Carbon taxes and cap-and-trade schemes both add to the price of emitting CO2, albeit in slightly different ways.

Economists argue that, if the market is left to operate freely, greenhouse gas emissions will be excessive, since there is insufficient incentive for firms and households to reduce emissions. As such, they recommend applying the polluter pays principle and placing a price on carbon dioxide and other greenhouse gases. This can be implemented either through a carbon tax (known as a price instrument) or a cap-and-trade scheme (a so-called quantity instrument).

A carbon tax imposes a tax on each unit of greenhouse gas emissions and gives firms (and households, depending on the scope) an incentive to reduce pollution whenever doing so would cost less than paying the tax. As such, the quantity of pollution reduced depends on the chosen level of the tax. Continue reading →

A lack of first-time house buyers in the UK is a “cause for concern”, the Nationwide Building Society has said.

Its comments came as it said house prices in January were unchanged from a year earlier, although they had risen by 0.5% compared with the month before.

It said that there were 20,000 first-time buyers a month now compared with 32,000 before the financial crisis. Continue reading →

New figures by the Financial Ombudsman Service suggest banks are rejecting legitimate claims

Big banks have already set aside £12billion to compensate victims of what is the biggest mis-selling scandal in British banking history

Complaints to the banking watchdog have soared to unprecedented levels as banks refuse to settle thousands of customers’ PPI disputes.

The Financial Ombudsman Service is being swamped by 15,000 a week, two thirds of which are upheld, and is having to take on an extra 1,000 staff to cope with the deluge. Continue reading →

We recently took a look at some of the lessons the markets taught us last year. Now, we’ll dive into the remainder of the lessons, which help provide the right way to look at the returns we experienced (or possibly missed out on).

One of the major lessons we learned in 2012 was one we learn almost every year. Hedge funds should be avoided as investments. In 2012, the HFRX Global Hedge Fund Index returned 3.5 percent, and the index returned just 1.7 percent over the past 10 years. The table below sums up the evidence pretty well.

The HFRX Global Hedge Fund Index underperformed all the major equity asset classes in 2012. A portfolio equally weighting the 10 domestic and international stock asset classes would have returned 16.7 percent. And a 60 percent stock/40 percent bond portfolio with those weights for stock allocation would have returned 10.3 using five-year Treasuries. Continue reading →

Bank of America has begun moving more than $50bn of derivatives business out of its Dublin-based operation and into its UK subsidiary, according to people close to the operation.

The move, part of the group’s global drive to rationalise its operations, has been encouraged by regulators but will also allow BofA to benefit from tax breaks stemming from the accumulated losses in its UK business.

Bank of America, the world’s number 10 bank by assets, is currently one of the biggest banks in Ireland. Although its domestic Irish operations are small, it has traditionally routed a large chunk of its European operations – corporate lending and cash management as well as the derivatives book – through the Dublin subsidiary. BofA inherited the operation, MLIB, when it acquired Merrill Lynch at the height of the financial crisis. Continue reading →

Study reports that greenhouse gas emissions in Canada can be radically reduced by increasing energy efficiency, using electricity for heating and transportation and a wider use of bio-fuels.

Canada can reduce its greenhouse gas emissions to a fraction of current levels while maintaining or improving living standards and quality of life, according a new report.

The study, called ‘Low-Carbon Energy Futures: A Review of National Scenarios,’ is an international review released by the Trottier Energy Futures Project (TEFP).

The TEFP, a joint initiative of the David Suzuki Foundation, the Canadian Academy of Engineering (CAE) and the Trottier Family Foundation, is developing options for an 80 per cent reduction in Canada’s energy-related greenhouse gas emissions by 2050. Continue reading →

We don’t trust pensions so we’re not going to plough money into them when we have a gut feeling they are a ‘bad thing’. However, we do like property – the value of our home went through the roof for decades and it’s going to keep us warm in our retirement. So often we hear people state simply ‘my property is my pension.’

Falling
The Key Retirement Solutions Pensioner Property Index shows that in the last three months the total value of the properties held by the UK’s pensioners fell an incredible £3.64 billion. That’s around £787 each. Those over the age of 65 in Wales, Scotland and the South West saw the biggest values knocked off their properties. Continue reading →

Barclays begins the process of culling its investment bank ahead of the chief executive’s review of its operations, Sky learns.
Barclays employs around 10,000 people at its investment bank in London

London-based employees at Barclays’ investment banking arm have been put on notice that their jobs are at risk as the bank launched a process to slash a “substantial” number of roles.

I understand that staff were emailed earlier today to say that Barclays was commencing a consultation process to identify potential redundancies across its investment banking business. Continue reading →

Mortgage lending in the British economy is improving, according to the Bank of England, as lenders cut rates and make more money available.
The Bank’s report supported the view that the mortgage market is improving somewhat.

Rates on home purchase loans have dropped in recent months, the Bank said in its latest quarterly trends in lending report, with fixed mortgage rates for new lending falling 30 basis points in the fourth quarter.

The Bank said high street banks expected further cuts to mortgage rates — even though the major UK lenders thought house prices in 2013 would be little changed or fall slightly. Continue reading →

UK Chancellor George Osborne is to be urged to abandon inflation target as GDP pessimism grows.

British Chancellor George Osborne is to come under pressure to sacrifice inflation targets in order to kickstart the country’s growth, as official figures are expected to spark fears of a triple-dip recession.

The Ernst and Young Item Club forecasting group will call for an end to the British government’s inflation target of 2 percent and urge the Bank of England to do more to lift the UK’s economy out of its slump.

“The target has passed its sell-by date. The [UK] government could probably muddle through to the election with Plan A, but could do much better,” said Item’s chief economic adviser, Peter Spencer. Continue reading →