Day: May 9, 2022

Do economic sanctions work? | Markets & Morality

Since the Russian aggression towards Ukraine, Western countries have imposed a wide range of economic sanctions on the regime and on individuals linked to them.

How effective are these sanctions and who are they meant to target?

Adam Bartha welcomed Jessica Miller, the Founder of Strela Advisory and Fred Roeder, the Founder of Consumer Choice Center to debate the issue. Fred highlighted that the belated European actions against Russian are necessary to stop Russian’s ability to inflict further pain on their neighbours, even if it has high economic costs on EU countries. Jessica argued against broad-based economic sanctions implemented for individuals, as the believes they are ineffective in changing Putin’s mind and deteriorate the rule of law in European countries.

The Devastating Impact of the FDA’s Proposed Menthol & Flavored Cigarette Ban

The FDA’s announcement to ban the sale of menthol cigarettes and flavored cigars has been roundly condemned from all sides of the political spectrum, and is opposed by groups as diverse as American Council on Civil Liberties (ACLU), Rev. Al Sharpton’s National Action Network, the National Black Justice Coalition, Americans for Tax Reform, Americans for Prosperity, and Heritage Action for America.

Americans for Tax Reform convened a virtual seminar on the impact of this proposed ban with policy & law enforcement experts, covering the science and evidence (or lack thereof) underpinning the ban, the disastrous implications for law enforcement and vulnerable minority populations, the consequences of a thriving black market, and alternative, proven methods of tobacco harm reduction the FDA should be enacting instead of prohibition.

Vape industry urges govt to implement long-delayed vape regulations

Instead of banning vape products wholesale, vape industry players are urging the government to implement long-delayed regulations for the industry.

The Malaysia Retail Electronic Cigarette Association (MRECA) president Datuk Adzwan Ab Manas, in a statement issued recently, said a taxation framework for vape liquids with nicotine was supposed to be implemented from January 1 this year but has been delayed four months because the Ministry of Health (MoH) still has not implemented regulations for the industry.

Ironically, this delay has not only left the industry in limbo but has resulted in the government listing more than RM750 million a year in tax revenue.

This breaks down to the government losing approximately RM62 million every month from the failure to collect taxes.

Read the full article here

The PFAS Packaging Predicament: McDonald’s Isn’t Loving It

The packaging of a number of popular food items has attracted the attention of Consumer Reports, given the presence of per-and polyfluoroalkyl substances (PFAS), because of which fast-food giant McDonald’s is currently facing class-action lawsuits. Claimants are citing health risk concerns, yet McDonald’s is currently abiding by industry standards. So let’s review what PFAS are, some contradictions for this case, and the overall implications of PFAS for business practices.

What are PFAS and what are the concerns?

PFAS is a chemical family of over 9,000 man-made substances, ranging from gas to liquids, which have a variety of applications, from being a moisture barrier for tech gadgets to serving as a means for improving the durability of medical implants

PFAS are present in numerous household items, and are often referred to as ‘Forever Chemicals’ given the difficulty in breaking down their concocted components. It is precisely this lasting power that makes PFAS appealing for food containers. Packaging with PFAS can handle heat, steam, saturation, and grease – making it quite the innovation. 

The superior functionality of PFAS, however, doesn’t mean they should be used in excess. Just because someone has a fast car doesn’t mean he should recklessly speed down the highway. 

To be sure, there are significant health risks when overexposure to PFAS occur and spillovers sometimes happen. Fortunately though, a 2018 Toxicological Profile for Perfluoroalkyls by the Agency for Toxic Substances & Disease Registry says that “industrial releases have been declining since companies began phasing out the production and use of several perfluoroalkyls in the early 2000s.” In addition to that, a CDC report shows that since 2000, “mean blood levels of PFOS have declined approximately 84 percent and mean blood levels of PFOA have declined about 70 percent,” and recent reports are showing that bodies of water contain only trace amounts of PFAS, and they have been declining.

When higher levels of PFAS are found to be present in ground materials and waterways, it is often connected to communities with nearby military bases and fire training sites. PFAS are a major component for firefighting foam, and although this foam does pose serious health hazards, there is currently no alternative that is as effective

Given this understanding, it seems obvious that the focus should be on how to prevent the need for using firefighting foam rather than the banning of PFAS altogether. Just like that fast car, it is handy to have in an emergency (and blanket bans rarely result in positive outcomes).

What’s next and what was already in the works?

It should be noted that if McDonald’s could have more environmentally friendly packaging, it likely would. According to its 2020-2021 Purpose and Impact Progress Reportlast year, it made great strides in ensuring that a majority of its food packaging (99.6 percent) was derived from recycled or sustainable fiber. The report states “Improving the sustainability of our packaging and moving toward a circular economy are top priorities for our business.” 

But change takes time, and it is not clear as to what the lawsuit claimants would have McDonald’s do in the meantime – revert to Styrofoam? And to be frank, McDonald’s founding core competencies were in serving customers burgers and fries, not sustainable sourcing or package manufacturing.

PFAS will likely remain a core component of containerization strategies for food retailers until something better comes along that is either comparable or superior. And actually, McDonald’s may help lead the charge with funding to find alternative options given its previous pledge to continuously improve in this realm. 

In a statement given to Today, McDonald’s asserted that it “stands behind its commitment to the safety of its food and food packaging” and that the process of taking steps to remove PFAS use in packaging began in 2008 with a target to completely eliminate it by 2025.

So to get slammed with a lawsuit for its packaging seems like a slap in the face, particularly since many restaurant chains are aspiring to recoup lost profits as pandemic policies are lifted. And for restaurants aspiring for a rebound, calls for modifying packaging purchases may be too much to bear during a time of supply chain constraints.

What are the intentions and contradictions?

For those truly scared of PFAS presence at McDonald’s, it is important to remember that no one is forcing anyone to eat there (and those concerned should probably refrain from fast food altogether, given that a majority of restaurants from Panera to Popeyes have PFAS levels found in their packaging).

The hard truth is that being good for the environment isn’t always conducive to current needs. Take for example the extreme use of single-use plastics throughout the pandemic, let alone the pollution generated from disposable masks

It is also important to remember that when we pressure firms to do what is thought to be better, it can sometimes turn out to be worse – take how the banning of plastic straws can backfire, or how cotton tote bags can be a bigger problem than their plastic counterparts, or how even tree-planting campaigns can become environmentally costly.

As with all in life, there are tradeoffs – which is why PFAS use should be assessedaccording to the risk-related exposure for each chemical as well as the purpose of its use. Effort should also be placed on how best to test and treat PFAS presence when it does reach hazardous levels and any discovery of the misuse of these chemicals should be punished. 

And this brings us to the irony of the McDonald’s packaging problem. It is doing nothing wrong since the FDA has approved the use of PFAS in food packaging. 

As noted by the FDA, “the FDA does not have any indication that these substances are a human health concern, in other words a food safety risk in human food, at the levels found in this limited sampling.”

As such, the present lawsuits are not only a curious occurrence, but impose unwarranted pressure on any retailer tied to PFAS presence. 

And for those jumping on the bandwagon as a contributor to the fast-food court case claims, consideration should be given to the collateral damage that may occur. Over 90 percent of McDonald’s restaurants are franchises, meaning most McDonald’s stores are owned and operated by small business owners within your community. 

Smaller shops unaffiliated with McDonald’s may also be affected and fearfully pivot their packaging purchases despite the fact that what is being used is safe and approved, which is an important point: McDonald’s must consider more than the safety of the environment; it also must ensure the safety (as well as satisfaction) of its customers. For example, although PLA (polylactic acid)-coated paper could be an alternative packaging choice for McDonald’s, this material is not well-suited for heat transfer, and so someone ordering a hot beverage may feel the burn (and McDonald’s is no stranger to coffee-related court cases). 

What is the role for the consumer?

Before complaining in court or accusing wrongdoing, customers should cool it with the sue-happy culture and take accountability for the role they play, since history has shown that regardless of whether an organization wishes to do good for the planet, it is all for naught if consumers are not on board. 

And perhaps no firm knows this better than Frito Lay. For four years, it invested in the creation of a fully compostable bag for its SunChip snacks, only to have it be phased out in a matter of 18 months due to consumer complaints. The reason for shunning the SunChip sustainability effort was simply because consumers didn’t like the noise it made. 

Just imagine the number of complaints that McDonald’s would receive from boisterous buyers if its packaging failed to keep grease drippings at bay, or the heat of coffee contained. 

Considerations and Implications

New inventions are making the world better and safer every day, and given that PFAS impact numerous industries, there is a strong incentive for alternative innovations to come about over time to appease the various stakeholders present – thereby leading to safer options. 

Take for instance, vaping, which is 95 percent less harmful than cigarettes. Vaping has proved to be a worthwhile alternative for those seeking to quit but have found little success in kicking their smoking habit. Although it’d be best not to ingest any nicotine from the start, vaping is certainly a step in the right direction for those eager to transition away from tobacco consumption. 

And, while on the subject of consumption, most people would probably be better off not eating Big Macs on a regular basis. Even McDonald’s acknowledges this and has rolled out the McPlant – a vegan friendly alternative. And for now, McPlant sales are proving strongand PFAS packaging concerns don’t seem to be a deterrent. 

At the end of the day, experimentation is necessary for firms to advance their offerings, which can lead to an improved society. A marketplace that binds entrepreneurs with rules and rulings will hardly encourage exploration for innovations – and firms will grow to fear their customer base rather than have a desire to cater to them. Consumers should be wary of using the power of the courts rather than the power of their purse to influence business practices.

Originally published here

Zoning reform should be an election priority

Canada ranks dead last in housing units per 1,000 people in the G7, and Ontario is the lead cause, David Clement and Yael Ossowski write.

Ontario NDP Leader Andrew Horwath has unveiled the NDP’s platform in the lead up to the next election, with a policy plank putting an end to exclusionary zoning. For many, this is a bold move from the Official Opposition. It also happens to be a policy change that Ontario desperately needs.

Exclusionary zoning are prohibitions on multi-family housing units ultimately limiting the number of housing units available in a city. Simply put, peeling back exclusionary zoning gives property owners more freedom to build different types of housing, increasing the housing stock, something that Ontario needed yesterday.

Nationally, Canada ranks dead last in housing units per 1,000 people in the G7, and Ontario is the lead cause. Ontario only has 398 units per 1,000 people and needs to build another 650,000 units just to get to the national average.

In Hamilton, buyers and renters are feeling the pain caused by the chronic undersupply of housing. Average home prices are now over $1 million, inflating 25 per cent year-over-year. And the pain isn’t just being felt by those looking to buy a home. Undersupply is putting upward pressure on rental prices as well. The average rent for a two-bedroom apartment is $1,841. That rent requires an income of at least $82,000, but the average family in Hamilton has a pre-tax income of only $66,460. As the housing crisis worsens, the average home, both buying and renting, is out of reach for the average family.

Beyond making life more affordable, increasing the housing stock also grows the economy. Research on zoning rules in the U.S., which mirror what we see in Canadian cities, showed that housing constraints lowered U.S. aggregate growth by 36 per cent from 1964 to 2009.

But, some who oppose density will likely rehash the argument that increased density, despite growing the economy, is bad for the environment. Time and time again, NIMBY voices argue against increased density because of the perception that increased density is a net negative for the environment. It’s not true.

In fact, according to the Intergovernmental Panel on Climate Change (IPCC) more compact cities could reduce urban emissions by upwards of 25 per cent. This should be intuitive for policy-makers. If people can live closer to where they work, the stores they shop at, the restaurants they dine at, or where they seek entertainment, they ultimately drive less. Whether it be by foot, transit or bike, compact cities actually allow for people to reduce their carbon footprint, not increase it.

And it isn’t just emissions that are reduced by zoning reform. The same goes for water usage. According to the peer reviewed journal Landscape and Urban Planning, single family irrigation rates are 48 per cent higher than multi family housing units.

While the NDP is making steps in the right direction on zoning reform, they are taking a giant step backwards with their proposal to give municipalities more decision-making power by reforming the Ontario Land Tribunal. Giving more power to local councillors is exactly what got Ontario, and Hamilton, into this mess. Zoning reform is needed, but emboldening local governments with more decision-making power is bad policy, and one that could undermine the value of zoning reform.

Hamilton needs more homes. Ending exclusionary zoning is a great step in the right direction. Whether blue, orange, or red, all political parties, both federally and provincially, need to make zoning reform a priority. 

Originally published here

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