiate their salaries effectively,” Sen. Deb Fischer (R-Neb.) told an audience at the conservative American Enterprise Institute on Friday, pushing for the bill, the Workplace Advancement Act, which offers stronger legal protections for workers who share salary information.

It’s not clear if Fischer thinks transparency will be enough to root out gender pay discrimination, but she used her time before the conservative group to criticize other efforts around fixing the gender pay gap, including a recent proposal floated by the Obama administration that would require companies with more than 100 employees to turn over data on worker pay, ethnicity, race and gender, with the Labor Department.

Through a spokesperson, Fischer declined to comment to HuffPost on the new Buffer data, which suggests that figuring out the pay gap does not end with transparency. You must also take a deeper look at the numbers, as Buffer is now starting to do. Fischer called such efforts -- if required by government mandate -- too cumbersome for the private sector.

Of course, knowing what your colleagues make is powerful information. The knowledge certainly helps you figure out if you’re making a fair wage. Armed with this information, women (and men) can negotiate for raises; I’ve written about this before. If Lilly Ledbetter had only learned sooner that she was paid far less than her male colleagues at Goodyear, perhaps she wouldn’t have wound up filing a lawsuit against the company that went all the way to the Supreme Court -- which she lost for waiting too long to sue.

However, the reason women in the United States make less money than men is too complicated for negotiation alone to fix.

A number of factors drive the gap. Women tend to work in lower paying fields: More men are engineers and CEOs. More women are social workers and human resource managers. At Buffer more men work as developers, who are paid more than those in customer service, for example.

This is not simply the result of choice, but a more complicated stew of gender bias that both funnels women into lower-paying fields and depresses wages in fields that are dominated by women, as a recent piece in the New York Times explained.

Within professions, women tend to make less money because they gravitate to work that is less demanding or requires fewer hours. Many need flexibility and time to take care of children and family. So more men become partner at high-paying law firms, while female lawyers might gravitate to lower-paying in-house legal jobs, for example. The work of economist Claudia Goldin at Harvard has been emphatic on this point. It also means that we take more time away from the workforce, further depressing wages.

Negotiation won’t fix this. Policy solutions might help, for example, by providing paid parental leave and, possibly, subsidized child-care that would allow more women to stay in the workforce and even out the gap.

On top of all this, there’s still the “unexplained gap,” the difference between men and women’s pay that cannot be accounted for by looking at years in the workforce or occupation. Even when you control for that stuff, women’s pay does not quite match up to men’s.

There’s plenty of blame-the-victim theorizing in this area -- where researchers look at how women negotiate pay or advocate for promotions. And how employers respond when women do step up and ask for more.

Open Salaries at Buffer: Our Updated Transparent Formula & All of Our Salaries: https://t.co/80aS4JhG9q #TalkPay pic.twitter.com/5ZoZIzS6z0

— Buffer (@buffer) February 28, 2016

At Buffer, women make less than men for a few reasons, Seiter theorizes.

First, like so many tech startups the company, founded in 2010, is majority male: 70 percent of workers are men.  Buffer’s earliest employees were men, and because of the salary formula -- remember, $5,000 a year for “loyalty” -- that means they make more money. Seiter calls this a “diversity debt.”

It’s not hard to imagine that such a debt, which puts men ahead of the game right at the founding of an organization, is common at other places.

“There are very subtle ways that this debt can accrue if we aren’t deliberate,” Seiter said, noting that the software company Salesforce (also a male-founded and dominated company) recently spent $3 million adjusting salaries to get rid of its pay gap. If Buffer hadn’t caught this, “we could’ve turned around and had a Salesforce situation,” she said.

Second, men are more likely to work as developers at Buffer. And developers are paid more. You’ll see (in the chart above) that in customer service at Buffer, women are actually paid equitably.

There's evidence that the gender pay gap is wider in fields that are dominated by men, Andrew Chamberlain, chief economist at salary website Glassdoor, told Huffpost. Chamberlain is immersed in salary data, which Glassdoor collects from users of its job-seeking site. He was surprised that even at a company that practices salary transparency, there would still be a pay gap. "Fascinating," he said.

The third and trickier reason for the pay gap at Buffer could be its salary formula, Seiter said. “The only area where we haven’t licked unconscious bias is in assessing experience level,” she said. “We don’t have a hard and fast criteria.”

At Buffer an employee’s experience level -- intermediate, advanced or master -- is arrived at by considering a mix of criteria, including years in the workforce and skills. It’s perhaps telling that 61 percent of male employees at Buffer are considered advanced and just 38 percent of women get the same grade. At master level, things are more equal: 4.1 percent of women are master level, compared to 3.5 percent of men.

The company plans to take a fresh look at how it measures experience, going forward. And, at the same time, will aggressively try to hire more women in an effort to even out pay. Seiter also said Buffer wants to be more deliberate in laying out the steps employees need to take to advance up the ladder.

Still, for her part, Seiter does not believe she is paid unfairly and believes her colleagues are similarly situated. After all, this is a company where you can easily click to find out how much the guy next to you makes. “We talk about pay a lot in a philosophical way, but the talks don't have a feeling of insecurity or any kind of doubt.”

What The US Can Learn From UK Supermarket Donating Unsold Food

One of the U.K.’s -- and the world’s -- biggest grocery store chains announced big news on the food waste front this month.

In the coming months, Tesco, which boasts some 6,800 stores worldwide but is headquartered in England, will expand its 14-store trial run of an initiative that saved the equivalent of 50,000 meals worth of food from heading to a landfill, donating that food, instead, to charity groups.

The company plans to have the program, powered by a digital food-redistribution platform called FareShare, in place across all of its U.K. stores by the end of 2017. By that time, the chain aims to partner with 5,000 different charity recipients of its unsold food.

Tesco’s announcement comes on the heels of a number of new developments on food waste to come out in recent months.

Last week, Italy followed in France’s footsteps by becoming the second country in the world to require that supermarkets donate their unsold food to charities instead of throwing it away. And earlier this year, Denmark became home to its first supermarket dedicated entirely to “surplus” food.

Compared to the momentum happening around food waste abroad, U.S. efforts on the issue make for decidedly less eye-grabbing headlines.

Last year, the Environmental Protection Agency and U.S. Department of Agriculture announced an ambitious goal for the U.S. to cut its food waste by 50 percent by the year 2030, but progress toward that goal has felt slow.

Emily Broad Leib, director of Harvard Law School’s Food Law and Policy Clinic, says that is because the U.S. has arrived at the issue later than countries like France and the U.K., where efforts to address the issue have gotten a significant head start on the U.S. and are, just now, coming to fruition.

Still, Leib noted, Americans are making significant progress.

“I do think it’s on the radar of more and more stores,” Leib told The Huffington Post.

A handful of states have already passed some kind of legislation aimed at reducing food waste, with encouraging results. In Vermont, some food charities reported a 50 percent surge in donations after a new law capping the amount of food companies can bring to a landfill went into effect in 2014. A similar law also went into effect in Massachusetts last year.

Perhaps more notably, companies themselves are being proactive on the issue.

Credit: Toby Talbot/Associated Press

In this Nov. 15, 2013 photo, a truckload of food scraps is dumped at Vermont Compost in Montpelier. The state's food waste legislation puts a cap on the amount of food that can be sent to a landfill.

Walmart announced, last year, that it had asked its private brand suppliers to switch to standardized labeling stating, only, “best if used by” dates rather than the endless variations of alternative labels that often cause consumers to throw out food that was still perfectly safe to eat.

“It doesn’t seem like a big change, but part of the challenge when labels are not standard is that consumers aren’t sure what to gather from that,” Leib said, “but standardized labeling resonates with consumers.”

William Fisher, vice president of science and policy initiatives at the Chicago-based Institute of Food Technologists, agreed.

A paper Fisher co-authored in 2014 argued that inconsistent date labeling on food products not only led to consumer confusion and food waste, but also an unneeded financial burden for consumers and retailers alike. The paper concludes by calling for uniformity in date labeling and increased consumer education on what different terms on date labels actually mean.

More generally, Fisher added, he believes the industry is more willing “than ever before” to tackle sustainability issues like food waste.

“It’s not a fad and it’s clearly not a trend,” Fisher told HuffPost. “When I talk to people even around the world on this, I see progress being made every day.”

David Fikes, vice president of the Food Marketing Institute, which helps operate the industry-led Food Waste Reduction Alliance, said the alliance's members are not only open to the idea of taking action but are already doing so.

Members of the group, co-operated by the Grocery Manufacturers’ Association and National Restaurant Association and FMI, also include industry heavyweights like General Mills, McDonald’s and Kellogg’s. One member company, Kroger, is using food waste to help power one of its distribution centers in California via an anaerobic digester. Another, Wegmans, has made significant strides with its composting efforts.

Credit: Daniel Acker/Bloomberg via Getty Images

Peppers are displayed for sale at a Kroger store in Peoria, Illinois, on June 16, 2015.

Frankly, Fikes added, caring about food waste is just not a tough sell to the industry at this time.

“There is no one in this business who wants to see food go to waste,” Fikes said. “It’s bad for business, bad for the economy and bad for the environment. Everyone in this industry would like to see food waste reduced if not completely eradicated.”

Though the industry is largely aware of the strategies available for addressing the problem and willing to give them a go, there are still significant obstacles to them doing just that.

According to Fikes, the U.S. is at a disadvantage at dealing with food waste compared to European countries due to the layers of regulations presented by local, state and federal government.

Infrastructure like storage capacity and transportation methods are also a concern, as Fikes pointed out that it takes time to prepare for a surge in donations between food retailers and charities like what was seen in Vermont.

And though current federal law already protects “good Samaritan” food donors in the event of donated food “causing harm” to its recipient, Fikes said those laws could be stronger.

Still, Fikes says his group and other industry leaders are keeping a close eye on how European initiatives on food waste pan out.

“It’s a bit of a different environment, but there’s no reason we can’t take success stories from there and apply them to what we’re doing here,” Fikes said.

The need for action is significant. According to the EPA, the U.S. sends approximately 30 million tons of food to landfills each year, waste that emits methane, a greenhouse gas that contributes to climate change.

And addressing food waste in retail environments is just part of the battle. American consumers, in their own home, shoulder the largest portion of the blame, tossing out an estimated $640 worth of food per household each year.

If Farm-To-Table Eating Is Cool, What About Toilet-To-Tap Drinking?

When any given water supply grows scarce, there are only so many ways to adapt our day-to-day, water-reliant lives: Use less water or somehow recycle it.

In the case of the serious drought conditions that continue to grip much of the state of California and areas in other states, many of the short-term solutions have focused on the former. But increasingly, water recycling -- the treatment and purification of wastewater -- is on the table. 

Critics have derided the trend -- which comes as food sustainability, encapsulated in the farm-to-table philosophy, gains popularity -- as “toilet-to-tap” drinking. But a new survey released this week finds a surprising number of Californians are on board with the concept.

The online survey of 3,000 California voters, conducted by Edelman Intelligence and commissioned by Xylem, a water technology company, found that 42 percent of respondents were “very willing” to use recycled water in their daily routines. That includes showering, brushing their teeth and, yes, drinking it. Another 41 percent were “somewhat willing” and support increased further after respondents read information about how recycled water is treated.

The support has improved from previous polling on recycled water, and it's not just because of the current drought. 

The survey results also suggest that respondents are on board with recycled water even if El Niño-fueled weather patterns bring drought relief. Seventy-six percent of respondents saw recycled water as a promising long-term solution for the drought.

It is that finding that most stood out to Xylem Senior Vice President Joe Vesey, who said the results should indicate a green light of support from Californians to the state’s water authorities and political leaders.

“This shows the public is really committed to using recycled water,” Vesey told The Huffington Post. “Amidst the greater backdrop of El Niño as a potential savior, that hasn’t changed their commitment.”

The Xylem-sponsored survey’s results are in line with multiple polls that have shown growing support for recycled water in general, though not always for drinking water.

Such a use has long carried a certain "ick" factor that has, in the past, united communities against proposed projects.

That appears to be changing. Fifty-eight percent of Bay Area respondents to a poll released last year by the Bay Area Council, an economic policy nonprofit, supported adding properly treated recycled water to the drinking water supply. That’s a big jump from eight years ago, when an Oregon State University poll of Corvallis, a Democratic stronghold in western Oregon, found that 38 percent of respondents supported the use of recycled water for drinking purposes.

Another survey, published in Judgment and Decision Making last year, found 49 percent of participants nationwide said they were willing to drink recycled wastewater, though 13 percent still refused, vehemently, to do so -- even after being informed that the treated water was purer than bottled or tap water. 

David Sedlak, co-director of the University of California Berkeley’s Water Center, believes that improvement can be credited to an increasing familiarity with water reuse projects among the general public as well as among regulators and engineers. And the drought has certainly opened up people's minds to water scarcity solutions they may have otherwise disregarded.

Still, Sedlak noted, education about water recycling can only go so far. More important, he argues, is a slower process of legitimization that is only achieved as water reuse projects, like those initiated in Orange County and the Inland Empire many years ago, become more commonplace.

“I don’t think it’s the act of simply telling people about the technology that builds the support for it. It’s a lot broader than that,” Sedlak said. “I personally am not sure I agree with the idea that simply telling people about the technology in 30 seconds and giving them a poll is a very scientific way of measuring legitimacy.”

Gregory Bull/Associated Press

An engineer fills a container with recycled water at the Advanced Water Purification Facility in San Diego. The city has invested $2.5 billion in recycling wastewater.

Crucial to continued public acceptance of recycled water, Sedlak said, is a level of transparency and community engagement that has traditionally been unusual in water projects.

The Orange County Water District project was a good example of that, according to a paper Sedlak and a team of researchers published last year in Environmental Science & Technology.

In Orange County, the water district focused not only on the technology they would use to ensure the recycled water’s safety. The district, as Sedlak and his colleagues argued, also pushed to explain how water reuse was in the community’s long-term interest and actively solicited and accepted community feedback on the project. And if any issues arose along the way, as they did when a carcinogen turned up in water its facility had treated in 2000, they were transparent about the problem.

It appears that model may be catching on, as water reuse projects are springing up not only in California, but also in states including Arizona, Nevada, Florida and Colorado.

In Texas, El Paso will soon be home to the nation’s first facility to treat recycled drinking water directly. Facilities like those in Orange County and San Diego, where water is treated after passing through an environmental buffer like groundwater or a surface water source, are considered indirect potable water reuse facilities.

For his part, Vesey agrees that the public’s participation in the growing number of successful water reuse projects, especially in California, has been key to that success. He believes his company’s new survey is proof that approach is already paying off.

“I think we’re at the dawn of a new age for water,” Vesey said, “and I think California is likely to lead or be one of the leaders in that new age.”

The Federal Reserve Holds Off On Interest Rate Hike

The Federal Reserve announced on Wednesday that it is leaving its benchmark interest rate unchanged, a move designed to encourage recently robust job creation to continue.

The decision by the Federal Open Market Committee, the central bank panel charged with adjusting its influential federal funds rate, means Americans will likely avoid paying higher interest rates on their mortgages, car payments and other loans.

The influential federal funds rate, or the interest rate banks charge one another for overnight lending, will remain at a target range of 0.25 to 0.5 percent. The Fed raises the interest rate to head off rising price inflation by slowing the pace of job market growth.

“With appropriate monetary policy, we continue to expect moderate economic growth, further labor market improvement and a return of inflation to our 2 percent objective in 2-3 years,” Federal Reserve Chairwoman Janet Yellen said at a press conference announcing the decision. “However, global economic and financial developments continue to pose risks.”

The last time the Fed raised the federal funds rate was in December, the first time since the 2008 financial crisis. It is a testament to the tenuous state of the economic recovery eight years later that the Fed is still exercising so much caution.

Wednesday's decision was widely expected, in light of modestly gloomier global economic conditions and lackluster U.S. wage growth.

As investors have become more anxious, credit has become harder to obtain in the United States. The tighter lending had the same depressing effect on the economy as a 1 percentage point Fed rate hike, according to economists at Goldman Sachs.

The dollar also continues to rise relative to foreign currencies, making U.S. exports less competitive.

And while the U.S. economy continues to produce jobs consistently, wages declined in February.

Yellen acknowledged that the robust job market had yet to produce significant wage growth.

“I must say, I do see broad-based improvement in the labor market and I’m somewhat surprised we’re not seeing more of a pickup in wage growth,” she said. “It is one of the factors that suggests to me there is continued slack in the labor market.”

Inflation is finally approaching the Fed’s 2 percent target, however, indicating that the Fed may soon have the evidence it needs to raise the interest rate when the FOMC meets again in April.

The price of consumer goods, excluding food and energy, rose 1.7 percent growth in the 12 months ending in January, according to the price index favored by the Fed.

SAUL LOEB/Getty Images

Federal Reserve Chair Janet Yellen speaking at a press conference on Wednesday after the Fed announced that the benchmark interest rate will not rise.

Indeed, all ten sitting members of the FOMC, as well as the seven regional Federal Reserve bank presidents not on the committee, believe economic conditions will allow for an interest rate hike before the year's end.

The 17 officials' predictions, however, released in a survey known as the "dot plot," show greater pessimism about the economy than when the Fed last met. The officials' median projection is that the Fed will raise the interest rate to 0.9 percent by the end of 2016, compared with the December 2015 median projection of 1.4 percent.

One sitting FOMC member, Kansas City Federal Reserve Bank President Esther George, voted against the decision, favoring a 0.25 percent rate hike at this time.

In a week dominated by presidential election and Supreme Court nomination news, the Fed’s announcement stands to draw only moderate attention.

But the lack of a rate hike, which gives the economy more leeway to grow unencumbered, is probably good news for Hillary Clinton’s presidential candidacy. The putative Democratic front-runner is poised to benefit from a positive economic outlook, since voters are more likely to return an incumbent party to power if the economy is doing well.

Public opinion polls and the populist electoral mood in both political parties suggest that voters still do not feel their economic fortunes palpably improving, despite a record streak of job growth. Many analysts argue that the lack of a political upside to the high-performing economy is because Americans are, on average, not making much more money.

That is why progressive economists and activist groups have been calling on the Fed to allow unemployment to dip even lower, so employers will begin raising wages more significantly in order to compete for workers.

The progressive Fed Up coalition, comprising groups representing low-income workers and communities of color, is calling on the Fed not to raise the benchmark interest rate at all in 2016.

“The Fed needs to connect the dots with reality: involuntary part-time work is still almost double pre-recession levels, labor force participation rates are still low, Black unemployment is more than double white unemployment and Latino unemployment and underemployment is still at crisis levels, and wage growth is almost non-existent,” Dushaw Hockett, executive director of SPACES, a Washington, D.C. community group that is part of the Fed Up coalition, said in a statement.

“Rather than slowing down progress, the Fed should do all it can to facilitate growth in 2016 and beyond.”

Etsy's New Parental Leave Policy Is Basically Perfect

Etsy just increased the amount of parental leave it offers. Starting April 1, all workers at the Brooklyn-based company known for selling hipster-precious, hand-crafted goods will be able to take 26 weeks off after the arrival of a child via birth or adoption. 

That’s a big increase from the company's old policy, and follows examples set by a bunch of other tech companies that are racing to improve benefits as the war for talent continues.

But what truly makes Etsy’s announcement notable? It's gender neutral. Men and women at the 800-person company will be eligible for six months leave and -- this is key -- Etsy will no longer give more time off to "primary" caregivers, a falsely neutral designation that companies effectively only apply to heterosexual women.

Etsy

Etsy's headquarters in the Dumbo neighborhood of Brooklyn.

Previously, Etsy gave "primary" caregivers 12 paid weeks off, and "secondary" parents five paid weeks.

"It was playing out in a gendered way," Juliet Gorman, Etsy’s director of culture and engagement, told The Huffington Post.

"Male employees read the policy and thought, 'I must only be eligible for secondary,'" she said, adding that there's no established definition of what constitutes a primary or secondary parent. 

The company is following on the heels of Netflix, Spotify and Facebook, which now offer men and women equal paid time off. The United States has no paid leave policy, but does guarantee 12 weeks of unpaid leave regardless of gender to some new parents.

Gorman pointed out that most millennials are raising their kids in dual-income households where the expectation is that both parents share responsibilities. Designating one of those parents the primary caregiver seemed like a "dated concept," she said.

Although she didn’t know how many Etsy workers fall into the millennial age bracket, Gorman said the company adheres to a "millennial ethic," which apparently means it has a progressive bent and is concerned about the well-being of its workers. Etsy also offers such benefits as six-week sabbaticals and paid time off to volunteer.

"Etsy, regardless of age, is a very kind of plugged-in, ear-to-the ground, socially progressive company," she said.

Of course, we don't know how Etsy's new policy will play out in real life. At Facebook, for example, new fathers still reportedly take about half the time off that's offered to them.

"In many places the idea of a man taking time off at all is stigmatized. For a man to say he’s a primary caregiver, it’s downright impossible," said Josh Levs, author of All In, a book that looks at how fathers are treated in the workplace.

Primary and secondary parent designations are basically just "coded language" that reinforces traditional gender stereotypes, Levs said. 

Using a policy based on these designations is harmful is a couple of ways. First, it puts women at a disadvantage at work, as colleagues and supervisors tend to either consciously or unconsciously expect them to stop prioritizing their jobs after the arrival of a child. This typically means that new mothers aren't promoted as much, or aren't asked to take on extra responsibilities like traveling. Indeed, one study found that women’s salaries decrease with every new baby they have. 

Men, on the other hand, see their incomes rise when they become fathers. However, they’re put on unequal footing at home, deprived of key bonding time with their children and the ability to provide support to their coparent. Men who take leave are less likely to have partners who suffer from depression, one study found.

A couple of years ago, Etsy CEO Chad Dickerson tweeted about taking a five-week paternity leave and encouraged other dads to follow suit.

@avleen @johngoulah @kellan CEOs & BODs should make leave not just acceptable but encouraged. Etsy BOD 100% supportive. Asked for baby pics.

— Chad Dickerson (@chaddickerson) November 7, 2014

Oh, and giving men and women different amounts of time off for caregiving -- beyond the time it takes a birthmother to heal from childbirth -- is considered discriminatory, said Peter Romer-Friedman, a Washington-based civil rights lawyer.

"Policies that give disproportionate amounts of parental leave are vulnerable to legal attack under sex discrimination laws," he said.

"Being a good dad" is now part of men's aspirations in addition to being tall & having a beard - E. Harðardóttir @IcelandUN #SharingtheCare

— MenCare Campaign (@MenCareGlobal) March 14, 2016

 

Levs knows this better than anyone. When he was working at CNN a few years ago, he tried to use the 10 weeks of parental leave his parent company Time Warner offered, but was told he wasn’t eligible. Men could get the 10 weeks if they adopted a child with their partner or used a surrogate, but fathers whose partners gave birth could only get two weeks paid time off. Ultimately, Levs filed a complaint against the company and Time Warner changed its rules.

Still, plenty of other firms hold fast to the "primary" caretaker concept, including Goldman Sachs, JP Morgan and Adobe.

When Levs asked Goldman if a heterosexual man with a wife who gives birth to a child would ever be eligible for paid leave, the company declined to comment. When HuffPost asked about this again recently, a Goldman spokeswoman said she didn’t have anything to add.

The Financial Crisis Film 'Boom Bust Boom' Falls Prey To The Big Problem It Addresses

Can a group of portly, middle-aged puppets explain the financial crisis?

They certainly can try.

In the new Terry Jones documentary, "Boom Bust Boom," which premiered Friday in New York City, the Monty Python comedian uses puppets, cartoons and interviews with real people to turn a difficult and often boring subject into a lively lesson on history and the human biases that drive huge swings in the economy. Think of it as a whimsical version of "The Big Short." 

Set for a national release on March 18, the film shows how markets can boom and bust with regularity. Over the course of centuries, we see this cycle play out over and over, and yet, before each bust, we learn how people convince themselves this time is different. It's frustrating. Why can't humans just get it right? 

Unfortunately, the film falls prey to its own thesis, almost shutting out the voices of anyone who isn't a middle-aged white man, leading to a narrow view of this complex topic. It's not very helpful for thinking critically about how we might change things, and perhaps that's why the film offers few solutions.

"Boom Bust Boom" is at its best when illustrating some of history's worst economic meltdowns. It has informative and fun depictions of the 1637 tulip mania in the Netherlands, the crash of the South Sea Company in early 18th-century Britain, and the 19th-century speculation in (and fantastic crash of) British railroad stock. It also describes how the heights of speculation in the 1920s led to the lows of the Great Depression, and, finally, the hard lessons of the 2008 mortgage crisis. Every time is the same: Euphoria over rising prices leads to speculation, which ends with a crash.

Humans are not rational, the movie tells us. We are hardwired, from the time of our primate ancestors, to have certain biases and blind spots. When it comes to capitalism, those blind spots lead to financial crises. And when someone sees the issue clearly, they are often disregarded until long after it's too late.

The problem is, the film doesn't take the next step and ask why policymakers and economists continue to think the same way and follow the same patterns from one crisis to another.

Here's one reason: The world's top economists (and government officials) more or less all have the same background. They went to a handful of schools, studied under a few dozen of the same professors, have read the same books and mingle in the same circles. Oh, and, to a large extent, they're all white and male. That doesn't encourage diversity of thought. 

Neither does this film. I counted about a dozen puppets woven into the story, and nearly all of them depicted middle-aged (or older) white men. Activist-actor and Huffington Post blogger John Cusack makes several somewhat puzzling appearances in this movie, too. (No disrespect to Mr. Cusack.)  

Nick Rutter

Women and minorities are almost entirely left out of this film -- not unlike the way they've been left out of financial and economics professions. Yet, we know that women are slightly better at managing financial risk than men are. Study after study over the last five years has found that female financial managers consistently outperform their male peers. They think differently.

The two expert women the movie manages to talk to are Lucy Prebble, a playwright who once wrote a play about the collapse of Enron, and Laurie Santos, a Yale psychology professor who studies how monkeys make decisions. Neither have a background in economics, or in the 2008 crisis. 

But there is a long list of people -- who aren't white men -- who would have made great interview subjects for the filmmakers.

Where was Christina Romer, who wrote a paper in 2015 examining the impact of financial crises on advanced economies? Where was Brooksley Born, who warned against the danger of unregulated derivatives -- which ended up creating the 2008 financial crisis -- when she was head of the Commodity Futures Trading Commission in the 1990s? Where was Harvard economist Carmen Reinhart, who literally wrote a book called This Time is Different: Eight Centuries of Financial Folly? Where was Raghuram Rajan, India's top central banker, who warned of a potential financial crash way back in 2005, when he was working at the International Monetary Fund? 

If the world is to develop a framework for thinking differently about economics, it might help to start with more diverse sources.

4 Things You Need To Know About The Latest Jobs Report

The monthly jobs report came out on Friday, and things are pretty good overall.

The big headline numbers were great: The economy added 242,000 jobs in February, much higher than the 195,000 that economists estimated, and the unemployment rate remained at 4.9 percent, which is nice and low. 

But if you drill down into the data, the picture is a little murkier.

Here are four things we know about the economy from the details in this report:

1) Wages aren't growing much, and it's hard to say why.

Average hourly earnings were down by 3 cents in February, to $25.35. Year-over-year, wages are up about 2.2 percent. That's not great -- although, thanks to very low oil prices and low inflation, it's not terrible either. But it's worth asking why wage growth since 2010 hasn't been as robust as growth in previous recoveries. 

Shane Ferro/Huffington Post

2) Nonetheless, people are coming back into the labor force.

As we said earlier, the economy added 242,000 jobs this month. But perhaps more importantly, details in the household survey show that more than 500,000 entered the labor force by starting to look for work again. In order to be officially unemployed, a person must not have a job and must be looking for work. Discouraged workers, who have given up looking for jobs, aren't counted as part of the labor force. It's a sign of a healthy economy when those people start looking for jobs again, even if they don't find work immediately.

3) But the unemployment rate for blacks is twice the unemployment rate for whites.

The unemployment rate for whites in the United States is 4.3 percent. For blacks, it's 8.8 percent. This is an economic dynamic that has been persistent since the Labor Department started tracking unemployment by race back in the 1970s. The chart below is not really America's best look: 

Shane Ferro/Huffington Post

There's a huge racial disparity in the unemployment rate in this country.

4) There is a lot of growth in low-wage industries.

The retail industry added 55,000 jobs last month, and food service added 40,000. These have been some of the strongest growth industries over the last few years, which means the economy is adding a lot of low wage, service sector jobs. That said, the economy also added a lot of health care (38,000) and construction (19,000) jobs in February, which tend to pay quite well. 

How Americans Get Duped Into Buying Endangered Animal Items

You might be contributing to the decimation of endangered animal species without even realizing it. 

When illegal ivory, tiger pelts or rhino tusks make their way to markets and e-commerce sites, traffickers may try to conceal how the products were obtained. They'll use terms like "bone" or "walrus tusk" to describe ivory, duping retailers and customers alike. What's more, uninformed shoppers or tourists might not know that tortoiseshell and certain types of coral or wood are also part of this illicit trade network, which is estimated to be worth between $50 and $150 billion per year. 

Major companies across the e-commerce, retail and travel industries are now banding together to raise awareness and reduce the amount of illegal wildlife products Americans buy. 

Google, eBay, Etsy, JetBlue and Tiffany & Co are among the 16 firms committing to eliminating these products from their supply chains, the U.S. Wildlife Trafficking Alliance and the Obama administration announced Thursday.

“A lot of Americans are just not aware that they could be buying illegal products and adding to this global problem,” David J. Hayes, chair of the alliance and former chief operating officer at the Department of Interior, told The Huffington Post.

Each company will take action within its own sphere of commerce. Some will warn customers about the impacts of illegal wildlife products, while others will flag items on sale that potentially violate wildlife policies or provide educational videos on sustainability for travelers.

ChinaFotoPress via Getty Images

Illegal ivory and ivory products confiscated in China. 

Several online retailers have already taken steps to block harmful items from their sites. eBay and the online bidding platform LiveAuctioneers.com have banned illegal ivory sales. Etsy has banned all ivory and prohibited sellers to list goods made from threatened or endangered animal parts. 

"It's hard for the consumer to know what's legal and what's illegal, and it can be hard for the retailer to know," said Beth Allgood, U.S. campaigns director for the International Fund for Animal Welfare, a conservation nonprofit that has worked with eBay, Etsy and LiveAuctioneers to remove illegal ivory listings. "We can be partners to retailers who don't know all the regulations."

For JetBlue, the awareness campaign will primarily inform passengers traveling to and from the Caribbean and Latin America, said Sophia Mendelsohn, JetBlue’s head of sustainability. In videos to be shown on JetBlue’s flights, residents and small business owners from the region will speak about how sustainable tourism practices can support wildlife diversity.

“We want to stop this issue at its root cause,” Mendelsohn told HuffPost. “We’re going to cut out unwitting demand so there’s less profit in drawing out these natural resources, whether it’s for tech, necklaces or special meals” at local restaurants.

Lam Yik Fei via Getty Images

Leopard skins seized by Hong Kong customs officials.

Other corporate partners that have pledged to work with the alliance include Ralph Lauren and Royal Caribbean Cruises. The Association of Zoos and Aquariums will exhibit seized illegal wildlife products in its parks to highlight the threats posed to various species. Discovery Communications will produce virtual reality content focusing on trafficking and conservation. 

The household brands committed to this new effort will work to establish best practices for smaller names in the travel, e-commerce and retail industries.

“These companies are accepting industry leadership and making sure smaller ones aren’t involved in wildlife trafficking,” Hayes said. “These are true industry-wide efforts.”

Stockbyte via Getty Images

An illegal haul of rhino horn.

Awareness of wildlife conservation has been growing for some time. President Barack Obama issued an executive order to implement a wildlife taskforce in 2013. The corporate alliance announced this week is a result of that effort.

Public interest in the issue spiked last year following the killing of Cecil the Lion. The backlash against the Minnesota dentist who shot down the lion in Zimbabwe heightened scrutiny of trophy killings and spurred action from the travel industry.

American Airlines, United Airlines and Delta Airlines announced last summer that they would ban transport from Africa of the “big five” game animals -- lion, elephant, rhino, leopard and buffalo.

ASSOCIATED PRESS

A lion in an enclosure of the Lion Park, in Johannesburg, South Africa.

Warren Buffett Is Wrong About Climate Change

Warren Buffett doesn't want you to know how his empire is preparing to deal with the disastrous effects of climate change. In fact, he said in a letter released Saturday, he isn't exactly sure this whole "climate change" thing is real, anyway.

In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.

“It seems highly likely to me that climate change poses a major problem for the planet,” the 85-year-old wrote in the letter, released Saturday morning. “I say ‘highly likely’ rather than ‘certain’ because I have no scientific aptitude and remember well the dire predictions of most ‘experts’ about Y2K.”

Insurance companies take on losses after major weather disasters (think droughts, Hurricane Katrina and other big storms), so it makes sense they'd be concerned about climate change. If that's true, why would Buffett say he's not so sure this is real? Because skepticism is better business.

Buffett isn’t denying climate change, but rather using language climate deniers feel comfortable with and will likely cite in future attempts to derail environmental policy. Climate change affects Buffett's business: He owns a Nevada utility that has fought and won against solar development in that state, and his railroad, Burlington Northern, in large part depends on the demand for coal and oil.

Buffett argues in favor of seeing climate change as a likely risk to the world, but against the need for more oversight, transparency or regulation of his companies. It’s a position he’s taken before -- Buffett argued against designating reinsurers, of which he owns the world’s fifth-largest, as too-big-to-fail institutions. Though he said he never spoke directly to regulators about the issue, he made his views public. Regulators, thus far, have agreed.

Why Buffett's Words Matter

Markets, governments and companies aren’t properly pricing the risk of climate change. For instance, are beachfront homes in low-lying areas as valuable as their owners believe? Experts reckon that only once markets and others attach a price to the threat of climate change will the rest of the world finally move to limit the potential consequences. If insurers -- which must grow their assets in order to make good on their guarantees -- measure the potential losses they could incur as a result of climate change, they can then price that risk. Then everyone else could follow.

Buffett's views against disclosure put him in sharp disagreement with Bank of England Governor Mark Carney, who has said that financial markets can help limit the effects of climate change, but only if companies -- such as insurers -- supply the kind of information that Buffett doesn't want to disclose. 

In September remarks to the insurance industry, the chief overseer of the world’s third-largest insurance sector warned about the numerous economic and financial risks posed by climate change. Carney urged companies, particularly insurers, to start taking seriously their responsibility to measure their potential losses. Their own solvency could be at stake, Carney warned.

Insurance companies invest their money in places like the stock market. But “stranded" oil, gas and coal reserves, left in the ground due to the world’s commitment to halt rising temperatures, could render related financial assets worthless. Or the disruption of trade resulting from an extreme weather event could affect related investments.

Cynthia McHale, director of the insurance program for Ceres, a nonprofit group that pushes investors to pay attention to the financial risks of climate change, said in an interview earlier this month that neither insurers nor their government overseers have a good handle on the risks that climate change poses to insurers’ various financial assets.

McHale compared the situation to the one faced by big banks in 2008, when few sufficiently realized the magnitude of potential losses from the U.S. property bust. 

Weathering Heights

Buffett's case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”

First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett's company can hike premiums to better account for the heightened risk of climate change-driven losses.

Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”

But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.

NOAA

The U.S. experienced five different types of extreme weather last year. 

Munich Re, the world’s biggest reinsurer, estimated that extreme weather events led to $510 billion in insured losses from 1980 to 2011.

Carney said that according to Lloyd’s of London, the world’s oldest insurance market, the roughly 8-inch rise in sea level at the tip of Manhattan since the 1950s increased the insured losses from Hurricane Sandy by 30 percent in New York alone.

PAUL J. RICHARDS via Getty Images

A house in Staten Island, New York, hit in Hurricane Sandy. Scientists say we should prepare for more weather events like the massive storm.

Insurance companies should care about climate change from a selfish perspective if they want to stay in business. Carney has warned that insurers that jack up premiums or exit markets after realizing the potential losses associated with climate change could unwittingly cause the value of their own assets to shrink.

He also warned about potential losses from claims on policies written by insurers. For example, insurance companies could be forced to make massive payouts if victims of climate change successfully hold accountable companies that contributed to it. He likened the situation to the one faced by U.S. insurers stung by tens of billions of dollars in losses from asbestos claims.

In fact, Carney said that as a result of recent weather trends, some now estimate that insurers are undervaluing their potential losses by as much as 50 percent.

Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.

For example, governments may have to cover markets that insurers dump as a direct result of climate change, the Bank of England chief said, putting taxpayers on the hook.

Bloomberg via Getty Images

Mark Carney, the U.K.'s top central banker, says insurers may be undervaluing their potential risks by 50 percent. 

What Could Change If Insurers Opened Up About This Risk

Disclosing climate change information would improve policymaking, Carney said. It could make climate policy more like monetary policy, where officials who set interest rates often tinker with their stance based on markets’ reactions.

The Financial Stability Board, a global group of the world’s financial regulators, wants financial companies to disclose their risks, too.

Some state insurance regulators in the U.S. are demanding insurers take the threat posed by climate change into account when investing their customers’ money and underwriting insurance policies. Washington state’s insurance regulator, Mike Kreidler, has criticized some insurers for failing to take climate change risks seriously, arguing their own solvency was at risk.

Buffett sounded more alarmed by the prospect of climate change in 2007, when scientific evidence of the impacts of climate change was less well-understood. In his annual letter that year, Buffett wondered aloud whether the deadly and expensive hurricanes of 2004 and 2005 marked the first warning of a new type of climate.

“It would be a huge mistake to bet that evolving atmospheric changes are benign in their implications for insurers,” Buffett wrote in his letter.

He warned that it was “naïve” to think of Hurricane Katrina -- the costliest hurricane in U.S. history -- “as anything close to a worst-case event.”

“These could rock the insurance industry,” Buffett added.

 

Half Of New Cars Could Be Electric By 2040

Electric vehicles could make up half of all new car sales by 2040, as long as oil prices eventually increase, according to a study released Thursday by Bloomberg New Energy Finance.

The cost of the lithium-ion batteries that power electric vehicles is quickly decreasing, but sales suffered last year as oil slid below $30 per barrel, making gas-guzzling vehicles more affordable in the United States. If oil remains at rock-bottom prices, it could delay electric vehicles from becoming mainstream for at least the next four years.

“In a scenario where they become widespread in fleets and ride sharing scheme, new EV sales could reach 50% of new car sales by 2040,” Salim Morsy, senior analyst at BNEF, wrote in the study. “However, persistently low crude oil prices could also keep adoption as low as 25% by 2040.”

Electric vehicles currently make up about 1 percent of global annual car sales. Four major factors will determine whether they'll make up half of the market by 2040.

First, battery prices must continue to fall. This is likely to happen for a few reasons. Demand continues to be high, as more automakers release electric vehicles and the energy storage industry begins to pick up pace. To fill those orders, manufacturers are upping their production. Tesla, for example, is building a $5 billion factory in Nevada that will, at its peak, produce more lithium-ion packs per year than were created in the entire world in 2013.

“It’s very important, insofar as being a first move for establishing large-scale manufacturing assets globally,” Morsy told The Huffington Post on Wednesday. “But, relative to the install demand needed in the future to supply what we project to be demand, it is certainly not as important.”

Second, self-driving technology must become commercially viable. At the Consumer Electronics Show in Las Vegas last month, nearly every major automaker unveiled some kind of autonomous driving technology. And with good reason: Google is testing driverless, electric cars. Tesla just released a limited autonomous feature that allows its cars to steer themselves. Uber last year raided Carnegie Mellon University's robotics department, hiring away its top scientists to develop self-driving technology that will eventually replace its drivers. 

Analysts expect Tesla, Uber and other car companies to eventually own and operate fleets of autonomous vehicles. If they're advanced enough to drive themselves, they'll ideally be advanced enough not to use oil.

Third, oil prices need to bounce back. Unless the price of crude returns to $50 and $70, as some predict it will by 2020, electric vehicles are unlikely to exceed 5 percent of new sales in most markets for the next four years, Morsy said. Low price projections actually halve electric vehicles’ market share forecast. If current oil prices continue into the next decade, electric vehicles may only make up 25 percent of new car sales by 2040.

Fourth, the electric auto industry must overcome the fact that it’s navigating a combustion engine’s world. By 2030, BNEF expects charging ports to become standardized, much in the same way any vehicle on the road now can connect to a petrol pump at any gas station. Improved infrastructure -- and the normalization of plugging your car in nightly at home or at the office during the day -- will help the industry clear the range issue that has long dogged it. Just as no one likes having a dead smartphone, no one wants to be left with a car that runs out of battery.  

“By and large, by 2030, we think the infrastructure issues around charging EVs will be addressed,” Morsy said. “That means standardization around charging for vehicles -- at the moment, it’s not a standardized market -- as well as availability of charging points.”

Yet one of the biggest challenges to electric vehicle adoption may not be an economic headwind, but political sabotage. Last week, HuffPost reported that billionaire brothers Charles and David Koch are planning to launch a $10 million campaign aimed at once again killing the electric car. Still, at this point, the industry may be too far along.

Tesla Motors CEO Elon Musk, one of the most famous business leaders fighting to wean humanity off fossil fuels, summed it up nicely:

Sigh …https://t.co/VelOzAKIW6

— Elon Musk (@elonmusk) February 19, 2016

White House Predicts Robots May Take Over Many Jobs That Pay $20 Per Hour

The White House is worried that robots are coming to take your job.

In a report to Congress this week, White House economists forecast an 83 percent chance that workers earning less than $20 per hour will lose their jobs to robots.

Wage earners who receive up to $40 in hourly pay face a 31 percent chance they'll be replaced by robots, while workers who are paid more than $40 an hour face much lower odds -- about 4 percent -- of losing their jobs to automation.

The estimates underscore the myriad threats facing low-wage workers in America, who in recent years have been buffeted by stagnant wages, decreasing employment prospects and higher education costs if they wish to obtain additional credentials in pursuit of better-paying jobs.

In an economy increasingly defined by the yawning gap between rich and poor, White House economists worry that increased automation could exacerbate inequality as the well-paid enjoy the fruits of robot-fueled gains in productivity while everyone else is left to fight for scraps.

One study cited by the White House found that automation has particularly hurt middle-skilled Americans, such as bookkeepers, clerks and some assembly-line workers. A lack of additional training and education opportunities led these workers to settle for lower-skilled positions, and likely lower wages.

Already, the White House noted in its report, most economists reckon that changes in technology are "partially responsible for rising inequality in recent decades."

Robots and other advances in technology are forecast to displace a significant number of blue- and white-collar workers, according to 48 percent of experts surveyed by the Pew Research Center in 2014. They also said that robots and so-called digital agents will displace more jobs than they create by 2025.

Many experts surveyed by Pew said they are concerned that the rise of robots and other technological advances "will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order."

It's not a new worry. The famed economist John Maynard Keynes wrote in 1930 about "technological unemployment," or the theory that workers could be displaced due to society's ability to improve labor efficiency at a faster rate than finding new uses for labor.

But White House economists said they don't have enough information to judge whether increased automation will help or hurt the U.S. economy. For example, new jobs could emerge to develop and maintain robots or other new forms of technology.

"While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers," the White House said in its report.

There are two important questions, according to White House economists. First, if robots replace existing workers, will workers have enough bargaining power to share in their employers' newfound gains? Second, will the economy create new jobs fast enough to replace the lost ones?

Falling union membership -- some 11 percent of U.S. workers belonged to a union last year, down from about 20 percent in 1983 -- suggests that workers may not have much power to demand higher wages from employers who are automating them out of a job.

The economy could create enough new, good-paying jobs to help those displaced by robots, but the plight of manufacturing workers who have lost their jobs in recent decades as manufacturers moved abroad suggests that this, too, could be a challenge.

Instead, according to the White House, the key is to maintain a "robust training and education agenda to ensure that displaced workers are able to quickly and smoothly move into new jobs." With most Americans now financing higher education through debt -- about 1 in 8 Americans collectively owe $1.3 trillion on their student loans -- amid an era of sluggish wages, it's unclear whether higher debt burdens will lead to a better economic future.

White House Predicts Robots May Take Over Many Jobs That Pay $20 Per Hour

The White House is worried that robots are coming to take your job.

In a report to Congress this week, White House economists forecast an 83 percent chance that workers earning less than $20 per hour will lose their jobs to robots.

Wage earners who receive up to $40 in hourly pay face a 31 percent chance they'll be replaced by robots, while workers who are paid more than $40 an hour face much lower odds -- about 4 percent -- of losing their jobs to automation.

The estimates underscore the myriad threats facing low-wage workers in America, who in recent years have been buffeted by stagnant wages, decreasing employment prospects and higher education costs if they wish to obtain additional credentials in pursuit of better-paying jobs.

In an economy increasingly defined by the yawning gap between rich and poor, White House economists worry that increased automation could exacerbate inequality as the well-paid enjoy the fruits of robot-fueled gains in productivity while everyone else is left to fight for scraps.

One study cited by the White House found that automation has particularly hurt middle-skilled Americans, such as bookkeepers, clerks and some assembly-line workers. A lack of additional training and education opportunities led these workers to settle for lower-skilled positions, and likely lower wages.

Already, the White House noted in its report, most economists reckon that changes in technology are "partially responsible for rising inequality in recent decades."

Robots and other advances in technology are forecast to displace a significant number of blue- and white-collar workers, according to 48 percent of experts surveyed by the Pew Research Center in 2014. They also said that robots and so-called digital agents will displace more jobs than they create by 2025.

Many experts surveyed by Pew said they are concerned that the rise of robots and other technological advances "will lead to vast increases in income inequality, masses of people who are effectively unemployable, and breakdowns in the social order."

It's not a new worry. The famed economist John Maynard Keynes wrote in 1930 about "technological unemployment," or the theory that workers could be displaced due to society's ability to improve labor efficiency at a faster rate than finding new uses for labor.

But White House economists said they don't have enough information to judge whether increased automation will help or hurt the U.S. economy. For example, new jobs could emerge to develop and maintain robots or other new forms of technology.

"While industrial robots have the potential to drive productivity growth in the United States, it is less clear how this growth will affect workers," the White House said in its report.

There are two important questions, according to White House economists. First, if robots replace existing workers, will workers have enough bargaining power to share in their employers' newfound gains? Second, will the economy create new jobs fast enough to replace the lost ones?

Falling union membership -- some 11 percent of U.S. workers belonged to a union last year, down from about 20 percent in 1983 -- suggests that workers may not have much power to demand higher wages from employers who are automating them out of a job.

The economy could create enough new, good-paying jobs to help those displaced by robots, but the plight of manufacturing workers who have lost their jobs in recent decades as manufacturers moved abroad suggests that this, too, could be a challenge.

Instead, according to the White House, the key is to maintain a "robust training and education agenda to ensure that displaced workers are able to quickly and smoothly move into new jobs." With most Americans now financing higher education through debt -- about 1 in 8 Americans collectively owe $1.3 trillion on their student loans -- amid an era of sluggish wages, it's unclear whether higher debt burdens will lead to a better economic future.