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COP28: Why energy efficiency matters so much

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Hugely energy inefficient: cars waste about 80 percent of the petrol they burn
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If we are to save the planet, we are going to have to use energy far more efficiently.

Yet experts say this obvious measure has been long overlooked with COP28 set to hear calls Saturday for the annual rate of energy efficiency improvements to double by 2030.

– What does it mean? –

Energy efficiency means “using less energy for the same or even higher level of service” from machinery or technology, according to specialist analysts Enerdata.

It is not the same as using energy more sparingly, like turning your heating down to 19 degrees Celsius (66 Fahrenheit).

Conventional cars, for instance, waste up to around 80 of the energy contained in the petrol that powers them, the US Environmental Protection Agency estimates.

The International Energy Agency (IEA) said that efficiency gains could cut the efforts we need to make to be carbon neutral by 2050 by half.

“Often governments don’t give (it) as much focus as we think they should,” IEA expert Brian Motherway told AFP, and it could be crucial over the next decade.

“The more efficiently we use our energy the less we have to invest in solar panels, in nuclear, in grids,” he added.

– Has Ukraine war been a turning point? –

The huge spikes in energy prices last year after Russia’s invasion of Ukraine brought the subject sharply home to many.

Investments in better insulated buildings, public transport and infrastructure for electric vehicles shot up 16 percent last year to $560 billion, while 25 countries launched education campaigns.

But 2023 has seen a slight drop, the IEA said, with inflation and higher interest rates slowing investment just as record temperatures saw sales of air conditioners rise along with electricity consumption in a large swathe of the globe.

The IEA director Fatih Birol said governments at COP28 must agree to “double global efficiency… to around 4 percent per year to be in line with our climate targets.”

He said such a move would be a major signal to markets, investors and industry. The consequences are huge: doubling investment would save seven billion tons of CO2 — the annual emissions of the whole transport sector.

But while the IEA says that measures exist in three-quarters of the world economy, that technical advances are being made, progress on the ground has been uneven.

– Where can we make progress? –

“Everywhere!” say the experts, particularly in the built environment. Even in Europe, where the sale of heat pumps to replace gas and oil heating systems went up 40 percent in 2022, investment has been “flat”.

The likes of offices, hotels and shops account for a third of electricity consumption in winter in France. According to RTE, who manage its high-tension power grid, “savings of 20 percent could be made without much effort with a little awareness and technical management.”

Changing light bulbs in the United States to LEDs could save enough energy to run three million electric vehicles for a year or heat 2.6 million homes equipped with heat pumps, the IEA said.

Big business, which has been heavily hit by the rise in energy inflation, is taking the problem on. But small and medium-sized firms are struggling to do so, said the agency, even though over the next decade they could account for 70 percent of industry’s potential savings.

Air conditioning is another major issue, with sales rocketing in hotter countries as the planet warms. “Between now and 2050, 10 air conditioners will be bought every second,” said the IEA’s Motherway. “Yet the average air conditioner bought right now is literally half as efficient as the best one.”

– What can be done? –

For Jean-Pascal Tricoire, head of Schneider Electric, one of the world leaders in energy management, technology is the answer.

Home automation or “domotics” could save 30 percent of energy, often because users can follow their consumption more closely. “And in Europe, if all suitable roofs were equipped with solar panels, we could reduce our electricity needs by a fifth,” he argued.

Efficiency is particularly crucial in emerging and developing countries, where most population growth is expected.  Africa and India may have to build 100 billion square metres of new buildings in the next three decades.

But we are still building “a lot of homes with very poor energy efficiency levels, and of course the occupants will suffer — they’ll be too warm, or too cool,” said Motherway. “Even basic standards which don’t necessarily add to the building cost would make a huge difference,” he argued.

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WTO ministers struggle to forge fish, farm, digital deals

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The WTO meeting in the capital of the United Arab Emirates had opened on Monday with major disagreements between the body's 164 member states on key issues
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World trade ministers were locked in disagreement on fisheries subsidies, agriculture and digital customs duties as a major WTO conference entered its last scheduled day on Thursday.

With no signs of a breakthrough at the World Trade Organization’s 13th ministerial conference (MC13) in Abu Dhabi, officials pushed back to midnight its formal closing session, initially scheduled for 8:00 pm (1600 GMT).

The meeting in the capital of the United Arab Emirates opened on Monday with disagreements between the body’s 164 member states on key issues that dominated the agenda of the talks.

They include fisheries subsidies, agriculture and a moratorium on customs duties for digital transactions.

“Everybody is working with a very positive outlook… to try to see what’s the maximum we can get done,” Indian trade minister Piyush Goyal told journalists.

“I am very confident… we will come out with significant outcomes, particularly when it refers to areas of very deep concern to large numbers” of developing countries, he added.

– Fisheries deal ‘difficult’ –

Delegates sought trade-offs as part of a potential package deal that could allow for greater agreement, as was the case during the 2022 ministerial meeting in Geneva.

A new deal on fisheries was initially viewed as the most likely outcome of the MC13 talks.

But Goyal on Thursday said: “It is very difficult to get a resolution.”

After a 2022 deal which banned subsidies contributing to illegal, undeclared and unregulated fishing, the WTO hopes to conclude a second package focusing on subsidies which result in overcapacity and overfishing.

A draft text that was meant to be circulated on Wednesday is still facing delays, said a source close to the negotiations who spoke on the condition of anonymity.

The overall negotiations “are a bit like a rollercoaster,” the source said.

– E-commerce regulations –

Another sticking point is over the extension of an e-commerce moratorium, which EU trade commissioner Valdis Dombrovskis on Thursday called “vital” to economic growth.

Since 1998, WTO members have agreed not to impose customs duties on electronic transactions.

The moratorium has been extended at most ministerial meetings since then, but objections by India and South Africa are now throwing it into jeopardy.

When asked if India would compromise on an extension, Goyal said: “Let’s see what the others are budging on.”

He warned, however, that an extension can’t be “taken for granted.”

On food security, Goyal said he was “confident” progress could be made on permanent rules governing public stockholding of food reserves — a key demand of India.

A “solution can be achieved,” Goyal said.

Big questions remain over how the outcome will address the issue of dispute settlement reform — a main point of contention between the United States and India.

Washington, under former President Donald Trump, brought the dispute settlement system to a grinding halt in 2019 by blocking the appointment of new judges to the WTO’s appeals court, its highest dispute settlement authority.

During the last WTO ministerial in 2022, member states reached a commitment to having a fully and well-functioning dispute settlement system in place by 2024.

“What we’re going to see, I think, is a quite succinct (MC13) declaration which is… not going to sort out the substance,” said a Western diplomatic source who asked not to be named.

“It will recognize the progress we have made and that there is more work to be done, and that we have committed ourselves to get… the system up and running in the course of this year.”

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Universal-TikTok feud ramps up as more songs come down

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Taylor Swift is among the Universal Music Group artists whose music has been removed from TikTok
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Universal Music Group has lambasted TikTok’s approach to AI as the feud between the two companies over song royalties escalates and popular music is expunged from the social media platform.

Earlier this month music including by Taylor Swift, The Weeknd and The Beatles left TikTok, after a breakdown in negotiations with Universal over renewing their licensing agreement, which expired January 31.

Then this week TikTok began stripping music from all artists connected to Universal’s vast publishing catalog, per the multinational music company’s requirement, with all songs written by Universal Music Publishing Group’s songwriters subject to removal.

That affects any artist who may have a publishing deal with the label — examples include Harry Styles and SZA — even if they aren’t signed under the UMG recording umbrella.

“We are in the process of carrying out Universal Music Group’s requirement to remove all songs that have been written (or co-written) by a songwriter signed to Universal Music Publishing Group, based on information they have provided,” said TikTok in a statement.

Universal fired back late Thursday in an open statement to its songwriters, saying TikTok has “not agreed to recognize the fair value of your songs.”

Along with royalties, Universal said TikTok is “refusing to respond to our concerns about AI depriving songwriters from fair compensation, or provide assurances that they will not train their AI models on your songs.”

“Every indication is that they simply do not value your music.”

Universal’s publishing arm is the second largest of its kind worldwide, meaning the feud’s impact is far-reaching.

A piece of music has two copyrights: one for the recording itself, governed by a label, and another for lyrics and composition, managed by a publisher.

That means when it comes to the Universal-TikTok battle, a record from another company like Sony or Warner could come down if a Universal writer worked on the song.

The fallout from the stalemate has triggered concern among songwriters, producers and others in the industry who rely on TikTok as a promotional tool, especially for emerging artists who increasingly count on it for exposure in the industry.

“We understand the disruption is difficult for some of you and your careers, and we are sensitive to how this may affect you around the world,” Universal continued in its statement. “We recognize that this might be uncomfortable at the moment.”

“But it is critical for the sustained future value, safety and health of the entire music ecosystem, including all music fans.”

Owned by Chinese company ByteDance, TikTok is one of the most popular social media platforms globally, with more than one billion users.

TikTok previously had accused Universal of putting “greed” above artists’ interests, while Universal has said TikTok is “trying to build a music-based business, without paying fair value for the music.”

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Riding high on AI, Nvidia is no bubble, says Wall Street

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Jensen Huang, cofounder and CEO of Nvidia, waves as he arrives for a media roundtable in Kuala Lumpur on December 8, 2023
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The emergence of AI bots like OpenAI’s ChatGPT and Google’s Bard has fueled a massive rise in share prices of chip-making juggernaut Nvidia, with its skyrocketing stock now making it the world’s fourth biggest company by market capitalization.

And for Wall Street, it’s no bubble.

Between the launch of ChatGPT on November 30, 2022, for example, and the market close on February 23, Nvidia’s share price increased fivefold, lifted to investor heaven by an insatiable hunger for so-called generative artificial intelligence.

That day Nvidia also crossed the symbolic valuation of $2 trillion, a threshold only reached by Microsoft, Apple and oil giant Saudi Aramco.

The journey has been nothing but mind boggling for a company that doesn’t even rank among the world’s top 150 firms in terms of sales, and barely in the top 1,000 in terms of employees.

On paper, this hot streak is reminiscent of the dot-com bubble, which saw the share price of fiber networking giant Cisco rise eightfold in 18 months, to the point of becoming, for a few minutes, the world’s most valuable company in terms of market capitalization in March 2000, before the tech bubble burst.

“In AI, there might be some names out there that might be getting a bit ahead of their skis from a valuation perspective, and those stories are going to work themselves out over time,” CFRA analyst Angelo Zino told AFP.

“But on the Nvidia side of things, it’s more fundamentally driven,” he said, without the “type of hype you had previously.”

Unlike the frothy days before the bubble popped in 2000, Nvidia’s actual annual net income (up an eye-popping 581 percent year-on-year) is on par with the stock price, said Larry Tentarelli of Blue Chip Daily Trend Report, a research firm.

For analysts at Wedbush Securities, the relevant parallel is not with 2000 and the end of the dot-com bubble, but rather with 1995, when the dot-com boom began.

– ‘Years ahead’ –

Despite appearances, Nvidia’s success is not out of the blue, but rather years in the making.

At the root of this 30-year-old company’s success are graphics processors or graphics cards, known as GPUs (graphics processing units) — chips with far greater computing capacity than conventional microprocessors (CPUs).

Initially developed to improve the graphics quality of video games, the company run by Jensen Huang figured out the technology was perfectly suited for developing the large language models (LLMs) that underpin generative AI interfaces such as ChatGPT.

Despite initial skepticism from Wall Street, Nvidia went down that road, years before programs like ChatGPT exploded onto the scene.

Now Nvidia’s rivals have set off in pursuit, and several of them, notably AMD and Intel, are already marketing their own AI-oriented GPUs, while Apple, Microsoft and Amazon have also developed chips with AI in mind.

But Nvidia “is years ahead” of its competitors, explained Tentarelli.

“The only real risk for Nvidia is if for some reason they run into some unexpected delay… if they can’t produce enough of these GPUs,” he said.

Unlike its rivals Intel, Micron and Texas Instruments, Nvidia, like AMD, does not manufacture its own semiconductors, but uses subcontractors, mainly the Taiwan Semiconductor Manufacturing Co.

Given the geopolitical concerns with Taiwan and China, this could be a potential weak spot, but Tentarelli attributes only a very low probability to a crisis.

– Beat Apple? –

For the time being, Zino argues, Nvidia’s business model, with no production site, is more of a strength than a weakness, as it enables it to generate higher margins and adjust its volumes more easily to demand.

When they scan the horizon, investors see no sign of a slowdown in demand for AI equipment.

For Wedbush securities, “the AI Revolution starts with Nvidia and in our view the AI party… is just getting started.”

Analysts are expecting, on average, earnings to almost double again this year compared with 2023.

“Nvidia could definitely pass Apple in 20 or 24 months and maybe sooner if it stays at the growth rate that the industry is expecting,” Tantarelli said.

As for Microsoft, the other member of the $2 trillion market cap club?

That’s a taller order, as Microsoft “is also doing a very good job” in AI, Tantarelli said.

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