Wednesday, October 20, 2010

Hungary, Toxic Waste and Pension Funds

It's remarkably easy to conflate two issues, especially when the parallels are just so blindingly obvious.


On the one hand we have the chemical sludge which has erupted all over Hungary. This is (with no trace of irony) deep and serious doo-doo. It's not a minor little spill which will be cleared up as time goes by. It's a major ecological catastrophe which threatens to poison eastern and central European water supplies. In fact, it makes the Deepwater Horizon oil spill look like child's play.

However (just like Deepwater Horizon) there actually was nothing out of the ordinary in Hungary. All sorts of industrial plants have cess pools of toxic waste attached to them; in this case it was an aluminium plant but I remember an incident in Tennessee a few years back when a huge pile of ash from a coal fired power station burst its walls and flooded the neighbourhood. 

Looking at photos, the editor I covered the story for described the scene as Mordor, and he wasn't far wrong. ABC News in the US has done its bit to ram the message (or the paranoia) home. They've directed their readers to a map published by the Environmental Protection Agency (EPA) of all such cess pools across the US. "Heavens", you have to say, but there's a lot of them (pictured).

On the other hand, pension funds have suffered terribly during the financial downturn.

Last week, a widely reported study by the UN Principles for Responsible Investment (UNPRI) found that the ecological damage of all human activity in 2008 was worth $6.6tr, 20% larger than the $5.4tr decline in pension funds' value in the same period (during that financial crisis).

Pension funds act as aggregators of capitalist investment and there's a creditable argument that modern day capitalism wouldn't exist without them. Yet they have, by the nature of the beast, to have to take on risks and corral those risks into a holding area where they can be managed... Read more

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