France’s Trade Deficit On The Rise

France has just clocked up a record trade deficit for the first six months of this year: 11.193 billion euros. This now adds the French to the eurozone BoP sick room along with Italy, Spain, Greece and Portugal. Of course oil imports form an important part of the picture, but that doesn’t make the headache any less.

The shortfall in June widened to 1.194 billion euros from 1.148 billion in May. The deficit for the first half of 2004 had been limited to 581 million euros.

The finance ministry said that at prices prevailing at the beginning of August France could face an energy sector deficit of more than 40 billion euros this year after 29 billion in 2004.

“The increased impact of the energy component has accounted for nearly half the deterioration in the overall trade balance for France” in the past year, the ministry said, citing rising oil prices.

Alexandre Bourgeois, an economist at Natexis Banques Populaires, said the trade deficit of the last 12 months — 20.6 billion euros — was the highest in French history.

The Jean Charles de Menezes Case

Hi everyone. Yes, it is true: I am back from vacation, and I have been stalking the comments section for a few days now, but I am trying very hard *not* to post regularly since I still have some outstanding work I want to finish before I get too sucked in. On the other hand some things are very hard to just let pass.

The case of poor Jean Charles de Menezes for a start. At the time of his death I defended the police action on this blog (incidentally, a lot of the comments at the time may well still be relevant to this post). At least, lets be clear, I defended the right of the police to act as they did to defend public life when there are reasonable grounds to assume that there is a real and present danger. I still hold that view.

However the FT today is running a version of events which is slightly different from the one we were offered, and formed our judgements with, in the immediate aftermath. In particular the FT suggests:

1/ Jean Charles de Menezes was in fact killed by guns fired by two police officers, not one as originally stated.

2/ Documents and photographs presented to the investigation by the Independent Police Complaints Commission and leaked to ITV News suggested that Mr de Menezes was not carrying any bags, and was wearing only a denim jacket.

3/ ITV News also said the evidence to the IPCC said the CCTV cameras at Stockwell station were working and showed Mr de Menezes as behaving normally, and did not vault the barriers

4/ He was was in fact mistaken for Hamdi Issac, one of the men suspected of carrying out the failed attacks in London the previous day. If this was the case it is hard to see why more effort wasn’t made before he boarded the train to take him alive.

Of course all of this still has to be confirmed, but my initial response is: disturbing. It is extremely important for the effective conduct of the UK anti terrorism policy that we all have the highest possible confidence in the veracity and efficacy of the police services. It is important the inquiry be painstaking and rigourous. This is a clear case if ever there was one that justice must not only be done, it must be seen to be done. I suggest that in the light of all the above the scope of the inquiry now needs to be extended to include an evaluation of how the police communicate sensitive and delicate information to the general public in difficult circumstances. What we don’t need is spin, or a drip feed.

Update: This situation, especially with the images now appearing is terribly moving and most distressing. AP have an up to date summary, and the Times have published – without comment – the full text of a statement from the de Menezes family lawyers, I think I can fully understand why.

More on peat bogs

This National Geographic article givsx you much more depth and info than the newspaper articles.

Brenda Ekwurzel is a climate scientist with the Union of Concerned Scientists in Washington, D.C. She said the West Siberian Lowland indeed falls within a hot spot but added that whether thawing peatlands will accelerate global warming remains an open question.

Ekwurzel noted, for example, that while the peatlands have the potential to release large quantities of carbon dioxide and methane, changes in the soil and groundwater could lead to increased tree growth, which acts as a carbon sink.

“If it turns out the net impact is increased carbon dioxide and methane emissions to the atmosphere, this would lead to warming and subsequent feedback or amplification cycles,” she said.

Smith, the UCLA geographer, is now trying to determine what will happen in western Siberia if temperatures continue to rise, causing the currently frozen peatlands there to thaw and dry out.

Such a scenario would certainly cause the peatlands to decompose and release vast amounts of the carbon dioxide that has been accumulating for the last 11,500 years. However, peat cores taken throughout the region show no evidence for such catastrophic warming in the past, despite evidence that the peat has previously undergone warming episodes.

“That’s why it is such a debate,” Smith said.

WorldChanging discusses terraforming the earth.

It’s important to note that the source of this story is not a peer-reviewed, multiply-confirmed piece of research in Nature, Science or the PNAS. It’s an article in New Scientist about a presentation from a group of researchers just back from Siberia. This doesn’t mean that the findings are wrong, only that we should be skeptical until they’ve been confirmed. But that such permafrost melting would result in the release of abundant methane is not a new theory, and New Scientist notes that independent research points to methane “hot spots” already forming in the region.

For the moment, then, let’s assume that the article is generally correct: the permafrost melt is getting faster, and the boggy ground beneath is releasing its pent-up methane. There are two important things to know about this situation: the amount of methane that would be released is projected to be in the multi-gigaton range — one source says 70 billion tons, another says “several hundred” billion tons; and methane is 21 times more powerful a greenhouse gas than carbon dioxide. In essence, the release of (say) 100 billion tons of methane would be the functional heat-trapping equivalent of 2.1 trillion tons of CO2. To put that number into perspective, the total annual output of greenhouse gases from the US is about 7 billion tons of CO2 equivalent.

This is a big deal.

But there’s actually a third important thing to know: although CO2 takes upwards of a century to cycle out of the atmosphere naturally, methane (CH4) takes only about ten years. Why the difference? Chemical processes in the atmosphere break down CH4 (in combination with oxygen) into CO2+H2O — carbon dioxide and water. In addition, certain bacteria — known as methanotrophs — actually consume methane, with the same chemical results. These processes have their limits, however; an abundance of methane in the atmosphere can overwhelm the oxidation chemistry, making the methane stick around for longer than the typical 8-10 years, and the commonplace methanotrophic bacteria evolved in an environment where methane emerges gradually.

These are pretty much the only two natural methane “sinks.” There are a few small-scale human processes that can make use of methane (for the production of methanol for fuel, for example) and function as artificial sinks, but such efforts would be hard-pressed to capture methane released across nearly a million square kilometers. This, then, is where we start to consider the option of planetary engineering.

Both of the natural processes are, in principle, amenable to human intervention. The oxidation of methane into CO2 and water is a well-understood phenomenon, and relies on the presence of OH (hydroxyl radical); upwards of 90% of lower atmosphere methane is oxidized through this process (PDF). But OH is something of a problem chemical, in that it’s also a key oxidation agent for many atmospheric pollutants, such as carbon monoxide and NOx. Although we could produce OH to enhance the natural chemical oxidation process, the side-effects of pumping enough OH into the atmosphere to oxidize all of that methane would be unpredictable, but almost certainly quite bad.

If you think I’m suggesting this option in a casual or flippant manner, you need to read Terraforming Earth essays one, two and three. Planetary engineering — including the widespread release of genetically modified organisms to combat atmospheric changes — should only be considered when more readily reversed and managed solutions are no longer available or functional. In the case of the Siberian methane, the more cautious options are extremely limited. We’re no longer in a position to stop the melting, even by ceasing all greenhouse gas production today; the temperature increases we’re seeing now are the results of greenhouse gases put into the atmosphere decades ago.

This is cheering. Even if it would help, the odds that the threat will be avoided by governments getting serious about reducing emissions seem much too slim. So it’s nice to be reminded there’s a third possible scenario where things turn out alright.

I wonder, I wonder if such a scheme, possibly quite risky, would meet as much resistance by sceptics and the like, as reducing emissions?

…My quotes may seem DeLongian, but I’m only quoting a small portion. Read the whole thing, and thank god for WorldChanging.

Not too far from now

Kevin Drum writes about our oil peak problem, which isn’t as potentially grave and significant as our greenhouse gas problem, but beats any other contender.

Oil production will almost certainly surpass 84 million barrels per day as new fields come online in the future, but demand is going to increase right along with it. Thus, unless there’s a global economic shock of some kind, it’s likely that demand is now permanently equal to supply. There’s no spare capacity left, and there never will be again.

This mean that we’re now living in a different world. I’m not sure what all the ramifications of this are, but one thing is pretty certain: the next oil shock ? and there will be one eventually ? is going to be worse than any previous shock. Fasten your seat belts.

By an odd coincidence, I stumbled upon this quite topical Andrew Brown post from March today:

Where in Europe would you want to live, if there were no oil and no Gulf Stream [which will make northwestern Europe much colder]? Of the three really huge catastrophes impending in the next century, it seems improbable that we can avoid more than one or two. The oil will run out, and energy will become very much more expensive, with huge consequences for trade and agriculture. The world will warm and may well warm so much that the Gulf Stream stops. The population of Europe and Northern Russia will fall, unless replaced by immigration, which will be resisted. (It’s possible of curse that this effect will arise from the other two, as well as from the demographic trends we now have).

So where would you want your children to live, in a Europe that has neither oil nor gulf stream? Choose now, while we still have the political structures in place to make movement easy. Certainly not England, cold, miserable, overcrowded.

My first instinct would be for Sweden. It’s reasonably well-governed, harmonious, and has plenty of room for farming. But if the gulf stream goes the effect on the climate might be horrible. It certainly will be in Norway. I need to think about that. Second choice, France. Lots of room in the countryside, defensible borders, nuclear power, efficient, not very corruptible government.

But what does the team think?

Switzerland?

More frightened.

This is a few days old, I was too dismayed to bear posting about it. But it has gotten remarkbly little attention.

The world’s largest frozen peat bog is melting, which could speed the rate of global warming, New Scientist reports.

The huge expanse of western Siberia is thawing for the first time since its formation, 11,000 years ago.

The area, which is the size of France and Germany combined, could release billions of tonnes of greenhouse gases into the atmosphere.

This could potentially act as a tipping point, causing global warming to snowball, scientists fear.

“This is a big deal because you can’t put the permafrost back once it’s gone. The causal effect is human activity and it will ramp up temperatures even more than our emissions are doing.”

The intergovernmental panel on climate change speculated in 2001 that global temperatures would rise between 1.4C and 5.8C between 1990 and 2100.

However these estimates only considered global warming sparked by known greenhouse gas emissions.

“These positive feedbacks with landmasses weren’t known about then,” Dr Viner said. “They had no idea how much they would add to global warming.”

Back in June, I wrote on some related frightening news. I’ll point again to this six years old Atlantic article, which is dated, and by a layman, but I think very informative, a good primer.

This New Yorker series (1, 2, 3) was quite gloomy and unsettling, but is already dated; things are looking bleaker now.

Little Bits of Asia

A while back I asked about EU policies toward China. There’s now a section on the Europa server devoted to just that question.

“There will soon be more people living in the city of Bombay than on the continent of Australia. … Bombay is the future of urban civilisation on the planet. God help us.” (p. 3)

“[W]orldwide, a billion more people a year buy tickets to Indian movies than to Hollywood ones. … When every other country’s cinema had fallen before Hollywood, India met Hollywood the Hindu way. It welcomed it, swallowed it whole and regurgitated it. What went in blended with everything that had existed before and came back out with ten new heads.” (p. 321)

“What is a South Asian? Someone who watches Hindi movies. Someone whose being fills up with pleasure when he or she hears, Mere Sapnon ki rani or Kuch Kuch Hota Hai. Here is our national language; here is our common song.” (p. 323)

“A wide assortment of cousins and uncles peoples the marriage. One works on an oil rig in Abu Dhabi; another is a property dealer in Bombay who spent six years in Nigeria getting rich off the currency scam in the 190s.” (pp. 430-31)
— From Maximum City: Bombay Lost and Found by Suketu Mehta

“[Ms. Zhang] has come to realize what all people who want to change China eventually learn: the current system is at a dead end, but its death is not in sight.” (p. 273)
— From Wild Grass by Ian Johnson

“Anita Jain reported in the Financial Times last week that India has ’10 discount airlines planning to enter the market over the next 18 months.'”
— From Slate

“On July 18th, Shanghai’s first budget airline made its maiden flight from Shanghai?s Hongqiao Airport.”
— From the Economist’s August 2005 Shanghai update

And finally, back on July 9, the perceptive Mark Leonard had a terrific article in the dead-tree edition of the Financial Times on China’s role in global economics and politics. It’s online here.

The Emerging Global Labour Market

Opening my McKinseyQuarterly Newsletter today, I find an interesting link to the McKinsey Global Institute’s latest contribution (free, but registration required) to the question whether Globalization is actually civilizing, destructive, or feeble – as Wharton’s Mauro Guillen put it in this paper with reference to Albert Hirschman’s analysis of the shifting social value attributed to markets.

Actually, the analysis is not so much concerned with moral evaluations but – as one of the study’s authors, Diana Farrell, put it in the preface, with providing

“… a fact base to the public debate on offshoring and
the emerging global labor market to enable policy makers and business leaders
to make more informed and better decisions.”

Even if the study only projects trends up to 2008, it is still apparent that any conclusions drawn from an attempt to analyse something as vast and complicated as the global labour market will always depend on far too many assumptions that may or may not turn out to be true. After all, McKinsey also managed to present a model for rationlising stock market valuations for non-cash-flow-generating companies before and after the crash in 2000 – the variable that changed was… expectations.

Still, I think it is a valuable contribution to raise the quality of the public debate by actually attempting to quantify some variables determining demand and supply. While the study – as far as I can tell from looking at the executive summary – does not support the “feeble” view of globalization, when reading the results it is probably still helpful not to forget that McKinsey is unlikely to be interested in increasing their clients’ employees fear of being outsourced any further (the study deals only with white collar offshoring) –

  • Offshoring will probably continue to create a relatively small global labor market?one that threatens no sudden discontinuities in
    overall levels of employment and wages in developed countries.
  • Demand for offshore labor by companies in the developed world will increasingly push up wage rates for some occupations in low wage countries, but not as high as current wage levels for those occupations in developed ones.
  • Potential global supply and likely demand for offshore talent are matched inefficiently, with demand outstripping supply in some locations and supply outstripping demand in others.

Google Tours Europe.

I suppose it is only a matter of time until Google Earth will be banned both for its addictive potential and its contribution to a sharp decline in desktop productivity. But given that much of Europe – and afoe – is on holiday these days, I thought I present you, our gentle readers, with the opportunity of a Google Earth powered, lunchbreak-compatible flight over quite a lot of European capitals, most of which are already available in high resolution.

Actually, I did not programme the European Capitals Tour – it was created by a certain Ben at googletouring.com, where you can find and download the tour. Enjoy.