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Daily Archives: August 17, 2022

Charts: The Cost of Building a House in the U.S. Remains High

Source : Mish Talk

Charts: 63,000 U.S. Home-purchase Agreements Were Called Off in July

Source: REDFIN and Bloomberg

Humour: News in Cartoons

The Search for an Air Conditioner That Doesn’t Destroy the Planet

Rebecca Heilweil wrote . . . . . . . . .

A growing number of startups are tinkering with the science behind cooling. Hildegarde/Getty Images
Amid a growing number of heat waves, air conditioners have become a lifeline. Because these appliances are critical to keeping people cool — and protecting them from dangerously hot weather — the International Energy Agency (IEA) estimates that there may be more than 5 billion air conditioners across the planet by 2050. The problem is that while air conditioners do keep people safe, they’re also a major contributor to climate change.

So why not rethink the AC entirely?

The basic science of air conditioners hasn’t changed much since they were first invented about a century ago, but these appliances have become a bigger and bigger threat to life on Earth. Most modern air conditioners consume a massive amount of energy, strain the electrical grid during sweltering summer days, and use harmful chemicals, called refrigerants, that trap heat in the atmosphere. That’s why, along with a vast number of other structural changes the world will need to make to fight climate change, some experts say it’s time to change how we cool our homes.

“We need to design our buildings in a way that consumes less energy. We need to insulate them better. We need to ventilate them better,” explained Ankit Kalanki, a manager at Third Derivative, a climate tech accelerator co-founded by the sustainability research organization RMI. “These strategies are very important. We can reduce the air conditioning demand in the first place, but we cannot eliminate that.”

The race to redesign the AC is already on. The IEA predicts that within the next three decades, two-thirds of the world’s homes could have air conditioners. About half of these units will be installed in just three countries: India, China, and Indonesia. The extent to which these new air conditioners will exacerbate climate change hinges on replacing the cooling tech we currently use with something better. Right now, ideas range from retrofitting our windows to more far-out concepts, like rooftop panels that reflect sunlight and emit heat into space. To succeed, however, the world will need to boost the efficiency of the appliances we already have — as quickly as possible — and invest in new tech that could avoid some of AC’s primary problems.

The AC’s noxious environmental impact stems from its core technology: vapor compression. This tech involves several components, but it generally works by converting a refrigerant that’s stored inside an AC from a liquid to a gas, which allows it to absorb heat, removing it from a room. Vapor compression uses an immense amount of electricity on the hottest days, and there are growing concerns that the technology might eventually overwhelm the grid’s capacity to provide power. And hydrofluorocarbons, the chemical refrigerants that many ACs use to soak up heat, are greenhouse gases that trap lots of heat in our atmosphere when leaked into the air. The challenge is that, for now, vapor compression ACs are still a critical tool during deadly heat waves, especially for high-risk populations, young children, older adults, and people with certain health conditions.

Technology to build cleaner, more efficient air conditioners does exist. Two major AC manufacturers, Daikin and Gree Electric Appliances, shared the top award at last year’s Global Cooling Prize, an international competition focused on designing climate-friendly AC tech. Both companies created ACs with higher internal performance that used less environmentally damaging refrigerants; the new units could reduce their impact on the climate by five times. These models aren’t yet on the market — Gree plans to start selling its prototype in 2025, and Daikin told Recode that it hopes to use the new technology in future products — but the IEA estimates that using more efficient ACs could cut cooling’s environmental impact by half.

Another strategy is to double down on heat pumps, which are air conditioners that also work in reverse, using vapor compression to absorb and move heat into a home, instead of releasing it outside. Heat pumps usually cost several thousand dollars, though the Inflation Reduction Act includes a proposal for a significant heat pump rebate, and President Joe Biden has invoked the Defense Production Act to ramp up production. Experts have argued installing heat pumps is critical to another important climate goal: transitioning away from fossil fuel-powered furnaces, which are an even bigger source of emissions than cooling. The holy grail of HVAC would be a heat pump that could provide both heating and cooling but isn’t dependent on vapor compression.

“Heat pumps are a critical technology in reducing our energy consumption, enhancing grid reliability and the utilization of renewable power, reducing emissions, reducing our reliance on foreign sources of energy, and lowering utility bills for US families and businesses,” Antonio Bouza, a technology manager at the Department of Energy, told Recode. The next step, he said, is reducing emissions even further by designing heat pumps that don’t rely on refrigerants, as current vapor compression systems do.

Another challenge, though, is that heat pumps are not the easiest appliance to install, especially for renters, who don’t necessarily have the money or ability to invest in bulky HVAC systems. To address this problem, a company called Gradient has designed a heat pump that easily slides over a windowsill — it doesn’t block light — and currently uses a refrigerant called R32, which is supposed to have a (comparatively) low global warming potential. Gradient recently won a contract to install its units in New York City public housing.

A fleet of new companies want to make even bigger changes to how we cool our homes. One of these startups is Blue Frontier, which is backed by Bill Gates’s investment fund, Breakthrough Energy Ventures, and plans to start selling its futuristic AC units in 2025. The company’s technology uses a specialized salt solution that can release water into the air — or draw it out — which allows the AC to control its temperature. This approach, Blue Frontier claims, can save up to 90 percent of the energy used by a traditional AC and avoids draining electricity from the grid during peak hours.

“By eliminating air conditioning that’s a problem for the grid, it allows the grid to actually reduce the costs of power production [and] utilize renewable energies in a more effective manner,” Daniel Betts, the CEO of the company, told Recode. “So not only do we save energy, but we are saving energy at the moments that are most critical.”

Scientists and startups are playing with other concepts, too. One path, which the company Transaera is taking, is to develop new materials that efficiently soak up moisture from the air, almost like a sponge, so that air conditioners can work more efficiently. A similar concept is to take advantage of solid-state technology. This idea would use solid materials to absorb heat, and some research on it has support from the US Department of Energy. The British firm Barocal is developing a type of plastic crystal that could do this and also help control temperature. One company, Phononic, has developed a solid-state core that could be integrated into existing HVAC systems. The company says its first commercial installation will be next year.

While many of these technological breakthroughs are promising, the movement to revolutionize air conditioning still faces some major challenges. Right now, AC manufacturers primarily focus on meeting minimum performance standards, rather than competing for higher levels of efficiency. Consumers also tend to buy air conditioners based on their sticker price, not an AC’s overall impact on their energy bills. And even though there are a growing number of AC-focused startups, the industry is still dominated by a small handful of large companies, all of which primarily focus on far-from-ideal vapor compression tech.

“We don’t install more efficient technologies unless we really need to, or it’s mandated by a government or another organization,” said Eli Goldstein, the co-founder and CEO of SkyCool, a startup developing tech that could be used to send heat from buildings and ACs into space. “Ultimately, the key is going to be dollar investments from both private and public enterprises to deploy the technologies.”

Other changes, like better insulating our homes and installing batteries throughout the grid, are still critical in the fight against climate change. However, all signs indicate that humans will continue to buy air conditioners, not just to feel comfortable but to survive increasingly devastating weather brought on by climate change. This is especially true as temperatures and incomes rise in some of the world’s largest countries and fastest-growing economies. In India alone, demand for cooling tech was already growing between 15 and 20 percent every year, as of 2020.

This surging demand creates a promising, but incredibly risky, situation. There’s the possibility that the growing need for cooling spurs a race to build the best AC technology and, ideally, tech that could also displace fossil fuel-based heating. But if better, more affordable AC doesn’t come to market fast enough — especially for the vast number of people in developing countries who will buy these appliances in the coming decades — significantly worse air conditioners will take their place, warming the planet even faster.

Source : Vox

China’s Property Crisis Threatens to Drag Down Steel Industry

China’s steel industry is entering a precarious new era as a worsening property crisis imperils demand and Beijing’s construction-led growth model looks increasingly untenable.

Almost a third of China’s steel mills could go into bankruptcy in a squeeze that’s likely to last five years, Li Ganpo, founder and chairman of Hebei Jingye Steel Group, warned at a private company meeting in June. “The whole sector is losing money and I can’t see a turning point for now,” he said, according to a transcript of the gathering seen by Bloomberg News.

The real-estate crisis has ballooned this year, engulfing developers to banks, and forcing Beijing to soften its growth ambitions. Steel mills that churned out more than a billion tons last year, around half of global output, are highly vulnerable to the slump that’s also hit iron ore prices and miners from Australia to Brazil.

After more than a year of property pain, the outlook is worsening as the government baulks at big bailouts and keeps stringent debt rules in place. A steel purchasing managers index for July tumbled to its lowest reading since 2008, and Goldman Sachs Group Inc. sees demand down by 5% this year. The property sector accounts for at least a third of Chinese steel demand.

Beyond the current crisis, the industry is facing profound challenges as the growth model that’s sustained China’s economy for decades shows signs of strain. President Xi Jinping looks reluctant to deploy the levels of infrastructure spending and financial stimulus that revived the sector after the great financial crisis and the property market downturn in 2015-2016.

“This time really is different,” said Leland Miller, chief executive officer of China Beige Book International, which monitors the steel industry. “With property having lost its mantle as the preeminent growth driver, key commodities like steel no longer have the benefit of endless credit access.”

In the short term, the major obstacle for steel is the large stock of unfinished properties, highlighted by a recent wave of mortgage boycotts. Prices of construction steel have also plunged, with rebar — twisted steel rods that strengthen concrete — falling to a two-year low last week. That’s even as output has dropped to the lowest in Mysteel data that goes back to 2015.

Tough Times Ahead

“Demand is slipping fast,” Xiao Zunhu, chairman of state-owned Hunan Valin Steel Co., told an industry meeting in Beijing last week where speaker after speaker warned of difficult times to come. Markets “will remain complicated and tough” this half and stimulus measures need time to take effect, Chen Shaohui, vice president at Jiangsu Shagang Group, said at the same meeting.

The demand weakness has flowed through to key steel-making ingredient iron ore. Futures in Singapore fell for a third day on Tuesday, and are down more than a third from a peak in early March. China’s steel industry is in “sharp contraction on all fronts,” Liberum Capital said in a note on Tuesday, in which it maintained sell recommendations for miners BHP Group Ltd., Rio Tinto Plc and Antofagasta Plc.

Steelmakers may have limited room for maneuver when it comes to trimming output. Local governments are putting pressure on mills to maintain activity to prevent weakness in economic data, according to executives from four producers, who asked not to be identified as the matter is sensitive.

Steel mills were once seen as champions of China’s economic expansion, with some growing from rural casting workshops to multi-billion dollar conglomerates. While real-estate activity should stop contracting at some point, the chances of it delivering the kind of booms that buoyed Asia’s largest economy over the past few decades seem slim.

“The third quarter will be the most difficult time for the industry,” Zhu Guosen, vice director at Shougang Group’s technology research institute, said at the meeting in Beijing. “We should abandon any illusions about the market and focus on what we can do ourselves.”

Source : Yahoo!

Infographic: Brand Loyalty is Declining for Most Luxury Automakers

See large image . . . . . .

Source : Visual Capitalist

China Can’t Afford to Invade Taiwan

George Magnus wrote . . . . . . . . .

Should Nancy Pelosi have gone to Taiwan? The question might preoccupy America for months ahead of the November mid-term elections. But the truth is her visit did nothing to alter China’s stance towards Taiwan. The Speaker of the House was merely playing a walk-on part in an unfolding geopolitical drama. Another event would have triggered Beijing’s hostile reaction. The pressing question is not about Pelosi — but about what China will — and can — do next.

The live fire military drills around Taiwan that China launched in response to Pelosi’s visit — which included the firing of ballistic missiles over the island — were scheduled to end on Sunday. But on Monday morning, this dress-rehearsal of coordinated manoeuvres for a potential future invasion had shown no sign of stopping. China also announced on Friday that it was cancelling high-level military consultative talks with the United States, and suspending cooperation talks on illegal immigrants, narcotics and climate change, among other things.

We can probably expect military matters to cool off in the coming weeks, ahead of the 20th Congress of the CCP in autumn. But for the moment we can be sure of only two things. First, China is bound to take further opportunities to put pressure on Taiwan using both commercial sanctions and military or diplomatic tactics. Second, for the time being, China is likely to avoid anything that might push its own faltering economy into a tailspin.

Any serious escalation of the tension could have grave implications for Beijing. Not only would it limit or cut off China’s access to semiconductors and Western technology, but it could see Chinese firms subject to further sanctions. It could also compromise trade with China’s biggest markets, namely the United States, the EU and developed Asia. China is dependent on the rest of the world for more than 80% of its semiconductor demand, three-fifths of which comes from the US, Japan and the EU. The Taiwan Semiconductor Manufacturing Company produces almost all of the most advanced varieties.

The Chinese economy, meanwhile, is in bad shape. The target for economic growth this year cannot be met, and the property market, which accounts for over a quarter of GDP, is in disarray. Youth unemployment has shot up to 20%, and the labour market is far weaker than official statistics portray. Zero Covid policies, rigorously pursued both for public health and social control purposes, are stifling demand and turning foreign firms away from future investment in China. The nation’s development model is failing, but the government has no plausible strategies to re-energise it — or at least, none that is politically acceptable.

Beyond its borders, China faces the most extreme challenges since Mao, partly due to the imposition of commercial controls, restrictions and sanctions by foreign governments, and partly because of its own policies of disengagement and self-reliance. Its “no limit” friendship with Russia has only made things worse, and its behaviour towards Taiwan could also go awry. China may end up alienating not just the usual suspects — Japan, India and Australia — but also nations that prefer to stay above the fray, such as South Korea, the Philippines and Vietnam. They could be drawn further into security alliances championed by the United States — which is exactly what China’s Global Security Initiative is meant to stop.

Given these circumstances, there’s little chance China will stage any form of assault on — or wage all-out war with — Taiwan anytime soon. But that’s not to say it will end the so-called “grey-zone” warfare that began before Pelosi’s visit. China could pressure or occupy any of the 100 islands that belong to Taiwan, especially the populated ones in the Taiwan Strait such as Matsu, Kinmen and Penghu, the first two of which are just 10km off the Chinese coast. It could from time to time warn off air and sea traffic in the form of a quarantine, trying to regulate the inflows and outflows of people and goods. In extremis, it might even try to blockade Taiwan, restricting its access to imported energy (which meets about four-fifths of the island’s demand for energy), LNG (which provides most of Taiwan’s electricity), or even certain foodstuffs and raw materials.

The aim would be to force the Taiwanese government to in some way cede autonomy to the CCP. The likelihood of this happening is about nil — and Beijing knows it. Local Taiwanese elections later this year, and national ones in 2024, may further strengthen the country’s backbone and remind Xi Jinping that bullying and coercion are leading China down a blind alley.

At every point, then, China runs the risk of incurring greater economic and political pushback by putting further pressure on Taiwan. As it is, global firms are starting to reconsider their supply chain structures and investments in China, and a deepening Taiwan crisis would create major strategy headaches for foreign firms. No company wants to be caught in the crosshairs of conflicts, sanctions, higher insurance costs and conflicted legal positions. Decoupling, and the rebuilding of global supply chains, are both likely to increase as a result.

For the same reason, China’s desire to de-Americanise its own supply chains, sanction-proof itself, and re-orientate markets towards domestic firms, will likely increase. But following this path would probably take China further away from its quest for higher productivity and undermine the nation’s lofty economic aspirations. Engagement with the global economy was the essential handmaiden of China’s economic eruption; disengagement is likely to reverse that process.

Besides, if China decided to introduce something as severe as a blockade, in an attempt to sap Taiwan’s political will and stifle its economy, it would almost certainly trigger not only sanctions but also resistance. Under the 1979 Taiwan Relations Act, the United States would consider boycotts and embargoes a threat to both global and domestic peace and security. This doesn’t guarantee American intervention to break the blockade, or tit-for-tat measures, but there is a strong chance that Washington would react — and that other Asian nations would fear for their security.

Short of outright invasion, therefore, it does not seem that China could really mount any campaign that would force Taiwan to capitulate. With every move to escalate tension, moreover, Beijing would confront political, commercial and perhaps even low-level military pushback — and significant economic consequences.

But what if circumstances changed? What if Xi went all in, and ordered an assault on the island? Even then, his chances of a successful occupation are slim. Whether China has the military capacity and logistics, now or in the future, is almost beside the point. The issue is whether it has the political will. As we know from Russia, the best laid plans can go awry, and in Taiwan an invading army would meet with spirited local resistance from 23 million people. Suppressing them would make China a pariah state for years, if not decades. The Chinese Dream would become a nightmare.

The CCP has placed huge importance on “reunifying” the renegade province of Taiwan with the mainland, but it would exhaust its political capital by mounting an invasion — successful or not. No one can dismiss the possibility that it might one day happen — especially if domestic pressures caused CCP rule to fray. But the party may well take a leaf out of the Western playbook by kicking this can down a long road, risking unknowable consequences at home.

Source : UnHerd

Read also at Foreign Policy

Why Doesn’t China Invade Taiwan? . . . . .