For nearly a year, the question around infrastructure spending has been, “How much?” At last, the nation has received an answer.
Although smaller than originally proposed, the $1 trillion bipartisan infrastructure spending bill recently signed into law by President BidenJoe BidenMarcus Garvey’s descendants call for Biden to pardon civil rights leader posthumously GOP grapples with chaotic Senate primary in Pennsylvania Trump social media startup receives commitment of billion from unidentified ‘diverse group’ of investors MORE will still ensure immense, much needed investments in the nation’s infrastructure.
But now that we’ve finalized the magnitude of our spending, it’s time to ask a new question: “How can we spend wisely?”
Decision-makers and the public need to remember that even the smallest of spending decisions can have enormous consequences. Not only can the choice of project type have lasting effects on an entire region, but even the construction practices selected for that project can determine its long-term success.
Maricopa County, Arizona, for instance, has long chosen to maintain concrete pavements with asphalt overlays. Yet, a report by the Arizona Department of Transportation has found that continuing to do so could cost the region an extra $1 billion over the next decade when compared to diamond grinding. Clearly, even decisions as small as maintenance technology choice can have an outsized impact.
This is not to say we should spend less. Our infrastructure spending as a percentage of GDP has fallen by roughly one-quarter over the past 60 years. Meanwhile, federal investment as a whole fell by 50 percent by the same metric between 2011 and 2018. Together, the recent Infrastructure Investment and Jobs Act and Build Back Better Act could reverse these trends and transform the nation’s infrastructure.
But to turn this raw investment into real impact will require us to spend more wisely. Thankfully, a growing body of research can allow us to do at.
New findings have given us the opportunity — and the mandate — to spend more boldly and intelligently than ever before. Here’s what we should do: Modernize planning tools to consider systems holistically, get out of technology ruts, and, most fundamentally, measure performance.
So, what do we mean by “considering systems holistically,” exactly? Rather than weighing the benefits of a project in isolation, holistic planning weighs how a project would also impact surrounding infrastructure and the wider region.
Consider the Red-Purple Bypass Project in Chicago: A modernization initiative of the Chicago Transit Authority, or CTA, this recently completed project rebuilt a junction between some of the city’s busiest El lines.
At first glance, building a short rail bridge seems like an isolated improvement. Yet, its cascading effects could be substantial.
By simply relieving a bottleneck, it could essentially unlock capacity equivalent to a new line — accommodating eight additional trains and 7,200 more passengers per hour. It will also improve reliability across the rail network, benefiting commuters in distant parts of Chicago. Evidently, thinking in terms of the wider network can make even localized projects hugely transformative.
This same holistic approach can also improve the nation’s ailing road networks.
Research indicates that moving to whole system decision tools provides as much benefit as spending roughly 10 percent more per year. And the tools to do this, referred to as asset management tools, are commercially available. States should adopt and apply such tools to inform all funds allocation questions immediately.
Thankfully, systems perspectives are starting to become standard practice. Leading transportation departments and metropolitan planning organizations (MPOs) are today implementing accessibility-based performance planning — a leading whole systems approach.
This form of planning considers projects based on how many jobs, health care facilities, parks, and other key amenities people can reach in certain times by certain modes of transport. With this kind of systems planning, even targeted improvements can expand access across entire regions.
But systems approaches alone cannot ensure efficient spending: We’ll also need to escape technology ruts.
Research shows that when states eschew tired tools and use a wide variety of materials and construction technologies, they can build a system far more economically. In fact, using a broad mix of paving materials and practices, including investing in long-lasting construction, provides the same benefits as spending 32 percent more per year while also cutting pavement emissions by 21 percent.
Finally, to realize lasting change, we need to measure the performance of the infrastructure we create.
Currently, we rarely measure the quality of our roads — chiefly because data on infrastructure has been hard to gather. And yet, without this data, effective decision-making is impossible. That’s where smart technologies can prove useful.
Various smartphone crowdsourcing tools are already gathering road quality and travel time data across the country at a fraction of the cost of conventional methods. With more investment, these tools could help cash-strapped transportation departments while helping to mitigate traffic jams — which currently cost drivers roughly $1,000 annually.
Over many years, a narrative has emerged in the public imagination: when immense, visionary investments are made — the Hoover Dam, the Interstate Highway Network — cities, regions and nations are transformed as a result.
Yet, transformative infrastructure projects are the product of more than just massive investment: their success also depends on cutting-edge tools and perspectives that maximize those investments.
As we shift from negotiation to implementation, we should embrace a new narrative to guide our infrastructure investments. We need to understand that spending boldly is just the first step: ultimately, we must spend shrewdly as well.
Jinhua Zhao, Ph.D. is director of MIT’s Mobility Initiative and an associate professor of transportation and City Planning.
Anson Stewart, Ph.D., is a research scientist at MIT’s Department of Urban Studies and Planning.
Franz-Josef Ulm, Ph.D., is the faculty director of the MIT Concrete Sustainability Hub. His research interests are in the mechanics and structures of materials. His research investigates the nano- and micromechanics of porous materials, such as concrete, rocks and bones and the durability mechanics of engineering materials and structures.
Randolph Kirchain, Ph.D., is the co-director of the MIT Concrete Sustainability Hub. His research focuses on the environmental and economic implications of materials selection and deals with the development of methods to model the cost of manufacture and the sustainability of current and emerging materials systems.
Research from the MIT Concrete Sustainability Hub is sponsored by the Portland Cement Association and the RMC Research and Education Foundation.
Ford sees $8.2 billion gain on its investment following Rivian’s IPO – Driving
Ford continues to gain, despite abandoned plans to jointly develop an EV with the startup
Ford Motor Co. expects to record a gain of $8.2 billion in the fourth quarter on its investment in RivianAutomotive Inc. after the electric-truck maker’s blockbuster initial public offering late last year.
The legacy automaker disclosed the gain Tuesday along with several special items it intends to report when Ford releases earnings on Feb. 3. The Dearborn, Michigan-based company will also reclassify a non-cash gain of about $900 million on the Rivian investment from the first quarter of last year as a special item, meaning it will be excluded from the full-year adjusted results, according to a statement.
The disclosures show Ford continues to gain from its connection to the startup even after the auto giant exited Rivian’s board in September and subsequently announced it had abandoned plans to jointly develop an electric vehicle. Ford, which has invested a total of $1.2 billion in Rivian since early 2019, has a 12 per cent stake that the company has said was valued at more than $10 billion in early December.
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Since a November listing that was the largest IPO of 2021, Rivian has been on a roller coaster. The shares peaked at more than $172, but have tumbled 57 per cent since then as the company faced new competition in the electric-vehicle market. Rivian was briefly valued at more than $100 billion, then more valuable than Ford, but Ford has subsequently reclaimed the lead after it topped $100 billion in value for the first time last week.
Ford shares were little changed in after-hours trading Tuesday in New York, while Rivian climbed less than one per cent.
ByteDance reorganizes strategic investment team, causes panic – Yahoo Movies Canada
What a roller coaster day for China’s tech industry. TikTok’s parent company ByteDance has dissolved its strategic investment team, sending worrying messages to other internet giants that have expanded aggressively by investing in other companies.
At the beginning of this year, ByteDance reviewed its “businesses’ needs” and decided to “reduce investments in areas that are not key business focuses,” a company spokesperson said in a statement.
ByteDance isn’t halting external investments outright, though; instead, the investment team will be “restructured” and “integrated across the various business lines to support the growth” of its business.
In other words, some members from its strategic investment team, which has backed 169 companies, according to Chinese startup database IT Juzi (some deals may not be public), will be reassigned roles in other business departments and continue to invest there.
The “restructuring” still stirred up a wave of panic in the industry. China’s cyberspace regulator has drafted new guidelines that will require its “internet behemoths” to get its approval before undertaking any investments or fundraisings, Reuters reported, citing sources. Some Chinese media outlets also reported similar drafted rules.
“Behemoths” refer to any internet platform with more than 100 million users or more than 10 billion yuan ($1.58 billion) in revenue, said Reuters’ sources. That rule, if true, will put a slew of Chinese internet giants, from Tencent, Alibaba, Pinduoduo, JD.com to Baidu, under regulatory review for their investment activities. Tencent in particular is famous for its expansive investment portfolio, which earns it the moniker “the SoftBank of China.”
In a surprising turn, China’s cyberspace regulator said that the “rumored guidelines for internet companies’ IPO, investment and fundraising are untrue.” Furthermore, the authority will “investigate and hold relevant rumormongers responsible in accordance with the law.”
ByteDance’s motive for restructuring may indeed be to generate more synergies between its external investments and internal businesses. We don’t know for sure yet. But there are signs that China’s antitrust action on its internet darlings are nowhere near the end.
Tencent recently sold a great chunk of its shares in two of its most important allies, Chinese online retailer JD.com and Singaporean video games and e-commerce conglomerate Sea. While antitrust pressure wasn’t cited as the cause for its divestments, speculation is rife that China is continuing to blunt the monopolistic power of its largest interent platforms. A handful of them have received various degrees of fines for violating anticompetition rules, but a pause on their investment game will carry much greater consequences. The question now is who’s next.
CSA shines a light on greenwashing – Investment Executive
Greenwashing has become an issue for regulators who worry that investors could be intentionally or inadvertently misled about the green credentials of the funds they buy.
“In addition to leading investors to invest in funds that do not meet their objectives or needs, greenwashing may also have the effect of causing investor confusion and negatively impacting investor confidence in ESG investing,” the CSA warned in its notice setting out the new guidance.
The regulators reported that targeted reviews of investment funds’ continuous disclosure in this area revealed a number of shortcomings. Some funds had potentially misleading disclosure, the CSA found, while others featured inadequate reporting to investors on investment strategies, proxy voting practices and ESG performance.
Many funds “lacked detailed disclosure” about the specific ESG factors considered in their investment strategies and how those factors are evaluated.
Regulators also found that many funds provided more detailed ESG disclosure in their marketing materials than in their prospectuses; that most funds didn’t detail portfolio changes that were driven by ESG considerations; and that more than half of the funds that use proxy voting as part of their ESG strategies didn’t set out specific voting policies.
“In addition, the vast majority of the funds reviewed did not report on their progress or status with regard to meeting their ESG-related investment objectives,” it said.
In the wake of that review, the regulators indicated they don’t believe current disclosure requirements need to be revised to specifically address ESG factors. However, the CSA said “regulatory guidance is needed to clarify how the current disclosure requirements apply to ESG-related funds and other ESG-related disclosure in order to improve the quality of ESG-related disclosure and sales communications.”
The new guidance doesn’t add requirements for fund managers, but it does provide insight into areas where firms may be falling short of meeting existing disclosure expectations.
For investment funds, the regulators are hoping that guidance will be enough by bringing “greater clarity to ESG-related fund disclosure and sales communications to enable investors to make more informed investment decisions.”
Among other things, the guidance recommends that funds that aim to generate a measurable ESG outcome report their results to investors.
“For example, where a fund’s investment objectives refer to the reduction of carbon emissions, investors would benefit from disclosure in the fund’s [performance report] that includes the quantitative key performance indicators for carbon emissions,” it said.
On marketing materials, the CSA said that “a sales communication that does not accurately reflect the extent to which a fund is focused on ESG, as well as the particular aspect(s) of ESG that the fund is focused on, would both be misleading and conflict with the information in the fund’s regulatory offering documents.”
It also said that the use of fund-level ESG ratings, scores or rankings may be misleading. Reasons include conflicts with the rating provider, cherry-picking positive scores, and failing to disclose qualifications or limitations to a rating or ranking that would supply added context.
“Interest in ESG investing is on the rise and this enhanced and practical guidance will play an important role in helping investors make informed decisions about ESG products, as well as preventing potential greenwashing,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a release.
The CSA indicated that it will continue to review ESG-related disclosures as part of its continuous disclosure reviews.
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