mfioretti: shipping*

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  1. On Friday, the International Maritime Organization agreed for the first time to limit greenhouse gas emissions from global shipping. The nonbinding deal marks a critical shift for the sector — which, until last week, was the only major industry without a comprehensive climate plan.

    Cargo ships are the linchpin of our modern global economy, transporting roughly 90 percent of everything we buy. They also contribute significantly to planet-warming gases in the atmosphere. If the shipping industry was a country, its total annual emissions would rank in the top 10, between those of Japan and Germany.

    Left unchecked, shipping-related emissions are on track to soar by as much as 250 percent by 2050 as global trade expands, the maritime body projects. Such a spike at sea would offset progress in carbon reduction made on land.

    Yet with the new emissions targets, observers say, the shipping industry now has more than a fighting chance to clean up its act.

    The hard-won plan follows tense negotiations involving envoys from 173 countries at the organization’s headquarters on the banks of the Thames River in London. The Marshall Islands and other Pacific nations doggedly pushed the most ambitious proposal on the table: a 100-percent reduction in shipping emissions within two decades, a move that would bring the sector in line with the 1.5-degree target. The European Union also championed a plan to curb emissions by 70 to 100 percent by mid-century.

    Yet other powerful voices in the room, led by Japan, favored smaller emissions cuts and much longer timelines. The United States and Saudi Arabia, two oil-producing giants, objected outright to any emissions cap. Meanwhile, some shipping executives warned of rising cargo costs and threats to business if aggressive targets were put in place.
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  2. There has been a lot of debate about the real benefits of local production, especially that last-mile delivery is more harmful to the environment than the benefits it brings. In your experience, what is the ecological footprint of a product that has been globally designed and locally manufactured?

    Any production that is not hyperlocal ie. from materials sourced within a very short supply chain, has to find its way to the consumer somehow. With respect to environmental concern, the ‘last mile’ is a question of the existing production paradigm finding the most efficient and low carbon way to achieve its objective. I’m not sure that the last mile debate concerning the most carbon-efficient delivery by a globalised supply system can be compared to local production. Local production will have ‘last miles’ (and more energy used in transportation, depending on where the materials were sourced for the production), but in general, I’d be less worried about lots of last miles from local production, than many more tens of thousands of miles of transportation required with ‘remote’ production.

    It’s also worth noting that shipping is responsible for 17% of global emissions, but neither shipping and aviation are accounted for in international climate change negotiations due to the difficulty in allocating emissions ie. do they belong to the producing or consuming country? In general, local has many benefits, but it’s simplistic to assume local always equals ‘good’. It depends on so many things, for example, is the activity occurring in a water-scarce environment? How intensive is the production? Is the power source for the products generated from renewable energy?

    Life-cycle analysis (LCA) is one way of assessing the ecological cost-benefit of different methods of production, but it can get quite complicated. Descriptions can offer a sense of the impacts, however, measuring these and making the trade-offs is less clear and requires not only a lot of data but a lot of consideration and interpretation.

    Before even considering ecological footprints of production, one of the first things cities could do is look into ‘boomerang trade’ – the new economics foundation produced a report on this activity in the UK, where similar goods are being traded and transported across continents, or across the globe. There are also ridiculous examples, such as what I have dubbed ‘frequent flyer prawns’ – shrimp being flown to Thailand from Scotland, and then back because the labour needed to shell them is cheaper in Thailand.

    Trade used to be about genuine comparative advantage. If economics is supposed to be about the efficient allocation of resources, and this is what our systems of economics are incentivising, then we need new economics.

    Cosmo localism, or ‘design global, manufacture local’, certainly has some overlap with ‘glocalisation’, or the adaptation of globally marketed products to local culture, in that a shared global design can be replicated (or adapted then produced) locally. But by whom, and how?

    Glocalisation is about the top-down marketing of consumer products designed remotely, in a centralised way and then tweaked for local culture. Cosmolocalism, or Design Global Manufacture Local (DG-ML) is based on a different production logic, as explained by Jose Ramos and Chris Giotitsas in ‘A New Model of Production for a New Economy’:

    Traditionally corporate enterprises have solely owned the intellectual property (IP) they employ in the production of goods. They source the materials for the goods through national or global supply chains. They manufacture those goods using economies of scale in a set number of manufacturing centres, whereupon those finished goods are delivered nationally or globally.

    DG-ML is an inversion of this production logic. First of all, the IP is open, whether open source or creative commons or copy fair, so it can be used by anyone. Secondly, manufacturing and production can be done independently of the IP, by any community or enterprise around the world that wants to.
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  3. Binyamin Applebaum has a nice piece about the stall in world trade growth, which I (and many others) have been tracking for a while. And I thought I’d write a bit more about this, if only to serve as a much-needed distraction from the election.

    If there’s a problem with the Applebaum piece, it is that on casual reading it might seem to suggest that slowing trade growth is (a) necessarily the result of protectionism and (b) necessarily a bad thing. Neither of these is right.

    I found myself thinking about this some years ago, when teaching trade policy at the Woodrow Wilson School. I was very struck by a paper by Taylor et al on the interwar decline in trade, which argued that much of this decline reflected rising transport costs, not protectionism. But how could transport costs have gone up? Was there technological regress?

    The answer, as the paper correctly pointed out, is that real transport costs will rise even if there is continuing technological progress, as long as that progress is slower than in the rest of the economy.

    To clear that story up in my own mind, I wrote up a little toy model, contained in these class notes from sometime last decade (?). Pretty sure I wrote them before the global trade stagnation happened, but they’re a useful guide all the same.

    As I see it, we had some big technological advances in transportation — containerization, probably better communication making it easier to break up the value chain; plus the great move of developing countries away from import substitution toward export orientation. (That’s a decline in tau and t in my toy model.) But this was a one-time event. Now that it’s behind us, no presumption that trade will grow faster than GDP. This need not represent a problem; it’s just the end of one technological era.

    It is kind of ironic that globalization seems to be plateauing just as the political backlash mounts. But we’re not going to talk about the election.
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  4. How far away are we from a world where drones deliver packages? If Amazon is to be believed, not far at all. Others are not so sure: technical progress past this point isn’t merely a matter of invention, it’s a matter of public safety.
    Tags: , by M. Fioretti (2015-07-28)
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  5. Crowd-shipping offers a means of better exploiting our under-utilized cars through picking up and dropping off parcels along the routes people are taking anyway. How does the model work? People offering to carry parcels (which we will call ‘couriers’) and those wishing to use the service download the app and register with the website, for example with a Facebook link. The user enters details of the parcel, its collection and delivery points and, in some cases, the amount they are prepared to pay for delivery. Potential couriers then bid for the work, competing on delivery time and cost. The user decides which bid to accept. The online platform gives the successful courier a parcel number, address details and access to a messaging service for communication with the user. Once the parcel is delivered, the recipient confirms receipt through the platform and the courier’s account is credited with the agreed fee.
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  6. Russian Prime Minister Dmitry Medvedev has approved documents for developing the Northern Sea Route project that would open a shipping route through the Arctic.

    “I have confirmed a special document for solving the tasks in the project complex of developing the Northern Sea Route,” Medvedev said during a meeting with his deputy prime ministers.

    Medvedev said the Northern Sea Route is the shortest marine route that links Europe with Russia’s Far East, the Asia-Pacific region and the western part of North America.

    “It should be acknowledged that the route » so far isn’t being used so well. It was used much more before. It should work for realizing our unique transportation and logistical advantages, bring money into the budget, and, naturally, open the path to energy resource reserves in the Arctic, Siberia, and in the Far East; therefore, this task is extremely important,” Medvedev added
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  7. Its negligible contribution to greenhouse gas emissions makes its heartfelt pleas for ambitious action all too easy for bigger nations to ignore.

    At the International Maritime Organization (IMO), on the other hand, the Marshalls carry significant weight: 118 million tonnes, to be precise.

    That is the mass of 3,400 ships registered in Majuro, more than any other country except Panama and Liberia.

    It means the Pacific state could succeed in mustering support for its recent proposal to target emissions cuts in shipping.

    Shipping generates 3% of global emissions today, but this could rise to 6-14% if it fails to match countries’ carbon cutting policies, notes foreign minister Tony de Brum.

    “We are an island nation and shipping is one of our lifelines – we cannot survive without it. At the same time, carbon emissions, including those from shipping, pose an existential threat to our people and our country.”
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  8. steppe nomads dominated in war because of the skills they developed when not at war.

    Now think about sail-and-cannon naval warfare. The gunpowder empires knew all about cannon. But my guess – I’m sure there are real historians out there who can correct me if I’m wrong – is that western Europe, because of its geography and lifestyle, had a disproportionately large number of skilled open-sea sailors. Very few of these sailors would have been engaged in warfare in normal times, or even during wars; mostly they would have been prosaically transporting bulk items, especially herring and later cod. But can’t we argue that they provided a base of skills that gave the Atlantic fringe a big military advantage at sea?

    Obviously I like this hypothesis for several reasons. It’s the kind of thing that satisfied my frustrated ambitions to be one of Isaac Asimov’s psychohistorians; I think the analogy between, say, the Dutch Republic and Genghis Khan is pretty cool; and so is the notion that European dominance ultimately rested on the herring trade.
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  9. "This is where the 'Vindskip' comes in -- due to the low fuel consumption it can run on LNG which means there is no sulfur at all."

    One of Norway's biggest shipowners, Wilhelmsen, has already entered the project on a technical basis and, while Lade is quietly confident the world's first Vindskip will slip into the water by 2019, he says the global shipping industry had been slow to respond to his design.

    "(But) the big driving force in the Vindskip project will be these new regulations on sulfur levels," Lade said.

    "The big problem with sulfur is that it acidifies the sea and this means that shrimps and crabs can't form their shells," said Lade, adding that acidification was impacting the entire marine ecosystem. "It's very bad. Something has to be done -- it can't go on this way."
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  10. For the first time, the shipping sector will have to monitor its carbon emissions under a law agreed upon by the European Union Wednesday (26 November), intended as a step towards tackling a growing source of pollutants linked to climate change.

    International shipping accounts for around 3 percent of the world's emissions of carbon dioxide, a share which could increase to 18 percent by 2050 if regulation is not in place, according to the International Maritime Organisation (IMO).

    The law stops short of including shipping in the EU's Emissions Trading System (ETS), the bloc's flagship tool for cutting pollution, but EU officials said it was a step in that direction.
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