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Posts Tagged ‘Energy’

If you were unable to join us for last weekend’s WorldAffairs 2011 conference or wish to experience it again, be sure to check out our video archive. There you can watch keynotes by Robert Reich, Arun Majumdar, David Sanger, James Zogby and Stephen Hadley as well as plenary sessions on economy and energy. View the sessions here.

Additionally, we will be broadcasting these sessions on the radio four nights next week, Monday, March 28 through Thursday, March 31, at 8 PM on KQED 88.5 FM.

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In their rush to gain an end of the year tax deal, elected leaders postponed hard choices. In the process, they denied the government the revenues it needs to either respond to unforeseen crises or deliver on promises made.

At the same time, wary corporate decision-makers reported that uncertainty over tax and fiscal policy had discouraged them from creating jobs or making R&D investments essential to prosperity.

As self- imposed constraints limit the agility of these two important sectors, a third—the non-profit sector—worries that the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act may have a cascading effect, further impoverishing state and local governments, shifting the burden of providing social services from the public to the non-profit sector. Moreover, its leaders fear that the estate tax provisions may reduce incentives for wealthy individuals to make the no-strings-attached donations and bequests that free the sector from the constraints of politics and markets.

Our tax structure has long reflected the value we place on the nonprofit sector’s ability to take risks and try out new ideas without fear of political or market reprisals. Income and inheritance taxes have encouraged donations and bequests, as well as the creation of tax-exempt foundations. As a result, our nation has a diverse charitable sector comprised of grantees and grantors who are tackling issues at home and across the globe. Free from the need to garner votes or generate profits, they needn’t test the political winds before offering services to the most marginalized Americans. Their reach extends to the developing world, where they have created or supported “social enterprises” with for-profit business models for providing off-grid communities with renewable sources of energy. And, globally they have even entered into public-private partnerships to effect high policy, as Warren Buffett did in making his $50-million gift to the UN’s politically-hampered and resource-strapped International Atomic Energy Agency. That grant will help to create a “nuclear fuels bank” upon which states committed to nonproliferation can draw to meet their energy needs.

Whether the tax deal will limit the freedom of non-profits to achieve such salutary outcomes is a matter of intense debate. But, it is up to us to ask and answer that question before the law’s review in 2012. An election year is a particularly poor time for political risk-taking. Policy-makers will need to be armed with the facts, and buttressed by a clear and unswerving sense of the sector’s purpose.

First the data: The law extends several provisions that can affect charitable giving—and provides time to gather data on their effect. It extends Bush-era tax cuts at all income levels and continues favorable treatment of capital gains and dividends. It delays a requirement that high-income tax-payers reduce their itemized deductions, including for charitable gifts. It exempts older taxpayers from treating up to $100k gifted to charities from their IRAs as taxable income. But, what worries some nonprofits is the 35% cap it places on inheritance taxes, while exempting estates of $5m or less. Many analysts argue that these estate tax provisions will remove incentives for bequests as well as giving-while-living aimed at reducing the size of the taxable estate. Others contend that estate tax considerations play a negligible role in the decision to give, but can influence the size of the gifts made. They draw on the 2004 predictions of the Congressional Budget Office, which anticipated a drop off in the number and size of bequests. Indeed fewer dollars were donated in this way during the phase-out of the estate tax, from 2008-2009. But, that year’s economic contraction is likely to have had far greater effect. More time in an improved economic climate can yield more data on which policymakers can base future choices.

And, the purpose – As we undertake that analysis, it is essential that we come to a shared view of the reasons for charitable organizations, and their tax-exempt status, in the first place. Americans value nonprofits because they can take actions and generate ideas that may be unwelcome, unpopular, and unprofitable in the short run, but produce true societal benefit over time. In the process, they can help identify and tackle truly hard problems when others cannot. Among the hard problems nonprofits can help address is the need to get our country on a financially sustainable course. Nonprofits have already contributed by sounding the alarm, providing analysis and offering policy options.

The deficit dilemma has helped to highlight the hurdles political and business decision-makers face when it comes to calling for sacrifice. Elected officials must respond to caricatures of their views repeated in 24 hour news-cycles. Business leaders are required to produce shareholder value as measured in quarterly returns. The nonprofit sector may be the only one that can afford to ask tough questions, test novel solutions and build consensus from the ground up.

In considering our tax laws in 2012 our goals should be straight-forward: to regain our ability to solve problems as a nation. Preserving the nonprofit sector’s freedom to help tackle society’s next hard problem is an essential first step.

—Jane Wales

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Ambassador Richard Jones, Deputy Executive Director of the International Energy Agency, joined the Council last week to present the IEA’s World Energy Outlook 2009. Released earlier this month, the report examines two scenarios: the Reference Scenario and the 450 Scenario. The first tracks changes in world energy supply and demand if government policies do not change, while the second shows what would happen were governments to dramatically alter their carbon emissions so that the level of carbon in the atmosphere is 450 parts per million (ppm). Ambassador Jones acknowledged the difficulty and cost of making the 450 scenario a reality, but said that we must aim for it nonetheless. Energy efficiency, using less energy to do the same amount of work, will be key and, he believes, a price is going to have to be put on carbon. He ended the presentation with positive news. Although China, Russia, and India are not members of the OECD or the IEA, they have been working with the International Energy Agency for the last few years to bring their policies and practices closer to those of its member states.

To listen to the entire presentation, visit our online audio archive.

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On Monday, November 23, the Council will be joined by Ambassador Richard Jones, Deputy Executive Director of the International Energy Agency. He will discuss the IEA’s current analysis of energy supply and demand and the implications for energy security and the environment. The Economist wrote about current and future demands for oil and included a chart displaying the IEA’s projections. Ambassador Jones will be speaking with energy expert David Victor, Professor at UC San Diego’s School of International Relations and Pacific Studies and Director of the School’s new Laboratory on International Law and Regulation.

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North American Forum 2009 News Release:

OTTAWA, CANADA
OCTOBER 6, 2009

TRILATERAL COOPERATION WILL SPEED RETURN TO STRONG
AND SUSTAINABLE ECONOMIC GROWTH, NORTH AMERICAN FORUM PARTICIPANTS AGREE

Leaders from business, government and academia today wrapped up three days of discussions in Ottawa, Canada, aimed at fostering improved relations and increased cooperation among the people and governments of North America.

This year’s meeting of the North American Forum focused on the need for Canada, Mexico and the United States to work together in responding to the global economic crisis and promoting a quick return to strong and sustainable growth. In addition, the Forum included special sessions on two critical issues: one on energy and the environment, and the other on transnational crime, arms smuggling and drug trafficking.

Click for more information.

The World Affairs Council of Northern California has served as the Secretariat for the North American Forum since the inaugural meeting which took place in October 2005 in Sonoma, California.

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Oil—The Resource Curse

Oil and its future across the world is the focus of the current issue of Foreign Policy. Peter Maass contributed a lengthy article highlighting key oil flash points from Nigeria to Venezuela, Kazakhstan to Saudi Arabia. Maass will join us next Thursday, October 8 to discuss these challenges in depth.  You can read his article, “Scenes from the Violent Twilight of Oil,” here.

To present an alternative view of the oil and energy resources debate, Rayola Dougher, Senior Economic Advisor at the American Petroleum Institute, will be at the World Affairs Council on Thursday, October 15. Dougher will discuss industry perspectives and the benefits that responsible policy in the energy sector can provide Northern California and the world.

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The construction of the Nabucco pipeline, slated for completion in 2012, is part of the effort to reduce European dependence on Russian gas amid concerns and fears that Russia, the supplier of between 30 and 40% of Europe’s natural gas, will use its economic leverage for political gains. However, recent developments in Turkmenistan, China, Iran, Turkey, and Europe itself, raise many questions and uncertainties regarding the future of the Nabucco pipeline. What are the new implications of and aims for building such a pipeline? Is continued construction necessary? What are the benefits and dangers of using the Nabucco pipeline—or rather the promise of its discontinuation—as a political bargaining chip? Steve LeVine, foreign affairs and energy correspondent for BusinessWeek and author of The Oil and the Glory and Putin’s Labyrinth, joined the Council and the Young Professionals International Forum (IF) last night to share his thoughts and insights into pipeline politics and Russia’s new energy diplomacy. Full program recordings will be available soon at our online archive. 

For more on pipeline politics, check out this article from Deutsche Welle on the recently signed agreement between Russia and Turkey to build the South Stream pipeline, a new rival to the Nabucco pipeline.

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