I divide my time between the Caribbean and Britain. When you have the option of endless summer, the predictable grey of London may seem an odd thing to look forward to. But my island in the sun (as opposed to my other soggy, snowy island) is struggling through a long drought. We have bee reduced to queuing for showers and washing clothes in water gathered from garden hoses.

Imagine a backed up toilet in 30-degree temperatures and 90% humidity: yells of “Don’t flush!” because someone has only pissed, and you sure as hell can’t bother to carry buckets of water through the house just for that. Long showers never felt so good as when I arrived back in London, settling to fill the kettle as full as I bloody well like.

Such a contrast reveals a major fault line dividing rich and poor societies; in the ‘South’, we still live largely at the mercy of nature. In rich countries, we’ve tamed it. El Nino is the proximate cause of the Caribbean’s woes, but the fundamental cause is a degraded infrastructure resulting from decades of underinvestment – pretty much par for the course in a poor country.

In a country like Jamaica, you always feel like you’re walking on a cliff-edge: come a hurricane or a Pacific weather pattern, you get pushed over.

But this precariousness may not last forever. When Hopenhagen morphed into Nopenhagen last month, pessimists groaned that the lands which will suffer most from climate change are those which did the least to cause it – that is, poor, tropical ones. But optimists insist the Copenhagen summit merely postponed the inevitable. They argue that sooner or later we’ll have no choice but to agree a global carbon-emission regime.

When that happens, the very poverty of the Third World will become an asset. The same underdevelopment which leaves a poor country praying for rain, leaves it with a lot of what economists call unused capacity. In this case, call it pollution capacity. Unused wildlife resources can be cordoned off and sold for offsets, and the returns on renewable energy will be much greater in poor countries, simply because the infrastructure must be largely created anew: opportunities aplenty, lads.

We may well be sitting on the cusp of a great wave of new investment in developing countries. The hiatus, as the world community regroups to try and forge a new regime, could be used by adventurous entrepreneurs to get ready for it.

Come they will. And that will pose a challenge for Third World governments. As Mike Smith noted in his recent feature on farmland in developing nations, easy-come doesn’t always mean easy-go.

The growth of this trend has been sudden and unprecedented. Since 2004, nearly 10,000 square miles of land across Ethiopia, Ghana, Madagascar, Mali and Sudan has been leased to overseas investors; in the first half of 2009, an area equivalent in size to all the arable land in Europe was leased across the world to investors from developed world economies. New deals are occuring every week: in the last few days there have been agreements between Nigeria and Thailand over rice production, and talks between Saudi Arabia and African nations to develop farmland, to add to Saudi’s multimillion investments in the Philippines.

Companies at the forefront of this property land-grab include the US asset management company BlackRock, who have earmarked US $30 million for the acquisition of farmland in areas from Sub-Saharan Africa to the UK, and banking giants Deutsche Bank and Goldman Sachs, who have invested in both pig breeding operations and chicken farms in China. And it’s not just individual companies fronting up capital: the Indian government is giving financial incentives to empower 80 companies such as Karuturi Agro Products Plc to buy land in Ethiopia and other African countries. So far these companies have invested £1.5bn - and this trend looks set to continue as Africa is said to have 807m hectares of cultivable land, of which just 197m is currently being cultivated.

In the July 2008 newsletter of the Canadian private equity firm Ag Capital, Reza Vishkai of Insight Investment claimed ‘the single best recession hedge of the next 10 or 15 years is an investment in farmland’, echoing wider financial opinion, and petro-dollar rich nations like Qatar have been quick to wade into the field on the basis of such advice. Developing nations have been only too happy to oblige them: Ethiopia’s prime minister Meles Zenawi has expressed his government’s eagerness to give access to hundreds of thousands of hectares of farmland in the lowlands to Saudi Arabian investors, whilst Turkish Agriculture and Rural Affairs Minister Mehdi Eker said: “Choose and take what you want.”

Perhaps the most widely reported example is the now-bankrupt Korean conglomerate Daewoo Logistics, who agreed to lease arable land from the government of Madagascar in November 2008. Daewoo intended to use the land to farm corn and palm oil for export to the Republic of Korea, where 95% of non-rice foodstuffs are imported, and concerns about food security and sudden price rises are high.

However, the Daewoo deal, worth multiple billions of dollars for a 99 year lease on an enormous 1.3m hectares of land, is now regarded as a case study in the volatility of such investments. Predictably, the proposed deal provoked widespread anger in Madagascar, where citizens see their land as the sacred property of their ancestors. The deal came to a sticky end when the government of Madagascan president Marc Ravolomana was ousted in March 2009 in a coup led by the military-backed Andry Rajolina. Upon claiming leadership of the country, Rajolina stated, “In the [Madagascan] constitution, it is stipulated that Madagascar’s land is neither for sale or for rent, so the agreement with Daewoo is cancelled.”

“Many Malagasy felt that the land deal was another instance of the government thinking of Madagascar as a private business,” Madagascan citizen journalist Lova Rokotomalala tells me. “More than anything, it was the perception that the government tried to sneak in the land deal without posting any basic information and objectives before hand that really got the population outraged.”

So what is happening here? Why are developing nations like Madagascar so willing to sell the treasured arable land of their ancestors to foreigners, leaving themselves open to destabilising accusations that they are inviting ‘neo-colonialism’? Moreover, why are foreign companies so willing to risk big money on these exotic, politically sensitive ventures?

In short, the answer is that many developing economies desperately need an influx of capital to ease crippling public debts, and are betting foreign ownership of their land will bring with it jobs, technological and infrastructural development (in the form of fertilisers, agricultural tools and an investment in transport) and a transfer of labour skills to modernise their agricultural industry. For investing companies, the potential rewards are simply enormous: large ownership stakes in economies that will likely to see real growth in the coming decades, as the over-leveraged developed world falters and food demand increases.

On the face of it, this trend appears to be a ‘win-win’: large-scale capital investment in poor African and Asian nations could massively improve agricultural productivity, and help to feed selling countries’ famine-hit populations, while easing the food security fears of developed nations. In the process, it is argued, large multinational corporations will be able bring food to poverty stricken populations in a manner that development agencies can only dream of. The World Bank, for one, has endorsed this vision, stating that investment in agriculture is the best way for wealthier nations to contribute to developing world economies.

However, uplifting as the sales pitch may sound, the experience of Daewoo Logistics in Madagascar suggests this positive theory does not always play out in reality, and that locals are unimpressed with the proposed benefits.

In Sudan, the Darfur crisis has left the World Food Programme struggling to feed 5.6 million refugees – suggesting the country might not be the ideal place to grow food for foreigners. Yet this week the Sudanese minister for investment, Salman Suliman Alsafi, announced that he expected an investment of US $6 to 7 billion in the country in 2010, highlighting agriculture as being the chief area of interest. Even assuming the best of intentions, it seems churlish to expect foreign corporations to serve two masters equally; were they to do so, there would likely be over-fertilisation and deforestation of the farmland that could cause long-term damage, but it seems more likely they would concentrate on more profitable markets in the world’s wealthier nations.

“If there is a real world shortage of food in the future – and there may well be – it is difficult to imagine that a wealthy nation, like Saudi Arabia, that has leased or bought land in a poor country in Africa, such as Sudan, will put the food needs of the local population before the food needs of its own population in the case of an emergency,” explains Sue Branford from ‘Grain’, an organisation supporting small farmers.

In many cases, the legal ownership rights of selling governments are also questionable. During the Communist rule of Ethiopia in the 1980s, farmers lost their land to the Mengistu dictatorship; when the regime was overthrown, their land was privatised and sold to the Ethiopian-born Saudi citizen Al Amoudi, who is the 43^rd richest person in the world according to Forbes magazine. The farmers maintain that the land is still theirs though.

Then there is the tension between foreign companies and locals.

Joachim Von Braun, Director General of the International Food Policy Research, tells me: “Investors can make these deals politically acceptable if they inform local communities beforehand, include them into planning and treat them as investment partners… this can be done sustainably, when local communities are trained, supported by extension, and transparent, fair and sound contract arrangements are done.”

However, this is frequently not the case. In Kenya, the US agricultural giant Dominion Farms reportedly flooded the land of one farmer after he refused to sell his land at a rate of US $60 per property, and lent on the local police force to harass him (Dominion deny abuses of power took place). In Laos the market for land sales is chaotic and deregulated: land can be sold by both local and national legislatures, but ownership information is not collated in one place. This has caused utter confusion, with multiple investors claiming rights to each other’s farmland. Amid the madness, Laosian farmers, who have no land ownership rights under their country’s law, are seeing logging companies move in on land they have farmed for many years, and their livelihoods disappearing as foreign contractors are brought in to replace them.

While Von Braun’s sunny view on land leases can become a reality, the tensions caused by the international sale of domestic arable land is prompting local farmers to create their own agricultural initiatives, in order to protect themselves from the vagaries of such policies. Take Madagascan scientist Andriankoto Ratozamanana, whose innovative social agriculture business Megaseeds aims to empower African farmers by helping them to increase the yield on existing farmland by 400% per hectare through careful water use, organic fertilisers and selective mechanisation. Megaseeds then makes money by taking a share of the extra profits accrued.

Workers’ cooperative schemes also appear to be taking off. Author Andrew Rice recently wrote in The New York Times of his discovery of an Ethiopian scheme in which farmers working small plots were able to export their produce of green beans to the Netherlands.

Compared to the massive land concessions to foreign companies, this might seem like small beer - and it is. However, many are hopeful that a mass accumulation of similarly small-scale enterprises could have a powerful impact, swinging the balance of power back towards local agricultural producers. Local entrepreneurs need credit for such ventures though, and ironically, much of this is coming from abroad, via microfinancing networks.

‘Microloans’, small loans offered to poverty-stricken locals to spur entrepreneurship, are growing in popularity. The International Fund for Agricultural Development (IFAD) says that 75% of its funded projects involve providing financial services to poor people via rural banks and savings associations, with Western institutions heavily encouraged to invest in microfinance initiatives. IFAD has established 200 microfinance institutions, offering services that have directly issued microloans to more than 800,000 developing world entrepreneurs.

While critics have argued the microcredit movement has merely succeeded in privatising anti-poverty programmes, it is often a more benevolent form of investment than that made by large profit-driven companies from abroad. The emergence of new web based lending platforms such as Kiva.org and Lendforpeace.org, which connect small-scale investors with micro-entrepreneurs, suggests the true potential of digital microcredit has not been tapped yet. Even more encouraging is United Prosperity, an Internet microcredit organisation that maximises the money received by borrowers by using lenders’ investments as guarantees at local banks. With the guaranteed investment, borrowing entrepreneurs are able to claim higher value loans from their local bank, allowing them to obtain a credit history that might subsequently help them borrow more money for future ventures.

Of course, these innovations are no panacea for the mass redistribution of developing world farmland to foreign commercial interests. But assuming the trend for this type of foreign investment in developing economies continues, it seems likely that similar small-scale agricultural initiatives will grow exponentially along with political unrest, at least until foreign companies are prepared to swallow the less profitable pill of supplying their new hosts’ demand for food.

Illustration: Verity Keniger

Most ideas on display in this public space are based on transport; the renewable energy technology sector is mostly ignored. Given that much of the investment coming out of Copenhagen will be in renewables, it’s strange that more emphasis isn’t given to the development of solar and wind power technology here – explaining their increasing efficiency and the extent to which they can replace fossil fuels. But Hopenhagen Live is about fun, and getting ordinary people engaged with climate change – showcasing green transportation is more exciting, and much easier to relate to than Siemens’ development of Smart Grid technology. Smart Grid is therefore given only one small panel in one small cabin, despite being something that the U.S. will invest $4 Billion of stimulus package money in.

Locals will be interested by a project funded by the City of Copenhagen: the ‘Copenhagen Wheel’, which will appeal to the 40 per cent of people in the city who commute by bike. Developed by MIT’s SENSEable City lab project, it’s the cycling version of the Nike Plus iPod-linked running shoe. The wheel harvests energy when cyclists brake, powering an electric motor, In the wheel, sensors monitor traffic, pollution, noise, and temperature information, all of which is broadcast wirelessly via smartphone, and the data collected for the commuters, their friends, and for the city. The MIT inventors will be hoping that a commitment to huge emissions cuts is made at the conference will necessitate greater investment in technology that’ll achieve those cuts. The wheel is a niche technology, but forward-thinking innovation in urban transport is essential with cities accounting for two-thirds of global emissions.

Private entrepreneurs also showcased their work, including Shai Agassi, ex-President of SAP (one of the three sponsors of Hopenhagen), and one of Time magazine’s top 100 influential people. His company Better Place provides electric car infrastructure services, and here in Copenhagen they exhibit their products and charging stations: quiet cars for a quiet city, which could provide emission cuts much greater than bike-based innovation if successfully rolled out.

Agassi demanded that governments agree an ambitious deal in a pre-conference video; he and all the green entrepreneurs hope that a comprehensive deal at the conference will be the impetus for further public and private investment. Al Gore explains that a comprehensive UN deal demanding strict emission cuts, and which offers financing for the developing world, will “unleash capital and innovation.” Whether or not the final UN deal ends up being the “Real Deal” that activists are calling for (and that looks increasingly unlikely), there will still be financing made available by the developed world to help their industries and help the developing world transition towards clean economies.

Making greentech developments accessible and fun, as Hopenhagen does, seems one way innovators are doing good work to improve city dwellers’ lives and draw ordinary people into the complex debates surrounding climate change. But away from the Science Museum sheen of Hopenhagen, windmills and tweaks to national grids will provide greater savings over time, and will likely continue to attract the majority of investment.

The hearing, at which I was present, sought to challenge the Treasury for not keeping to the regulations stated in their spending criteria procedures, under a so-called ‘Green Book’ assessment. These procedures state that all investments of public money must take into account ‘environmental impacts’ and social issues ’so as best to promote the public interest’.

The three campaigning groups – World Development Movement (WDM), People and Planet and PLATFORM – therefore argued if the government holds the majority stakehold of a company abusing these criteria, it has a duty to intervene. A recent report commissioned by the groups has exposed how RBS’s investments have fallen seriously short of fulfilling these ethical criteria, and warrant government intervention.

Entitled ‘Royal Bank of Sustainability’, the report states that since 2006 RBS has been a dedicated investor in Arch Coal, the second largest coal producer in the US, who conduct mountain-top mining operations in the Appalachian mountains, Canada. It reveals how these operations have led to the disappearance of 300,800 acres of biologically diverse forest and contaminated rivers, poisoning the fish that serve as one of the local indigenous communities main food supplies. Furthermore, George Monbiot has revealed RBS  recently lent £8 billion to other companies in Canada who are mining the tar sands, an operation he has critiqued as the “biggest single industrial cause of carbon emissions”.

Another example of misplaced, damaging investments is the Irish company Tullow Oil, who earlier this year used RBS capital to embark on an oil exploration mission in a region of Africa that’s being subjected to a resource-driven civil war: the conflict over natural resources on the border of the Democratic Republic of the Congo and Uganda has led to the displacement of over 30,000 people, adding to the existing 1.4 million displaced people in the area.

In my view, these questionable investments, which are facilitated by public money, provide a compelling case for the Treasury to intervene.

However, compared to many environmental organisations, who offer strong critiques but rarely provide viable solutions, WDM, People and Planet and PLATFORM are working within the constraints of a market economy; the recommendations we have put forward, which propose mandatory environmental assessments on all RBS investments, are based on the realities that we are approaching peak-oil and that governments will very soon have to commit to more serious emission cuts.

We propose that RBS could use these changes to market their green investments and improve their reputation, thus attracting new customers, and contributing to a more environmentally stable planet. Our report offers evidence that renewable energy investment can be economically beneficial, using more sustainable banks such as the Co-operative Bank and Troidos Bank as examples.

Unfortunately, despite the evidence laid out in the report, Judge Philip Sales did not decide in our favour. He stated that the complaints over the unfulfilled ‘Green Book’ regulations were erroneous, since the criteria is open to interpretation. Furthermore, in reaction to our demand for the compulsory environmental assessment of investments he said such activities would “handicap” the sector.

We believe, however, that our case for RBS to change from the ‘Oil and Gas’ Bank to the ‘Royal Bank of Sustainability’ could be just and beneficial for all involved and we have therefore decided to appeal this decision. An appeal date is not yet set but is likely to take place within the next two months.

Saoirse Fitzpatrick works in the Campaigns and Networks department of WDM. You can keep up to date with the case at www.wdm.org.uk.

CCS is actually an umbrella term for a number of complex processes all designed to ‘clean coal’. This can involve chemically washing coal or turning it into a gas before removing minerals and impurities, or chemicals can be used in the flue (big chimney stack) of a power plant to separate the carbon dioxide. Whatever the method, the result is the same – electricity from coal with fewer harmful emissions. The separated CO2 can then be transported through pipes or in containers and pumped into old oil wells or deep under the ocean floor where it can’t leak into the atmosphere and heat our planet. This process transforms the most damaging fuel into one of the cleanest.

There’s certainly no doubt that the world needs to tackle emissions from coal, and soon. The United States produces half of its electricity burning coal and China a staggering 80%; it’s no coincidence that they are the world’s two biggest polluters. Coal is abundant and relatively cheap to extract and as a result the Independent Energy Agency predict a heavy rise in coal use over the next twenty years – China is building new coal-fired power plants at a rate of two a week. The problem of emissions will only get worse unless coal can be cleaned up.

But, whilst the energy production of the United States and China is alarming, it doesn’t explain why Britain is pursuing a ‘clean coal’ future. Having announced a CCS competition in 2007, with a potential prize of £1 billion to fully-fund a demonstration CCS plant, Gordon Brown went further in his latest, and probably final, energy bill by including a fund of £9.5 billion (levied from our electricity bills) to encourage CCS in the UK.

Although coal has long been marginalised on these shores in favour of cheaper and cleaner gas, there hasn’t been a new coal-fired power station built here for thirty years. Why return to the dark arts of coal energy now?

David Kidney, Parliamentary Undersecretary of State for the Department of Energy and Climate Change (DECC) tells me that aside from being in the international community’s best interests, “Virtually all of the expert advice available suggests that CCS will be necessary as an option for electricity generation if carbon dioxide emission targets are to be met.” So the Government insists it’s acting on advice, no doubt from the energy corporations like Scottish Power and E.On who are leading the drive for CCS in the UK.

Jonathan Smith, E.On’s Media Relations Manager, told me that to ensure the lights stay on we will need some coal energy. With gas and oil prices becoming increasingly volatile the UK is aiming for a third of its electricity to come from renewables by 2020 and Labour recently announced plans for 10 new nuclear power stations. But, there’s still a problem when the wind doesn’t blow and what to do if the substantial investment for 10 nuclear plants fails to materialise, which is where CCS comes in to play; “It’s not about putting all of our eggs into a coal basket… our aim is to ensure we provide cleaner and more secure energy supplies,” Smith tells me.

Let’s not kid ourselves though, companies like E.On are not only concerned about securing a clean energy future for the UK, and Smith revealed an ulterior motive: “There’s undoubtedly money to be made from clean coal, if it was perfected by (E.On) then clearly we would be the experts in CCS.”

But it’s not just the energy companies who could profit either, and the scale of CCS could mean new opportunities for the UK economy. Jeff Hardy, from the UK Energy Research Centre, explains: “The supply chain to deliver [CCS] is a very broad one… there will be opportunities for all players, large and small, [in] engineering, chemical, oil and gas companies, compression specialists, gas and fluid specialists, pipeline companies and research expertise.” AEA, an independent energy research group, submitted a report to the DECC in December last year stating that the UK could benefit by £1 billion to £2 billion a year from CCS and other capture technologies from now until 2030, with CCS creating nearly 30,000 jobs in the process. New business and possibly new jobs is the kind of positive economic news the Government has been desperate to hear since last year.

So, it appears CCS solves the problem of coal. We can reduce emissions, provide everyone with enough electricity and create new jobs and business as well; great, let’s all go home and sit in front of a roaring (coal) fire.

Of course, it isn’t that simple. Joss Garman, nemesis to the aviation industry and now a Greenpeace spokesperson, has a very different view; “‘Clean coal’ doesn’t exist. CCS technology is often presented as a silver bullet to the problem of emissions from fossil fuel plants. Yet CCS has never been proven at a commercial scale anywhere in the world.”

The Government launched a CCS competition in 2007 offering full-funding for a 300MW clean coal plant by 2014 to encourage development; the idea being that as technology and efficiency improve, CCS will be commercially viable by 2020. They have tried to allay environmental fears by insisting that any new coal plants must be built ‘capture ready’ with at least a quarter of emissions captured from day one. This isn’t enough for most environmental groups, who claim that the Government’s plans are too not strict enough. Martin Cullen from Friends of the Earth says: “Proposals to approve new coal stations that are ‘capture ready’ are a dangerous distraction. The emissions from new coal plants would lock the UK into a high carbon pathway for many decades.”

The Government’s position wasn’t helped when Stuart Haszeldine, a geologist at Edinburgh University and a leader in carbon capture research, said the CCS competition was “dead on its feet.” Two of four original competitors have quit; BP pulled out of the competition last November because it couldn’t find a ‘power generator’ to partner with, whilst RWE npower cited ‘timetabling’ problems ruling them out of the race. Of the remaining two competitors, E.On’s controversial Kingsnorth plans have been fiercely challenged by environmental groups since day one, halting any meaningful progress. The aforementioned £9.5 billion levy announced a few days after Haszeldine’s outburst was designed to allay fears and reignite the UK’s CCS investment – but if the 2014 target for a working plant is missed, it’s unlikely that CCS will be considered ‘viable’ by anyone come 2020. Only Scottish Power’s Longannet bid is currently still in the competition; the episode shows how prohibitively expensive CCS infrastructure can be.

A 200MW clean coal plant in Tianjin, China is due to be completed next year at the cost of US $1 billion – a standard coal plant of 800MW, producing four times the energy, only costs around $1.4 billion. It’s not just building expenses either; because of the energy intensive ‘cleaning’ processes, CCS plants use more coal to produce the same amount of energy as their dirty counterparts. E.On estimates that even with a carbon tax of €40 per tonne, like that of Norway (the highest in Europe), CCS would still be more expensive than nuclear power and only slightly cheaper than onshore wind power. ‘Clean coal’ requires large corporate and state investment to become a reality and, as BP found, finding partners wealthy enough to support you isn’t easy.

And with no plans for a UK carbon tax, prepare to shell out a few more pennies for your energy bills: “The costs will be passed on to consumers. A low-carbon energy system is not a cheap energy system in the short-term, but it’s cheaper in the long term when the costs of climate change are built in”, Hardy explains.

The business opportunities for ‘all players large and small’ might be some way off too, despite the fact that CCS will rely on collaboration between industries. Let’s take Scottish Power’s partnerships for example: they fund CCS research at Edinburgh University and are trying to secure a similar relationship with Imperial College in London which is great from an academic perspective but does little in the short-term for the economy. Its consortium partners for the Longannet bid include Shell, National Grid and the Norwegian-based engineering firm, Aker Clean Carbon. These companies are global leaders and none could be described as ‘small’ players. Yet, these corporate powerhouses still need financial backing to make CCS a reality. The new jobs and economic benefits of CCS promised in the AEA report, rely on the UK being a leader in the field and doing it quickly – which will mean more pressure on our wallets for some time yet. Environmentalists say that subsidies and investment would be better spent on developing proven renewable technologies and could also provide new jobs and industry immediately – the recently unemployed workers from Vestas would probably agree with them.

With Britain committed to a carbon captured future, environmentalists have asked, what happens if the new coal fired power plants fail to meet expectations and never live up to the ‘clean coal’ billing? You can’t simply turn the power station off if CCS turns out to be an expensive mistake. David Kidney told me that there were various contingency plans being considered including an annual cap on emissions or running coal plants for a limited number of hours but went on to add that “[these] measures should be determined following an independent review to be completed by 2020.” Or, a problem to be dealt with by the next Government. 

Everyone, including environmental groups, recognises the need to tackle the problem of dirty coal. Aside from the potential environmental benefits CCS carries the prospect of employment and could invigorate the UK’s burgeoning Greentech economy. For others, including our electricity producers, the issue is more prosaic; without coal we won’t keep the lights on. But, there are a lot of uncertainties; not least that nobody knows how successful ‘clean coal’ will be, or how quickly it will become cost-effective. The Government has sided with the prospect of economic benefits in the long term and has wrapped it up in a need for a global solution for coal as soon as possible. With nearly £10 billion of our money invested in the experiment already, and time running to make the UK a leader in carbon capture and, more importantly, to avert catastrophic climate change, the hope is that CCS turns out to be the solution and not a costly, carbon-belching mistake.

Cerberus have been substantially affected by the $500bn removed from all hedge funds over the last year; earlier this week they were hit with the news that some investors want out, with $5.5bn being cashed, equal to 71% of the total invested in the two funds affected (Cerberus told the FT it was more like 60%, but whatever, it’s a lot). Cerberus originally blocked the redemptions back in December, but are now letting them through in a controlled wind-down program. Nevertheless, such a colossal drop in assets sent the rumour mill a-spinnin, with people whispering that Cerberus’s funds were on the edge of defaulting – the rumour was quickly and publicly denied yesterday.

In the fat years, Cerberus craved the dynamism and manoeuvrability of hedge fund investment, but now they’re seeing how vulnerable a few bad deals can make them. A 2007 deal saw them buy out Chrysler, with the hope of slimming it down, boosting efficiency and management, and selling it on for profit – what happened was the company went into government-sponsored bankruptcy, and saw its lending arm, a potentially lucrative business for Cerberus, get wound down. GMAC, the lending arm of General Motors that took over Chrysler’s lending, was also taken over by Cerberus back in the day, but they won’t reap the rewards of that loan book as they’ve lost control of GMAC to the American government. Cerberus could lose $1.5bn even after the income they take from Chrysler’s winding-down loan book.

So Cerberus need a stable source of income fast, hence the new-style hedge funds that won’t let people bow out at a moment’s notice. They also told the FT that they were not going to be going after the likes of Chrysler again, preferring the smaller, low-profile clients they used before. It’s a rather pleasing instance of the industry self-regulating in order to stay alive, going after the sober private-equity-style deals rather than the Monte Carlo money-chucking of hedge funds. But even so, is anyone going to trust Cerberus with their money after this ugly year?

Goldman staff are therefore set to get some whopping bonuses – estimates for staff pay packages vary from $770,000 to $900,000 for this year. It goes to show how little compensation reform is managing to keep up with the pace of change – these are short-term bonuses, not tied to the ongoing financial health and profitability of the company. Which according to even their own people, isn’t likely to stay as healthy as it is now.

“We’re in a volatile business”, admitted their chief financial officer, David Viniar, yesterday. Take their exposure in the real estate market, running to $8bn. Goldman lost half a billion dollars in that area over the last quarter, but had the losses neutered by its other trading. But as investment bank Cazenove warned today: “the majority of GS’ revenues are generated in areas that are inherently difficult to predict”. Citigroup suggested that “while 2Q results were strong, they also raise the question where will future growth come from, since it seems clear that core FICC results [from securities trades] ($7.8 billion) and equity trading ($2.2 billion) are not sustainable”. Meanwhile, Peter Eavis at the WSJ notes that Goldman’s value-at-risk level, the estimate of potential one-day losses during adverse trading conditions, is at its highest level since 1999.

That said, they’re not particularly exposed at the macro level – they still have a lot of capital tied up, which, while they might ditch some of it over the next few months, is going to keep them insulated against any further bumps on the road to recovery. That’s no reason though to keep plugging away with a compensation structure that belongs to a previous, reckless age. If Goldman’s staff are being rewarded for the banks’ systemic successes rather than those in real terms, then it distorts their worth to the company; we need a Hester-style approach, with payouts delayed until ongoing profitability is met, to trickle down to the non-executive workers.

Tomorrow we get to see how well JP Morgan are doing – their health will impact upon Goldman, as despite their retail banking assets dragging them down somewhat, JP can start to take market share from Goldman on the new, lean Wall Street. But for now, Goldman has darted into the chaos left by the financial crisis, and mopped up everything it can lay its hands on while the legislature lumbers around getting its plans together. They may never see another bubble like it, but if you’re a Goldman employee, 2009 was the year when you stopped having to worry about your future.

One interview saw him crying and threatening to punch the interviewer to the poignant strains of piped Billie Holiday, while another saw him wearing what looked like liquid eyeliner. Papers linking him to a Mexican drug cartel were found in his private jet, he’s not denying suggestions that he worked for the CIA, and bathroom tiles appeared with his face on. It’s like Geoffrey Boycott’s most troubled fever dreams made manifest.

And now it’s getting krazier! After much dilly-dallying Stanford was finally indicted, and subsequently refused bail – he could be in jail for as long as a year before his trial. As the court gets its shit together, court documents are being filed, and some reveal that Stanford courted the Libyan government for investment! And that they went for it, giving him at least $500m!

Stanford went to Tripoli in January this year for a couple of days, to meet the CEO of the Libyan Investment Authority; this followed meetings with Abdulhafid Zlitni, secretary of planning in the Libyan government, last October. The form of the investment isn’t known, but if they put it in Stanford International Bank, the bank at the centre of the fraud allegations, then they can expect to get back “cents in the dollar”, if they’re lucky.

Start sharpening those conspiracy theories. I know Libya’s getting all legit recently, with their burgeoning tourist industry and only halfway provocative meetings with former enemies, but their legacy as anti-American terrorists who tried to kill Marty McFly still weighs heavy in the mind. Stanford? CIA? Libya? Investment? Fraud? Bathroom tiles? Let’s link it all up and say that Stanford was paid by the CIA to extract money from Libya and then flush it away, thereby preventing its rise from anything but a disenfranchised, boycott-ridden Islamic state. I’ve said it, now run with it, internet crazies!

Ford is spending its on making 13 big names like the Focus and Mustang more fuel efficient, while Nissan is spending it on making one of its plants ready to manufacture its upcoming electric family car. Tesla are less well known on these shores – they make a “roadster” that was apparently designed by Barbie and Ken to ferry them to a volleyball party, but their new sedan, the Model S pictured above, is actually pretty desirable. It’ll use its loan to build a manufacturing plant for the new machine. It’s a 2003 startup that has only delivered 500 vehicles, and has some niggling question marks over its business model; nevertheless it’s set to shift into profitability next month, and is already 10% owned by Daimler, with potentially more to follow. Way to go, you little tyke! Even more satisfying for them is to be deemed “financially viable” and therefore worth investing in, while GM and Chrysler have been left on the naughty step and denied these loans. 

It all makes the UK government’s pledge of £250m towards the entire electric car industry – vehicles and infrastructure – seem pretty pathetic. I know it’s not easy to push through more debt at the moment, but the damage would be offset by the gains, both financial and political. The manufacturing industries are in need of some real, tangible support, Labour need votes in their heartlands – isn’t this a no-brainer? A little incentivising for Opel, Jaguar et al now could mean an ongoing manufacturing industry for years to come.

And let’s not forget our own Teslas, the small UK car startups. Tesla’s exponential rise can be attibuted to creating a sunshine-friendly, environmentally-friendly vehicle in a sunny, environmentally-aware part of America; the UK government should see the potential for things like Riversimple, who make Smart-like city runarounds. Let’s get into this industry before the rest of Europe gets there first.

Investors have voted with their feet at the sight of Mansour fleeing, and the share price has been dropping all morning. It’s a blow for Barclays, who were hoping that their Arab investors would stick around until June 30, when it was expected they would all take a 30% stake in the bank. It’s also embarrassing considering the anger of shareholders at being left out of a rights issue in favour of Mansour, who has now just thrown the investment back in their faces. Mansour’s investment has been a self-fulfilling prophecy – because he invested, the share price went up as it meant Barclays avoided Darling asset-insurance scheme and was therefore seen as a better bet than other banks (the selling off of assets that buoyed their capital also helped).

So Mansour has made a packet off the deal (just in time to buy Tevez and Barry?), while other winners include Amanda Staveley and Roger Jenkins, the architects of the deal in the first place – Staveley got £40m, and while its not been disclosed how much Jenkins got, suffice to say its probably a lot. Mansour still has a lucrative part of his investment still with the bank, the preference shares that pay out at a rather nice 14%.

But even with their ever-rising share price and the blessing of the FSA, Barclays wasn’t seen as a solid bet in some quarters thanks to the risky assets on its balance sheet; now that Mansour has shown a lack of confidence, the bank is starting to seem even less attractive. The board must be thinking themselves lucky that their AGM has been and gone recently.

At least it looks like it could make more than it expected from the sell-off of its ETF-trading business iShares. It had originally agreed to sell to CVC for $4.4bn – a good price considering some estimate were as low as $3m – but can still shop around for better offers, and one of $5bn has come in from Vanguard.

In a weird sort of way, Barclays’ investors have just got the rights issue they wanted in the first place. Trouble is, if Mansour doesn’t want them, who does?

While the government clearly supports the idea of nuclear, it doesn’t really want to support it financially – they claim that a free electricity market, combined with the EU emissions trading scheme, will be impetus enough for private investment. But de Rivaz is calling for a “level playing field”, saying that to give wind farms subsidies and not nuclear just isn’t cricket; he’s also said that without subsidies, maybe he won’t invest at all in the UK come 2011. It’s a classic bit of provocation, and expect a bit of a stand-off over the coming months between Miliband and the big nuclear players. The fact that reactors cost over £4bn to construct, along with the uncertainty of steady revenue thanks to all the other potential new players going online in the coming years, does mean that de Rivaz has a pretty fair point.

EDF bought British Energy last year, the previously semi-nationalised company that owns most of the UK’s nuclear plants and the sites for proposed new ones. 85% of EDF is owned in turn by the French government – having such a large chunk of energy revenue given to the frogs will no doubt have the right-wing press in a flap soon enough.

In other green news today, China has pledged $440bn for investment in renewables, mostly wind power, to take the share of renewable energy to 6% of total output by 2020, rather than the 1.5% it is today. And Vattenfall and DONG energy, the companies who are building our Thanet and London Array wind farms respectively, have been named two of the worst offenders for greenwash, the practice of pretending you’re being green when actually you’re on Captain Planet’s to-do list. I’d take it with a pinch of salt though – the fact that two Danish companies are on a list compiled by a Danish renewables activism group might hint at a bit of PR-mongering of their own.

It wants to roll over up to 70% of the bond into a new one, the carrot for the investors being greater interest; the remaining 30% or so will be funded by CEO Anthony O’Reilly and second-largest shareholder Denis O’Brien. They’re meeting resistance from some bondholders though, and O’Brien has said the chances of talks working out are only 50-50. And while the bond isn’t set to mature until mid-May, if they don’t sort it out before their financial results announcement on Thursday there are worries that auditors will make INM write down their investments. That would surely lead to some asset sales, despite the crappy climate, to add to the imminent sell-off of its online bingo hall Cashcade, German price comparison site Verivox, a South African outdoor advertising business, and others. Cue Lebedev, hoping to add to his burgeoning empire of failing UK newspaper titles?

It’s an ignominious end for O’Reilly, who is retiring next month – as well as the Indy potentially being sold off at a rock-bottom price (or conceivably tanking altogether), he also lost over a billion dollars in 2008. His retirement at least marks, however amicably, an end to the feud between him and O’Brien, in which the former accused the latter of “parking his tanks” on his lawn by buying up a 21% stake in INM; O’Brien in turn accused him of running an “old-style fiefdom” at the group, and that the Indy was merely a “vanity project”. But while O’Reilly’s son Gavin will take over as CEO, O’Brien now has a third of the board and 26% of the company. That’s gotta hurt.