Author: Charlotte Gill

Global warming opens Arctic to Polar trade routes and tourism

Posted on by Charlotte Gill
Russian icebreaker
The 50 Years of Victory, the world’s largest nuclear-powered icebreaker. A Polar Code of Conduct is being rushed into place as global warming opens up the Arctic to new shipping routes and tourism

A warming Arctic and melting polar ice caps are quickly opening up the polar regions to new shipping routes and tourism, which could significantly boost the global maritime industry. The warmer sea water could lead to ice-free conditions for as long as 125 days each summer by 2050, increasing the likelihood of commodity shipping, according to a report by the UN climate panel. With this comes greater responsibility to protect the unique environments of the polar regions – which is why authorities are scrambling to get a Polar Code of Conduct in place.

Ships operating around the North and South Poles will have to follow a mandatory international code of safety, which is being developed by the International Maritime Organization (IMO). The Polar Code covers all aspects of polar navigation for international shipping, including design, construction, equipment, seafarer training, search and rescue protocols, and environmental protection matters. The hope is this can ensure a viable trade and shipping route through the Arctic: one that won’t hurt or damage the fragile environment. Nevertheless, the establishment of such a code has been controversial because it implies more traffic in and around the Arctic, which currently enjoys great protection from states and international NGOs.

Economic development in the Arctic… is increasing rapidly. The real issue is how we manage it – IMO Secretary-General, Koji Sekimizu

“The economic development and increase of commercial activity in the Arctic region is a contentious subject,” said the IMO Secretary-General, Koji Sekimizu, in a recent speech to the Arctic Council. “We have to face facts and deal with realities; and the reality of today is that commercial activity and economic development in the Arctic is increasing, and increasing rapidly.

The real issue is how we manage it so that commercial advantage is not gained at the expense of the life of the indigenous people or environmental destruction.”

Strict ship requirements
A draft of the Polar Code has already been approved and the final details are being put in place so the rules can be implemented by 2016 or early 2017. Mandatory measures will include safety regulations and pollution prevention. Ships intending to operate in polar waters will have to apply for a Polar Ship Certificate, which will place them in one of three different categories depending on their capabilities to withstand different types of icy waters. This will be based on an assessment identifying operational limitations, and plans, procedures or additional safety equipment to mitigate incidents with consequences for safety or the environment.

Under the code, ships will also need to carry a Polar Water Operational Manual with sufficient information to support their decision-making process when in polar waters. Most importantly, the code will set out requirements that include functions to prevent oil, liquid, sewage and garbage pollution from ships, which could all be detrimental to the sensitive polar ecosystems.

Simon Bennett, External Relations Director at the International Chamber of Shipping (ICS), said the shipping industry will comply with the Polar Code and that, in essence, it is codifying a lot of good practices that are already in place. In particular, firms operating in the Baltics are used to similar conditions and many ships already have ice classifications, which ensure a strengthened hull for operating in icy waters.

“It’s important that the IMO avoids a prescriptive approach and ensures that the code is based on risk and performance-based evaluations,” says Bennett. “There’s also the issue of applying the code in a manner that depends on the season. When there’s summer weather in the polar region, it shouldn’t be necessary to apply onerous standards, whereas, of course, this would be different during the winter. It’s a matter of finding the right balance between taking the environment into account and ensuring commercial access.”

Read: ‘The ice race: oil giants vie to be first to tap into Arctic black gold’

Melting ice
The Arctic has warmed at about twice the global rate in the past three decades. This has contributed to record low sea ice (which has shrunk around 10 percent every 10 years) in recent summers. These ice-free periods could open up new, trans-Arctic shipping through the Northwest Passage and Northern Sea Route (NSR) over northern Canada and Russia.

“Increased shipping associated with the opening of the NSR will lead to increased resource extraction on land and in the sea, and with two-way commodity flows between the Atlantic and Pacific,” the Intergovernmental Panel on Climate Change said in a recent report.

The majority of activity in the Arctic is related to the resources and drilling industries. Opening up the NSR would primarily serve to create a new delivery route for such projects: the Arctic does not offer port rotation and has therefore been less commercially profitable.

“Any new opportunities like the Northern Sea Route are beneficial to our industry, but the real benefits will be felt by off-shore activities,” says Bennett. “We expect an increase in bulk cargo and an opening up of iron ore and mineral mining in the region, which will also foster traffic.” The IPCC also noted a surge in cruise tourism throughout Greenland, Norway, Alaska and Canada.

Unreliable route
However, according to the ICS, the Northern Sea Route presents a lot of unknowns. That could make it a less popular choice with shipping firms who need to rely on consistent routes that aren’t subject to seasonality and unpredictability.

“There’s only a small window of ice-free waters and the sea ice is volatile – it doesn’t contract consistently every year,” says Bennett. “Ships have to sail at a slower speed through the route and this mitigates the benefits achieved by cutting time or fuel use by taking a shorter route.”

Ships have to sail at a slower speed through the route and this mitigates the benefits – External Relations Director at the ICS, Simon Bennett

Shipping accounts for 80 percent of world trade by volume and about three percent of global carbon dioxide emissions. Shorter shipping routes could cut both emissions and the costs of trade, with shipping from Shanghai to Rotterdam via the Northern Sea Route being 2,500 nautical miles shorter than the Suez Canal route. However, these benefits could quickly be outweighed by the costs and uncertainties related to shipping in the Arctic.

“The resources industry would be the key beneficiary of the Northern Sea Route,” adds Bennett, “but it is still not clear that extracting energy in the Arctic will be as economically viable as suggested – especially with the shale boom in the US, which could drive prices down and make operating in difficult conditions such as the Arctic too expensive.”

Ships using the Northern Sea Route, sailing along Russia’s coast, also have to contract Russian nuclear icebreakers, which usually proves to be a costly affair given their monopoly in the region. With recent turmoil in Crimea causing a war of sanctions in Europe, this option is also becoming increasingly uncertain.

The ICS does not consider the NSR a likely alternative to conventional routes; it is simply too circumstantial a route to bet on for an industry that is largely dependent on constant trade routes. That said, polar traffic will increase and this is good news for the logistics industry. With the code, there is hope that this is one development that won’t damage the environment any further and will ensure sustainable economic growth in the region.

Technology’s biggest flops (and why solar roadways are set to join them)

Posted on by Charlotte Gill

Solar energy has immense potential. Every minute, enough of it hits the Earth’s surface to meet the world’s energy demand for a year. But there’s one problem: efficiently capturing sunlight and converting it into electricity has so far eluded the best and brightest photovoltaic experts. It was believed Solar Roadways, a start-up from Idaho, had found an ingenious way to solve the riddle. Global media hailed the idea as a ‘path to the future’: an assertion that, on face value, it was hard to refute.

The Solar Roadways idea is simple: replace crumbling asphalt roads with sophisticated solar panelling. These could cut greenhouse gas emissions by 75 percent, power neighbourhoods and electric cars, and create thousands of jobs. They offer a long-term source of sustainable energy: inventor Scott Brusaw claims a single mile of his roadways could generate enough electricity to power 428 homes. This technology sounds almost too good to be true… and a critical examination of the facts does the project no favours.

Ideas that flopped

If solar roadways fail to catch on, Brusaw can look to history for seemingly genius ideas that went from ‘great Scott’ to great flop.

The monowheel
The idea is simple: build a wheel big enough to accommodate a rider and an engine. The reality is a death trap. The one-wheeled vehicle – if it can be considered a mode of transport and not a Catherine wheel of doom – sprang up in a variety of designs from the 1860s until about the 1940s. Given the lack of balance and the driver being precariously exposed, it’s no wonder the monowheel never got into second gear.

Tanks in the sky
Flying tanks were a serious military concept before aircraft fitted with high-calibre weaponry came into use. Pursued by the Americans and Soviets in the 1930s, flying tanks failed to find their wings. US engineer John Christie claimed they would be a “greater guarantee of peace than all the treaties that human ingenuity can concoct”. Despite this, airborne tanks failed to stop the outbreak of the Second World War and were ditched soon after.

Wireless electricity
Serbian-American inventor Nikola Tesla dreamt of transferring electricity wirelessly to the masses. His Wardenclyffe Tower charged the air with electricity and, because air is a conductor, free electricity could theoretically travel for miles. But the idea was full of problems: one being that electrically-charged air is really dangerous. Tesla’s tower was shut down in 1917, along with his idea of transferring exposed electricity through the air.

For starters, the US would need $30trn – double its GDP – to replace its four million miles of road with the panels, according to an analyst from HowStuffWorks. Big question marks remain over the effectiveness of the network as solar panels convert less than quarter of sunlight’s energy into electricity. This inefficiency means photovoltaics are inferior to other energy sources such as oil, which only loses around 15 percent efficiency through refinement. Doubts have also been raised about the structural integrity of the roads, which will be made with glass. Brusaw claims the panels can withstand the heaviest American trucks (which weigh up to 250,000 pounds), but it’s unlikely solar panels could really withstand the punishment roads take year in, year out. Until these questions are answered convincingly, Solar Roadways will get nowhere. And the idea will not be seriously considered until it’s tested on a scale bigger than the inventor’s back garden.

Industry scepticism
Nonetheless, the project has captured the world’s imagination. In June, it made over $2m in crowdsourced funds from Indiegogo and is the site’s most popular campaign ever, with over 42,000 donations. A well-made YouTube video explaining the ‘Solar Freakin’ Roadways!’ boosted its popularity and has been watched 17 million times.

Brusaw deserves praise for a project full of ambition and creativity. His modular paving system is comprised of hexagonal cells made from recycled glass. The green-coloured tiles are 12ft by 12ft and can produce 7.6kW hours of power every day. The glass is super-strong and embedded with photovoltaic cells, some complex circuitry, and LEDs. The roads glow blue in the dark, spell out messages to alert drivers to hazards ahead, and even melt snow. Leftover liquid is funnelled into an underground storage tank before being sent to a water treatment centre.

So impressive is the idea that the US Department of Energy awarded the project $750,000 to build a prototype. It was the second batch of government funding awarded to Solar Roadways, whose proprietors were invited to the White House in July. Barack Obama’s administration is interested, but the photovoltaic industry is less than impressed. A source close to the industry says Solar Roadways is generally regarded as nothing more than a “distracting fad”. Scott Moskowitz from GTM Research agrees and also believes the public has a misconception that “solar power is expensive”.

“The [Solar Roadways] idea would be valid if solar, as it existed, had costs that prohibited installations,” says Moskowitz. “But with global installations expected to reach 40GW in 2014, it’s simply not the case. Solar Roadways may be a novel idea, but with relatively inexpensive solar power already available, Solar Roadways cannot compete.”

Moskowitz adds the idea would face competition in the green energy market as there is already technology in place that repurposes asphalt surfaces: solar carports. “These systems,” he says “have achieved 100-plus MW of installations in the US and costs have fallen year-on-year. Solar Roadways are more or less second to a party in which asphalt surfaces have already been repurposed into a competitive and renewable source of power.”

What we should be thinking about
The key issue is not the flaws in the idea, but that there is already infrastructure in place that is generating clean power. Improving the efficiency of existing solar panels is more important than investing in exciting but far-out schemes: only 14 percent of available sunlight is converted into electricity, according to Northwestern University. Instead of investing in the Solar Roadways idea, the smart thing would be to increase spending on proven photovoltaic technologies and boost their efficiency.

Infographic: US solar energy

Solar panel installations were worth $13.7bn in the US last year and installation rates are predicted to grow 26 percent this year, according to the Solar Energy Industries Association. The organisation claims more solar panels were installed in the US in the last 18 months than in the previous 30 years. If this continues – which it is likely to do – there will be no need to invest in the expensive Solar Roadways: each of its panels costs $7,000 to manufacture, which is considerably less than existing photovoltaic technology.

After Solar Roadways more than doubled its fundraising target on Indiegogo this June, Brusaw published a statement online that said: “It seems like the world is gathering round our concept as a vote for a paradigm shift, where innovation and creativity are honoured rather than suppressed… Perhaps this will lead to a new scientific renaissance, and this time one that spans the entire globe.”

Solar Roadways has the potential to be an effective source of power, but the impetus to kick-start an international “scientific renaissance” is a tad ambitious. Crucially, what it lacks is support from the people that matter: scientists, engineers and business leaders. Its success is down to online popularity, which has had the knock-on effect of eliciting government interest. The innovative technology is a good idea, but it is unlikely to be anything more than that. High costs, inefficiency and doubts over structural integrity make the hopes of solar highways as far-out as Brusaw’s luminescent blue roads.

Could jellyfish provide the solution to the world’s diaper dilemma?

Posted on by Charlotte Gill

It’s no surprise we humans will go to great lengths to find ways the world’s animals, vegetables and minerals can benefit our way of life. But in recent years, innovative firms have started to ask: “How far can we actually go; what haven’t we yet reached?” This has brought about some fantastic and one-of-a-kind discoveries, including the fact that jellyfish could provide the world with a significant supply of environmentally friendly diapers, and that mussels could be the key to creating sustainable glue. Both are recent examples of innovation stemming from our great blue oceans and could, in many respects, seriously improve healthcare and reduce our carbon emissions.

One of these inventions comes from Cine’al, an Israeli nanotechnology start-up, developing a line of super-absorbing products made from jellyfish. The product was inspired by research conducted at Tel Aviv University, which harnessed jellyfish’s ability to absorb high volumes of liquid without deteriorating. By breaking down jellyfish flesh and adding nanoparticles for antibacterial properties, researchers created a material they call ‘Hydromash’, which can be used as an absorbent material in diapers, toilet paper, medical sponges and feminine hygiene products. Jellyfish diapers were found to be twice as absorbent as most diapers currently on the market, and the eco-friendly products biodegrade in less than 30 days, which means fewer diapers taking up space in landfills. By comparison, diapers, medical sponges and similar products produced using synthetic polymers can take hundreds of years to break down.

Diaper hazards
Disposable diapers are a popular consumer product, especially in the US. Although they offer convenience to the world’s new parents and their defecating little wonders, they have several dangerous environmental drawbacks. Not only do disposable diapers account for a lot of the trash taking over our landfills, they also pose serious risks to the environment and people alike. According to the US Environmental Protection Agency, about 20 billion disposable diapers are dumped in landfills each year, accounting for more than 3.5 million tons of waste.

Jellyfish diapers were found to be twice as absorbent as most diapers currently on the market

If that weren’t bad enough, more than 200,000 trees each year are lost to the manufacture of disposable diapers for babies in the US alone. In addition, it takes 3.4 billion gallons of fuel oil every year to make diapers. Disposable nappies use 20 times more raw materials, two times more water and three times more energy to make than cloth or biodegradable alternatives. Adding to this, manufacturing disposable diapers also utilises non-renewable energy sources.

As disposable diapers need to be exposed to oxygen and sunlight to decompose, they do not degrade quickly and usually take about 500 years to disappear in a landfill. The millions of tons of untreated waste added to landfills each year through plastic diapers can contaminate ground water. As a result, diapers and similar waste are considered some of the least eco-friendly products around, despite their extremely common use. This is why there is a particularly high demand to find a green and sustainable alternative that isn’t dependent on vulnerable resources such as trees.

Coincidently, jellyfish populations worldwide have been exploding in recent years and have begun to present a real problem. The creatures are expected to be one of the few winners of the warming oceans brought about by climate change. During spring and early summer, millions of them appear near beaches and make swimming impossible – unless you fancy a nasty sting.

Unlike most sea creatures, jellyfish are mostly useless. Some species are eaten in the Far East, and mucin, a chemical extracted from them, is used in drug delivery systems. But for the most part, they’re useless, even dangerous, pests. In 2013, a cluster of jellyfish temporarily shut down a nuclear reactor in Sweden after they were sucked into a cooling pipe. Cine’al’s invention could crush two birds with one stone.

Using and abusing
This raises the question many NGOs have asked in recent years: when have we gone far enough? There is currently a growing focus on developing products from the sea: everything from nanomaterials based on fish scales, to the extraction of the chemical tetin from crabs and crayfish for medicinal use. One firm is even experimenting with the possibility of developing glue from seashells, particularly those of mussels, which typically cling to the ocean’s stones and rocks. The hope is that such biodegradable glue would be useful in surgeries, e.g. to close up entry wounds and scars. All in all, the sea provides a seemingly infinite amount of eco-friendly resources that could be the answer to many of our current environmental concerns.

However, conservationists have pointed out that mass-production based on the world’s oceanic resources could seriously hurt our ecosystems. Despite being a point of frustration for beach-goers, jellyfish have been around for hundreds of millions of years and prey on planktonic organisms such as crustaceans, copepods and fish larvae. In turn, some species of endangered sea turtles and sea birds feed on jellyfish. Curiously, some species of fish will actually hide from predators by using jellyfish tentacles as a shield.

What’s more, mussels and similar shell-bearing sea animals have an important function in helping to purify our waters – whether in freshwater or saltwater bodies. They are crucial if we want to maintain clean waters to swim in, and otherwise use for manufacturing, drinking and food production. NGOs are worried this new focus on the world’s sea bodies will result in the same disastrous outcomes we’ve seen with the felling of Amazonian trees, and the extraction of minerals across large swathes of Australia and China.

As usual, human priorities will most likely win the debate and the prospect of a greener solution to our world’s diaper troubles will be seen as a reasonable trade-off for the unknown damage this innovation will cause to our oceanic ecosystems. Obviously, it’s easy to see the benefits of this and no one would ever question eco-friendly solutions. But out of simple wonderment, one has to ask whether replacing one ecological problem with another is the best policy. If we really are as innovative as we claim to be, humanity could – and should – do better.

Brazil’s investment in human development can rescue economy

Posted on by Charlotte Gill
Market in Brazil
Brazil has fallen off the World Hunger Map for the first time in history, according to the UN’s State of Food Insecurity in the World 2014 report. Hunger in the country has fallen by 80 perccent in the past decade

For the first time in history, hunger in Brazil has fallen low enough to warrant its removal from the World Hunger Map, according to the UN’s State of Food Insecurity in the World 2014 report. In the past decade, Brazil has reduced hunger by 80 percent, but societal progress is overshadowed by contradictory reports this month that the nation is in the midst of a recession.

Technically speaking, a recession is defined by a fall in GDP for two consecutive quarters, and as Brazil’s output has fallen in the last three, its economy is in bad health. The World Cup is cited as the main contributing factor by the government, which is surprising, given that the increased tourism spend surrounding such an event is typically a major economic boost to host countries. However, finance minister Guido Mantega blames dwindling economic activity in 2014 on the reduced working days during June and July, when citizens enjoyed an afternoon off on all of Brazil’s match days, and those in host cities received a full day’s holiday each time a game was hosted there. If Mantega is right, growth in the near future is to be expected, though economists anticipate no improvement in the final quarter of 2014, and only a one percent increase in 2015.

The perceived relationship between social and economic growth is key here. Among other factors, investments made in family farming, minimum wage increases and a National School Meals Programme contributed to reducing national hunger, but Brazil’s social development in recent years doesn’t end there. The Growth Acceleration Plan was launched in 2007, aimed at improving infrastructure and providing tax incentives to stimulate economic growth, and in 2012 more initiatives were announced by the government. Poverty fell by ten percent between 2003 and 2009, and income inequality reached a 50 year low in 2011. Taking these factors into account, quality of life has almost certainly improved, yet those focusing on economic performance this year wouldn’t think so.

If you’re going to sustain growth, you need to be able to blend economic growth with social progress

This is not the first time there has been a disconnect between economic and social progress in the same nation. In 2008, Mozambique was celebrated for its economic growth since the 1990s, though the country ranked 172/177 on the UNDP Human Development Report 2007/2008, and remains in the red (more than 35 percent of the population undernourished) on the World Hunger Map, even in 2014. The problem with looking solely at a nation’s GDP is that the welfare of individuals depends on so many additional, non-financial indicators. It is clear that economic growth and social decline can take place concurrently, yet economic growth cannot possibly be sustained in the long term if human development does not increase in kind. Likewise, social progression is limited in a nation with a failing economy.

In certain instances, it is often the pursuit of maximising economic growth that causes social injustice. “If you’re going to sustain growth, you need to be able to blend economic growth with social progress. Otherwise it’s a disparate society you end up with, and the more unstable that society becomes, the greater the risk to economic growth, and you end up with a feedback loop. So the two are intertwined.” says Neil Shearing, Chief Emerging Markets Economist at Capital Economics. Approaching situations from a purely monetary perspective can have a detrimental impact on social welfare, resulting in unrest, which would offset any economic growth posted previously. Social problems must be addressed if not first, then simultaneously with economic development, in order for sustainable growth to be achieved.

Alternative frameworks must be considered, such as the Physical Quality of Life Index (PQLI) developed in the 1970s, which found very little congruence between a country’s GDP and PQLI ranking. Likewise, the 1996 Human Development Report (HDR) found that while there is no clear link between rates of economic growth and human development, the two can be mutually beneficial. These and other studies like it combine economic, environmental and social factors to determine a country’s standing as a whole, rather than basing the assessment on financial indicators alone. With this methodology, a far more coherent image can be produced, and more accurate long-term predictions are possible.

In terms of both economic growth and social development, government policies are of the highest importance, and with the presidential election fast approaching, candidates have a lot to prove. Brazil may technically be in recession, but the investments it has made in social development over the last decade should help it weather the storm and come back fighting.

BHP Billiton freezes executive pay packages for the fourth year

Posted on by Charlotte Gill

The move to freeze the remuneration of the Anglo-Australian company’s senior management and CEO until 2015 marks part of a sustained effort to limit expenditure while commodities such as copper and iron ore continue to drop in price; iron ore has decreased in value by over 40 percent since January.

BHP CEO Andrew Mackenzie received $8m in 2013, his first entire year on the job, in contrast to former CEO Marius Kloppers who earnt double that figure in the 10 months leading up to his departure. Mackenzie’s salary comprises a base rate of just under 25 percent and a 75 percent rate based on performance.

The fall in commodity prices signifies a sharp decline since the years leading up to 2011

BHP said: “Last year, when Mr Mackenzie was appointed to the chief executive role, the board and committee believed that some downward rebasing of his remuneration package, relative to that of the former chief executive, was appropriate – a view supported by Mr Mackenzie,” the Financial Times reports.

The fall in commodity prices signifies a sharp decline since the years leading up to 2011, when the market was strong and buyout activity was common within the industry. But such activity meant limited returns to shareholders, something mining firms are now trying to change by reducing CAPEX and freezing salaries. BHP recently made 700 job cuts at its Queensland operation.

But despite the general trend, some mining company executives continue to rake in high earnings. Sam Walsh, CEO of Rio Tinto, received $10.1m last year – his first at the helm.

BHP is set to undergo restructuring, establishing a new business for its non-core assets and Mackenzie’s performance-based pay to June 2015 will depend partly on that.

BHP Chairman Jacques Nasser wrote in a letter to shareholders: “We believe these outcomes align remuneration with shareholder interests and the prevailing business environment.”

Contactless payment methods face resistance from Germany

Posted on by Charlotte Gill

With contactless cards growing in popularity and the recent announcement of Apple Pay catching the headlines, payment systems are a hot topic of late. However, a 2014 Federal Reserve Report has revealed that 82 percent of all transactions in Germany are paid for with cash, compared with 46 percent in the US, which could prove troublesome for those hoping to implement new payment technologies.

The study also found that in Australia, Canada and the US, credit cards were considered the “most important” method of payment, while they were the least popular in European countries: Austria, Germany, France and the Netherlands included. According to the World Bank, only 36 percent of Germans over the age of 15 even own a credit card, and when pressed as to why this was, respondents claimed to favour cash for its ease of use, practicality, and anonymity. Their findings are in keeping with a broader national trend – with some of the strictest data protection laws in the world, the nation has established a reputation as a sanctuary for privacy and security.

Privacy concerns among Germans date back to the Nazi and East German dictatorships of the 20th century, particularly the invasive monitoring regime practiced by the Stasi. Alongside a substantial network of official employees, the Stasi enlisted the help of 189,000 “unofficial collaborators”; spies and informers who provided information on those close to them, with it not unheard of for family members to spy on each other. Memories of this intrusion are still fresh in the public’s consciousness, it would seem, best evidenced in 2011 when Facebook encountered problems with the nation’s stringent data protection laws.

Rather than a penchant for cash, Germans appear to share an abhorrence for debt, which is common in countries that have previously suffered a financial crisis of some form. Bulgaria and Romania, both nations with a recent history of currency volatility, are also chiefly cash-dependent societies. Savings here are often made in seemingly “safer” foreign currencies, such as US dollars, rather than deposited into a bank account, and economists at the Federal Reserve Bank of New York found that the demand for US dollars tends to rise for at least a generation after a country suffers a major inflation crisis.

Rather than a penchant for cash, Germans appear to share an abhorrence for debt, which is common in countries that have previously suffered a financial crisis of some form

There are of course disadvantages for a society chiefly dependent on cash. Cash fuels the shadow economy, a major issue in Europe –valued at an estimated €2.1trn in 2013, and representing 18.5 percent of the continent’s total economic activity. Visa Europe found a direct correlation between the size of the shadow economy and the quantity of electronic payments conducted in that country: in nations where electronic payments are more popular, the size of the shadow economy is significantly smaller. And the proof is in the figures – Bulgaria’s makes up 31 percent of the nation’s economy, compared with just 10 percent in the UK.

The reluctance of these nations to adopt new methods of payment could prove a stumbling block for the worldwide success of contactless cards. Julia Topar, spokeswoman for Bundersverband deutscher Banken, says that even though contactless pilot projects are still in their early stages, “there are signs that it is not very popular in Germany. Why? Probably for the same reasons that people prefer cash. They don’t entirely trust the procedure.”

Contactless payment systems have their own shortcomings – it is infinitely easier to make careless purchases when all it takes is a swipe of your wallet, and despite the £20 limit per transaction, security is debateable. Researchers at the University of Surrey found that “electronic eavesdropping” could be carried out from as far as 45cm away, although the banking industry insists this is only possible within 5cm. And if theft of the physical card has not taken place, explaining the fraudulent transaction to the bank could prove difficult. Plus, issues have been encountered in London recently, with many customers unwittingly paying for train fares with the wrong card now that contactless cards are accepted on public transport.

With the announcement of Apple Pay, the market leaders in consumer electronics are hoping to dominate yet another industry, with all sorts of promises being made. “Security and privacy is at the core of Apple Pay. When you’re using Apple Pay in a store, restaurant, or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud,” said Eddy Cue, Senior Vice President of Internet Software and Services at Apple, in a press statement.

However, despite the promise of enhanced security for the customer, retailers are yet to be convinced that the technology will fulfil its somewhat ambitious promises. Many have rejected the system, including Walmart and Best Buy, due to costs, low consumer use and higher merchant fees than those incurred for debit card payments. Currently, the new system has only been accepted by 5.5 percent of all retailers in the US – which should have been one of the easier markets to crack. Low consumer use is likely due to the software only being available on Apple’s two newest products, the iPhone 6 and iPhone 6 Plus, meaning most customers will have to wait for their current contract to expire before they are able to join the party. And its limitations don’t end there: with the iPhone’s infamously unsatisfactory battery life, customers too reliant on the system could be rendered both phone-less and wallet-less.

Apple’s latest iPhone release has seen their highest sales yet, but their attempt to break into the payments market is not expected to be as smooth. Not only has it been dismissed by America’s biggest retail power, but faces the likely proposition of rejection from Europe’s wealthiest nation – an opportunity they probably won’t let fly so easily.

EU anti-trust dispute could see Google face hefty charges

Posted on by Charlotte Gill

Google was accused nearly four years ago of giving priority space to its own operations above those of rival search engines. Its complainants included major player Microsoft and price comparison website Foundem.

Now the internet giant could face a hefty sum. EC Competition Commissioner Joaquín Almunia warned that if the search engine does not come up with another reasonable proposal to settle the issue, “the next logical step is to issue a statement of objection.” If the company is charged with breaching anti-trust laws, under EU ruling it could face fines of up to 10 percent of its revenue – which totalled at $55.5bn in 2013.

Google has already presented three proposal plans since the case
was launched

Google has already presented three proposal plans since the case was launched. Almunia initially agreed to the most recent, given in February, which entailed allocating priority space on its European search pages to be auctioned off to competitors.

But Almunia revoked his decision when 20 further complaints were lodged from campaign groups and individuals, which included politicians from France and Germany. In June complaints were made from various businesses, in sectors ranging from telecoms to advertising, which claimed the company exploited its leading market position to promote YouTube and Google +.

CEO of News Corporation Robert Thomson is among the recent list of complainants against Google.

In early 2013 the US federal trade commission cleared the internet giant of charges, stating that Google’s prioritising of its own pages was helpful to people.

But the EC is set to continue in its battle to resolve the dispute. “Microsoft was investigated [by the EC] for 16 years … and there are more problems with Google than there were with Microsoft,” Almunia told MEPs.

US begins its crusade against Ebola

Posted on by Charlotte Gill

The plans, announced by President Obama, include building twenty 100-bed treatment centres, providing US Public Health service personnel in Liberia’s field hospitals, training up around 500 local healthcare workers and establishing an “air bridge” to speed up the transportation of medical supplies. The efforts will be focused mainly on Liberia, which has most strongly affected by Ebola, with a regional control centre to be commanded in its capital Monrovia. A staging area in Senegal will be set up to provide aid and distribute personnel.

Obama said at the Atlanta headquarters of the US Centres for Disease Control and Prevention: “The reality is that this epidemic is going to get worse before it gets better. But, right now, the world still has an opportunity to save countless lives”, adding that “the United States of America intends to do more”, Reuters reports.

The efforts will be focused mainly on Liberia, which has most strongly affected by Ebola

An anonymous Whitehouse official said the Defence Department was asking for a further $500m from the US fiscal 2014 budget to fund humanitarian supplies, training of care workers and transportation of personnel. That brings the total potential funding available to fight the virus to $1bn, following a previous sum of $500m allocated from the 2013 fiscal year to combat Ebola and Islamic State militants in Iraq. The US has already spent $175m in efforts to curb the epidemic and a further $88m was recently requested from Congress to carry the federal government through to the end of 2014.

The WHO and officials in West Africa commended the US pledge to provide more personnel. But according to a report by Bloomberg, the UN said a total of $988m is needed to fight Ebola. Reuters reports that the WHO said affected countries need at least 10,000 more local health workers alongside 500-600 more foreign experts.

The outbreak has had a damaging effect on the economies of Liberia, Sierra Leone and Guinea, the worst affected countries. Ama Baidu-Forson, Senior Economist for Sub-Saharan Africa at IHS told The New Economy: “We expect real GDP growth to be curbed significantly for 2014 as a result of the ongoing EVD outbreak”. She added: “The deterioration of the economic outlooks in these countries extends in our forecasts into the medium-term and long-term to some extent”.

Tackling climate change will not hurt the economy, says GC report

Posted on by Charlotte Gill

A new report, compiled by the Global Commission on the Economy and Climate, has refuted claims that mitigating climate change will cost the economy and lays out the measures it believes to be essential in tackling wayward emissions. The commission is made up of 24 leading figures from government, business, finance and economics, though critics insist that the report’s findings are too optimistic.

“The New Climate Economy report refutes the idea that we must choose between fighting climate change or growing the world’s economy. That is a false dilemma,” said the former president of Mexico and chair of the commission Felipe Calderón in a statement. “Today’s report details compelling evidence on how technological change is driving new opportunities to improve growth, create jobs, boost company profits and spur economic development. The report sends a clear message to government and private sector leaders: we can improve the economy and tackle climate change at the same time.”

“The New Climate Economy report refutes the idea that we must choose between fighting climate change or growing the world’s economy”

According to the report, approximately $90trn will be invested in cities, agriculture and energy over the course of the next 15 years, and public and private parties need only up their spending marginally to make a measurable impact on emissions. Adding five percent more to the $6trn spent on power and transport at present would, according to the report, be enough to purchase renewable technology and lead the shift to a low carbon economy.

“The decisions we make now will determine the future of our economy and our climate,” said Lord Nicholas Stern, co-Chair of the commission in a statement. “If we choose low-carbon investment we can generate strong, high-quality growth – not just in the future, but now. But if we continue down the high-carbon route, climate change will bring severe risks to long-term prosperity.”

The 300-page report also laid out a number of major opportunities to create sustainable cities, land and energy use. By building more compacted cities and improving public transport, governments could save $3trn over the next 15 years, whereas restoring approximately 12 percent of degraded land could support 200 million people and boost farmers’ incomes by $40bn a year.

The commission also remarked on the falling costs of renewable energy and the implications this might have on the global economy’s dependence on fossil fuels. Here, the commission concludes that new technologies have significantly lowered the cost of tackling climate change, and should ruling governments phase out the $600bn spent on fossil fuel subsidies currently, resources would be freed up to spend on renewables and infrastructure.

“The message to leaders is clear,” said Calderón. “We don’t have to choose between economic growth and a safe climate. We can have both. We can choose better growth and a better climate.”

Using science to address global challenges: Ingenuity Lab on its progressive approach

Posted on by Charlotte Gill

Alberta, Canada has established itself as the go-to place, with its strong economy, varied landscape, and world-class education facilities. Now in a bid to secure its future, it has established the Ingenuity Lab, which brings science to the forefront. The New Economy speaks to its representative Carlo Montemagno to find out more.

The New Economy: Well Carlo, maybe you could start by telling me what exactly is the Ingenuity Lab?

Carlo Montemagno: The Ingenuity Lab is an initiative that was established by the province of Alberta, to bring the best minds together to address global challenges. They set up a framework where they provided long term funding, almost $100m over a period of 10 years, in which we can deal with very, very significant challenges, to bring them to a stage of development that we can deploy them in the market and essentially create two solutions, solutions to the economic, environmental and health challenges that are faced by the province, and also to act as a driver to develop and be a nucleus for creating new jobs and improving overall prosperity.

What we’re looking at now is, how do you employ this knowledge that we get to create actual deployable technologies into the economy

The New Economy: Well, Ingenuity Lab was set up to bring together the world’s best researchers to address the grand challenges of Alberta’s future. What challenges are you focusing on?

Carlo Montemagno: So we’re looking at, how do we maximise the economic return on utilising these resources, while minimising the environmental impact of the things that we do? One of the areas that we’re looking at is, how de we take emissions and create value out of emissions? How do we extract out the maximum amount of resources from waste-streams, so that small quantities of items which we normally dispose of in landfills or in tailings ponds, instead we extract them out, so they’re no longer pollutants, and they also create economic value. And the other area that we’re working on is, how do we make resources available that are no longer there? Particularly water resources, how do you take and use a resource which is limited in scope, important to people globally, and make sure that we maximise utility, and even expand the availability of those resources. And the last thing is, how can we use this technology to broaden and reduce the reliance on the current infrastructure in healthcare, and be able to expand it in a way that allows us to provide solutions which are no longer there, to make healthcare more affordable, more effective, and more widely available.

The New Economy: Well you focus on nanoscience, now what exactly is this, and what impact will it play on the future of Alberta?

Carlo Montemagno: Well, the interesting feature about nanoscience is we’re really actually working at nanotechnology. For the last 15 years people, when people have talked about it, it really was nanoscience. We were understanding how manipulate matter, how you control matter at the smallest scale. What we’re looking at now is, how do you employ this knowledge that we get to create actual deployable technologies into the economy. One metre and a nanometre, the comparison is between the diameter of the earth and a soccer ball. You’ve all heard those things, but it’s not just being small. It’s about putting molecules where you want them to be, when you want them to be there, to do what you want them to do. Just because you’re working with molecules doesn’t make you do nanotechnology, it requires the precision assembly of matter. That’s the way living systems work, and that’s the reason why the accelerator, or the Ingenuity Lab, we have a motto called “the Power of N – Nature, Nanotechnology, and Networks” and the idea is we take our inspiration from the way nature works, we use nanotechnology to get access to the way nature works, and we create them into systems that are useful to people at our scale.

The New Economy: Well you work within four sectors: mining, agriculture, energy and health. How important are these to Alberta’s and in fact the Canadian economy as a whole?

Carlo Montemagno: Alberta itself has the the third largest proven oil reserves in the world, behind Saudi Arabia and Venezuela, so it’s a huge economic driver, not just for Alberta but for all of Canada, in fact most of the world. Every dollar that we generate in Canada yields eight dollars more in the energy sector globally, it’s an incredible economic driver. The other areas of course are agriculture, we’re a major exporter of food, and the mining of course we produce many mining minerals to a large extent that are strategic in nature, and are very important because the stockpiles, the ability to produce it globally is fairly restricted depending where the source of the ore is. And health, health is ubiquitous. Every nation in the world deals with health. Different problems, different areas, but health is a key component to prosperity for everyone.

We have been able to mimic the way nature works in the production of matter

The New Economy: Well what problems do these areas pose, and what breakthroughs have you made in these areas?

Carlo Montemagno: We have been able to mimic the way nature works in the production of matter. We look around and we see the original nanotechnology machines of grass and green things. What we’ve figured out how to do is, how do you extract out the metabolism that’s found in those plants and those animals, and impart them inside materials that we engineer and produce. So it’s not alive, but it has the same metabolic pathways. So now we can take just CO2 that’s been emitted from a source, sunlight or another light source, and convert it directly into valuated dropping chemicals. We’ve identified 72 different chemicals that we can produce. That means that we can take an emission which is implicated in global warming and all those other problems, and now instead of emitting it, we use that to provide new products for that drive, and hopefully we’ll drive a new economic sector, and it will be deployable globally.

The New Economy: Well finally, how do you see the Ingenuity Lab’s role in the future?

Carlo Montemagno: One of the biggest challenges that you have is that scientists and investigators, they work in a very compartmentalised fashion, in which they all work in a very, very small segment, and don’t try and work across disciplines so that they can develop the technologies to reach the marketplace. The other problem associated with it is that the majority of funding that comes in is all focused on very near-term solutions, and very incremental gains, and the end result is that oftentimes scientists are funded work they’ve almost completed already, because that is the only way they can compete for getting the resources. They show so much data that the job is almost already done before they get the money, because they’re so risk averse. The Ingenuity Lab’s funding mechanism was set up to really tackle over the horizon technology, provide a base of long-term support so you can employ strategies to develop these technologies, and get them to the marketplace and get them to where we can realise the opportunities that technology will afford to improve prosperity.

The New Economy: Carlo, thank you.

Google’s driverless cars hit roads tomorrow, despite flaws

Posted on by Charlotte Gill

Road works, heavy rain, potholes and traffic marshals stopping vehicles are all obstacles that Google’s driverless cars remain unable to navigate or otherwise handle. Worryingly, California has, as of September 16, allowed for driverless cars to roll down Highway One and other routes in the scenic state.

So far, the license to send a driverless car onto the streets is only attainable by companies such as Google and, according to the law, there has to be at least one sober and awake person in the vehicle. This means that private persons are not yet able to acquire a driverless car and legally drive it down the street. Yet, with the law allowing for these so-called robot cars to navigate California’s roads, concerns have arisen whether the technology is really ready.

[T]he driverless car has the potential to prevent an astounding loss of life, with more than 1.24m people dying in road traffic accidents every year

It was recently revealed that Google’s driverless car only barely passed the necessary driving test for California and Nevada states, as technicians had to intervene twice when the car couldn’t navigate a street that was partially blocked by construction works. Despite this, the car smoothly merged onto a highway and avoided swerving bikes and pedestrians on the street.

Now, the driverless car has the potential to prevent an astounding loss of life, with more than 1.24m people dying in road traffic accidents every year, according to the World Health Organization.

But this argument becomes somewhat obsolete with the amount of obstacles the cars still can’t handle. According to a progress report from Google, the car is limited to drive on less than one percent of US roads, as it can only follow routes that have been extensively mapped. Keeping the driverless cars’ road-ready would require Google to constantly update a map of all the roads in the US, including issues such as interim roadblocks and construction works. As of now, the sensor system attached to the roof of the car is able to navigate roads with the help of maps, but unexpected situations such as the aforementioned, still present a problem for Google’s technicians.

In order to get the maps prepared for full usage of the driverless cars, a large group of technicians has been updating road information so that the cars can be ready for private use within the next five years. Whether Google’s driverless car will still be allowed on the roads by then remains to be seen. As of tomorrow, it’s Google’s time to prove sceptics wrong as the first driverless cars hit California’s streets.

French rules provide obstacle for Netflix as it takes on Europe

Posted on by Charlotte Gill

The California-based internet streaming giant has launched in six new European markets in a bid to extend its reach to non-English speaking countries and underline its reputation as a pioneer in the streaming video on demand (SVOD) space. By expanding in France, Germany, Switzerland, Belgium, Austria and Luxembourg, Netflix has upped its potential customer base by another 180 million households, double that of the US market.

Netflix’s service is already popular among British, Dutch and Irish consumers, and boasts a sizeable presence in Denmark, Finland and Norway. The Broadcasters Audience Research Board (BARB) reported in July that over 10 percent of UK households had signed up to Netflix as of Q1 2014, despite stiff competition from rival streaming services such as BBC iPlayer, 4OD and Lovefilm.

[E]arly indications suggest that some European markets, France in particular, might prove a far tougher nut to crack

However, early indications suggest that some European markets, France in particular, might prove a far tougher nut to crack. For one, the American streaming service provider must contend with a requirement that stipulates at least 40 percent of TV and radio content must be of French origin. And whereas the service is expected to come up against little to no opposition in markets such as Germany, French sources are growing increasingly concerned that Netflix might come to bear negatively on domestic talent.

With a European subscription package starting at €7.99 a month, Netflix hopes to gain access to a third of French homes over the course of the next five to 10 years. However, some of the country’s top TV operators, Orange included, have introduced rival streaming services to stifle any momentum Netflix might gain on arrival, and have pledged publically to not feature Netflix. The country’s third-largest operator, Bouygues Telecom, has teamed up with Netflix and plans to roll out the service as soon as this November on its own set-top boxes.

As part of Netflix’s attempts to offset any hostility in France, the service is set to produce an original French series entitled Marseille, and has recently purchased the rights to a French-made children’s cartoon called Wakfu.