Economist 3/7/16

  1. On February 9th, divided five to four along partisan lines, the US Supreme court justices placed a stay on The Clean Power Plan, Barack Obama’s flagship environmental policy before its review in a federal appeals court.The plan gives orders to each state which, when totted up, should see the removal of 870m tonnes of carbon dioxide from power-station emissions by 2030 (as measured against 2005 levels). States maintain some flexibility over how and when to cut emissions. But the plan required each one to submit plans for doing so by 2018 and to show some progress on them by 2022.Then Antonin Scalia, a conservative member of the bench, died just days after it was announced. His demise may mean the survival of the Clean Power Plan.
  2. The United States Court of Appeals in Washington is considering a challenge brought by 27 mostly Republican states against the rule.The legal obstacles were expected; the fact that the regulation depends on the Clean Air Act of 1970, rather than on new legislation.If the federal appeals court rules in favour of the Clean Power Plan, as it may well later this year after oral arguments on June 2nd, an appeal will almost certainly be brought to the chief justices.As the regulation forms the core of America’s climate pledges in Paris last December—to cut emissions 26-28% below 2005 levels by 2025—this is a serious problem. American and Chinese co-operation made the UN deal possible in the first place.
  3. CAFÉ culture may be quintessentially Italian, but it took an American firm to make it global.On February 26th Mr Schultz announced a deal with Percassi, a retail developer, to open the chain’s first location in the country next year, in Milan.. An Italian developed the first espresso machine, but a Swiss firm, Nestlé, conquered the market for personal espresso-makers with its Nespresso system.Italy’s coffee firms are trying to grab more of the global industry for themselves. Italy’s re-exports of beans, mostly roasted, have more than doubled over the past decade increasing their share of global trade from 6.7% to 8.9%.Last year Lavazza, Italy’s biggest coffee firm, bought Douwe Egberts’ Carte Noire premium brand for €800m ($870m), making it the market leader in France. That followed an initial public offering of 40% of Massimo Zanetti, to raise capital for expansion. Zanetti owns a score of brands, including Boncafé, an Asian roaster; and it is buying a stake in Club Coffee, a Canadian firm with which it has developed compostable capsules. Besides continuing to develop its business-to-business side, Illycaffé is expanding its younger direct-to-consumer arm.Many Italian firms have rested on their laurels, he says, believing their product to be superior. That was once true, but the emergence of coffee-shop chains, and then of craft coffee brands, has changed that. Quality is now a given; branding and the ambience of coffee shops are ever more important.
  4. Isaac Nabwana has written, directed and edited more than 47 films since 2008, featuring everything from flesh-eating zombies to kung-fu kids. His set is the dusty yard outside his home in Wakaliga, a slum that sometimes has month-long power cuts. (Inevitably, the area is now called “Wakaliwood”.) The actors make their own costumes.Filmgoers in the slums like lots of violence. They also enjoy live commentary from a “ video joker”, who usually stands in the cinema keeping the tension high.Established Kampala distributors once refused to take Luganda-language films featuring unknown actors. Now they clamour to sell Mr Nabwana’s oeuvre. His sales team hawk DVDs door-to-door for 1,500-2,000 shillings (45-60 American cents), keeping 50% of the proceeds. But they have stiff competition: you can buy a DVD with four American or Nigerian films on it for 1,000 shillings.Mr Nabwana’s wife and accountant, estimates that 20,000 legitimate copies of a film are usually sold in that crucial first week and around 60,000 in the first month. They still lose money, though. Blank DVDs cost 600 shillings each. Copying equipment, electricity and transport are pricey, too. All the actors have day jobs.
  5. ON MARCH 2nd the UN agreed to the most sweeping sanctions it has yet imposed on North Korea in response to the country’s nuclear and missile tests of the past decade. The measures include inspections of all goods going to or coming from the country; a total embargo on all arms sales to it; and a ban on exports from it of coal, iron and other minerals. They were approved by all 15 members of its Security Council including Russia, after it delayed a vote to negotiate small changes to the text, and China, which opposes its ally’s nuclear programme but has been reluctant to punish it seriously.China is by far the country’s biggest trading partner. Most of the trade covered by the sanctions goes through China.The resolution was the product of nearly two months of delicate negotiation between America and China that began after North Korea’s fourth nuclear test on January 6th.Chinese enforcement of previous sanctions applied by the UN on North Korea has been poor. But the sanctions do not target China’s vital oil supplies to the North. And North Korea may find ways of mitigating their effects. It has been tapping new sources of cash, such as by sending more workers abroad to earn hard currency at logging camps in Russia and on construction sites in the Middle East—activities that are also not covered by the latest resolution.North Korea has proven adept at skirting sanctions by setting up front companies and shuffling ownership—shifting control of a trading company from a blacklisted government agency to one that is not, for example.

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