The initials 'CCS' usually stand for Carbon Capture and Storage, which was discussed in a post here recently. However, I was with the team in Paris during COP21 promoting the Cap Global Carbon proposal (as described in John Jopling's blog post here last year); the mechanism embodied in Cap Global Carbon is Cap & Share, and it occurred to us that the name 'Carbon Cap & Share' has the same initials, CCS. We wondered, are these two types of CCS complementary or antagonistic? Are they friends or enemies?
The Paris Agreement was hugely symbolic. But if it remains only symbolic, then we're in deep trouble. We need to implement it quickly, and then some. But it's clear that cutting carbon emissions won't happen fast enough. CCS (and for that matter geo-engineering) offer to help.
But there's a defeatist sleight of hand in that previous paragraph. We may start by agreeing that we need to move fast, but then somehow we slide into accepting that we are unable to just decide to do this. So instead we turn to trying to fix things with technology. But are we really incapable of acting decisively? Are we really limited to moving at a slow, 'politically feasible' pace – or is this just a framing of the situation by vested interests?
On first encountering CCS, you might ask the following: prevention being better than cure, why dig up carbon only to re-bury it? If you're confronted with a flooding bathroom, surely one of the first actions is to turn off the taps? Go for the root cause of the problem and shut it off. Otherwise, we're into an 'eating a spider to catch a fly' series of escalating problems and side effects.
Although the recent post here on CCS stated that 'a revolution in the global economy is needed', CCS doesn't offer one. With CCS, we're still firmly in the 'frame' that takes digging up the fossil fuels for granted. Questioning the digging up falls outside the frame.
Cap & Share, on the other hand, does offer a revolution. Not the kind that overthrows capitalism perhaps, but one that does put capitalism at the service of humankind. We simply insist on the market operating within a set of rules we decide. It's like our decision to abolish slavery: we said to the market, 'these are the rules, slavery is out; now go and do your thing within those rules'.
With Cap & Share our ground rule is that the worldwide extraction of fossil fuels must be capped (limited to a certain amount, in accordance with the latest science, that reduces briskly each year towards zero). That's the 'Cap', and we achieve it through an annual global auction of fossil fuel extraction permits. Then we share out the auction income to all adults (that's the 'Share'). This is essentially a global Cap & Dividend system (similar to the 'Fee & Dividend' idea, advocated by the Citizens' Climate Lobby and others). Cap & Share replaces the need for emissions trading, national emissions limits, and indeed any scrutiny of emissions at all. Everything's taken care of 'upstream', by turning off the taps.
So Cap & Share takes the root cause of most emissions – namely the extraction of fossil fuels – and tackles it head on; CCS simply tries to 'cope with it'. CCS, like ge-oengineering, is a useful avenue to pursue (and surely, we're going to need everything we've got), but all too often CCS will be used to give cover to those who want to maintain the 'extraction is sacrosanct' frame in place.
With the feeling, perhaps, that Cap & Share and CCS seem to be at odds. But no. Despite this, I would argue that we should see them as partners.
On the one hand, Cap & Share which tackles fossil fuel emissions, can be complemented by CCS, which can tackle the non-fossil CO2 emissions (steel and cement production, say). And conversely, Cap & Share delivers (among other things) a carbon price, which is needed for CCS.
So, do we need CCS? Probably; and CCS needs a carbon price. But are CCS and a carbon price sufficient? No. We need both partners. We need to get serious; to make the carbon price high enough to enforce an effective cap; we need a simple system to do this – and one that also addresses inequality would be good. In other words, we also need Carbon Cap & Share – the other CCS.
Do you remember the "not-so-good old days"? When you were delayed while travelling abroad and it was too expensive to use your smartphone to check for alternatives online and inform the people you had to meet?
While recently travelling in Germany, I found myself in exactly this situation – in a train that was delayed at a station, but this time with the difference of having a roam-like-at-home plan.
While I was checking online maps to see how I could still make my appointment on time, I was chatting with friends, agreeing on a new meeting place and receiving real-time updates from another friend on the train delays. All of this was included in my normal French mobile plan, without any additional costs.
You might stop reading here and think that you still find yourself in the not-so-good old days because your mobile plan does not allow you to roam abroad. At the OECD, we have been following recent developments in international roaming services and have been comparing them across countries.
Our new report on Developments in International Mobile Roaming (IMR) provides an overview of progress made in the implementation of the OECD recommendation on international mobile roaming. We found that since the 2012 OECD Recommendation, IMR prices have been significantly reduced, either by ensuring effective competition or, in its absence, applying regulation.
Since 2012, different mobile operators across the world have developed 'Roam Like at Home' (RLAH) plans, which do not require purchasing 'add-ons' and use the subscriber's domestic mobile package, such as the one described at the beginning of this post. Our report found that these offers are more prevalent in markets with four rather than three mobile network operators (MNOs), likely a result of the additional competition provided by more players.
Wholesale competition, provided by more MNOs, is also key to enabling Mobile Virtual Network Operators (MVNOs) develop additional offers. Since 2014, for example, some MVNOs in countries such as France, the Netherlands, the United Kingdom and the United States have all begun to offer RLAH offers covering continents – Europe, in the case of the Netherlands and France, and most of North and South America in the case of the United States, as well as one MVNO data RLAH offer announced in April 2015 for over 120 countries for users travelling from the United States. A UK operator reported that on average its customers used 500 MB per trip and, the two million that had travelled since the introduction of the RLAH offer, had saved in total the equivalent of USD 2 billion.
In the absence of sufficient competition, the report shows that authorities have applied regulation, for instance, in the European Union and European Economic Area (EEA). The European Union (EU) regulatory initiatives in the international mobile roaming market have provided a benchmark for many countries outside the EU and have highlighted the role that regional bodies can play in significantly reducing prices and creating competition in IMR services. By 15 June 2017, roaming charges in the EU will cease to exist. As an intermediary measure, from April 2016, roaming will become even less expensive: operators will only be able to charge a small additional amount on top of domestic prices- up to €0.05 per minute of calls made, €0.02 per SMS sent, and €0.05 per MB of data (excl. VAT).
The report also found that several new bilateral agreements which have been concluded or are in the process of finalisation should lead to price reductions and provide a paradigm for other countries to follow suit where there is insufficient competition. Some of these bilateral agreements have also been undertaken between countries with free trade arrangements and could provide a framework to follow for other regions.
Finally, we also took a look at new technological developments, which could play a significant role in reducing roaming charges. Take, for instance, the case of SIM cards that can be associated with multiple operators or, going even further, virtual SIM cards. The Apple SIM is a good example for the first case: It enables consumers to choose the mobile network they prefer for data when they want to connect a mobile device such as an iPad. Users can travel between the UK, the US and Japan, availing themselves of the same rates paid by local users without the need to purchase a local SIM card. Virtual SIM cards, like the Xiaomi Roaming Card, also let travellers roam abroad without swapping SIM cards on their mobile devices.
Overall, being connected to the Internet – be it for people or things – becomes more and more indispensable in an increasingly networked world and one in which your car or medical device could include one or more SIM cards. This report addresses the most recent developments and policies to further meet the growing demand for roaming services. We will continue this work at the OECD with our member countries and stakeholders to further ensure IMR better meets the needs of travel across the globe.
For some, the ocean is the new economic frontier. It holds the promise of immense resource wealth and great potential for boosting economic growth, employment and innovation. And it is increasingly recognised as indispensable for addressing many of the global challenges facing the planet in the decades to come, from world food security and climate change to the provision of energy, natural resources and improved medical care. While the potential of the ocean to help meet these challenges is huge, it is already under stress from over-exploitation, pollution, declining biodiversity and climate change.
Calculations based on the OECD's Ocean Economy Database value the ocean economy's output (measured in terms of the ocean-based industries' contribution to economic output and employment) in 2010 at USD 1.5 trillion, or approximately 2.5% of world gross value added (GVA). Offshore oil and gas accounted for one-third of total value added of the ocean based industries, followed by maritime and coastal tourism, maritime equipment and ports. Direct full-time employment in the ocean economy amounted to around 31 million jobs in 2010. The largest employers were industrial capture fisheries with over one-third of the total, and maritime and coastal tourism with almost one-quarter.
Economic activity in the ocean is expanding rapidly. However, an important constraint on the development of the ocean economy is the deterioration of its health. The ocean has absorbed much of the anthropogenic carbon emissions, leading to ocean acidification. Also, sea temperatures and sea levels are rising and ocean currents shifting, resulting in biodiversity and habitat loss, changes in fish stock composition and migration patterns, and higher frequency of severe ocean weather events. The prospects for future ocean development are further aggravated by land-based pollution, in particular agricultural run-off, chemicals, and plastics, as well as by overfishing and depleted fish stocks in many parts of the world.
Looking to 2030, many ocean-based industries have the potential to outperform the growth of the global economy as a whole, both in terms of value added and employment. Between 2010 and 2030 on a "business-as-usual" basis, the ocean economy could more than double its contribution to global value added, reaching over USD 3 trillion. Particularly strong growth is expected in marine aquaculture, offshore wind energy, fish processing, and shipbuilding and repair. Ocean industries also have the potential to make an important contribution to employment growth. In 2030, they are anticipated to employ approximately 40 million full-time equivalent jobs in the business as-usual scenario. The fastest growth in jobs is expected to occur in offshore wind energy, marine aquaculture, fish processing and port activities.
In the coming decades, scientific and technological advances are expected to play a crucial role both in addressing many ocean-related environmental challenges and in the development of ocean-based economic activities. Innovation in advanced materials, subsea engineering and technology, sensors and imaging, satellite technologies, computerisation and big data analytics, autonomous systems, biotechnology and nanotechnology – every sector of the ocean economy – stands to be affected by these technological advances.
Expected growth of ocean-based industries highlights the prospect of growing pressures on ocean resources and ocean space already under considerable stress, not least in economic exclusion zones (EEZs), where most of the activity takes place. The inability so far to deal with these pressures in an effective, timely way is in large part due to what is historically a sector-by-sector management of marine activities. At least for the foreseeable future, regulation of ocean activities is expected to continue to be largely sector-driven, with efforts focusing on the integration of emerging ocean industries into existing and fragmented regulatory frameworks. The number of countries and regions putting in place strategic policy frameworks for better ocean management within their EEZs has increased in recent years in response to growing pressures.
In order to boost the long-term development prospects of emerging ocean industries and their contribution to growth and employment, while managing the ocean in responsible, sustainable ways, a number of steps could be taken to enhance the sustainable development of the ocean economy.
Reinforce international co-operation in maritime science and technology as a means to stimulate innovation and strengthen the sustainable development of the ocean economy. This entails undertaking comparative analyses and reviews of the role of government policy regarding maritime clusters around the world, notably in respect of their effectiveness in stimulating and supporting cross-industry technological innovations in the maritime domain; and establishing international networks for the exchange of views and experience in establishing centres of excellence, innovation incubators and other innovation facilities in the field of cross-industry maritime technologies, and improving the sharing of technology and innovation among countries at different levels of development.
Strengthen integrated ocean management. In particular, this should involve greater use of economic analysis and economic tools, for example by establishing international platforms for the exchange of knowledge, experience and best practice, and by stepping up efforts to evaluate the economic effectiveness of public investment in marine research and observation. It should promote innovation in governance structures, processes and stakeholder engagement to render integrated ocean management more effective, more efficient and more inclusive.
Improve the statistical and methodological base at national and international level for measuring the scale and performance of ocean-based industries and their contribution to the overall economy. This could include further development of the OECD's Ocean Economy Database.
Build more capacity for ocean industry foresight, including the assessment of future changes in ocean-based industries, and further development of the OECD's current capacity for modelling future trends in the ocean economy at a global scale.
Conventional international trade statistics offer a picture of trade flows between countries, broken down by types of goods and services. While this is an important input for trade analyses, these data do not offer insights into the actors, or the types of firms, that are actually engaged in cross-border trade. The OECD Trade by Enterprise Characteristics (TEC) data do provide such information, giving important insights on the role of firms in Global Value Chains. They highlight that large firms continue to dominate international trade, and that, often, those firms that are among the most important exporters, are also responsible for the majority of imports. The TEC data also provide information on the role of SMEs in international trade, across industries and across countries, showing, for example, that although SMEs generally export to neighbouring markets, they import from a much wider geographical base.
TEC data essentially provide a 'Who's Who' of international trade. For example, they show that only a small percentage of firms is actually engaged directly in international trade, typically below 10% in OECD countries, with only a few exceptions – notably in small economies such as Slovenia and Estonia.
Moreover, as shown in Figure 1, the bulk of international transactions (in value) is concentrated among firms with more than 250 employees. In the United States for example, firms with more than 250 employees account for 72% of exports, and in a further ten countries – ranging from smaller economies such as Finland and Sweden to other large economies such as Canada, France, Germany and the United Kingdom – more than two-thirds of exports are accounted for by large firms.
The importance of large firms is further highlighted when examining the concentration of trade among the very largest firms (based on employee numbers) in each country. On average, the top 100 enterprises in OECD countries account for 40% of exports and imports. And in smaller economies, such as Finland, Hungary and Luxembourg, these shares can be significantly higher (up to 90%).
Across OECD member countries, 75% of manufacturing exporters also represent over half of importers. These two-way traders account for virtually all (98%) of manufacturing trade value. In Canada, which provides estimates for the total economy, (i.e. manufacturing and services) two-way traders account for around two-thirds of exporting firms, and one-quarter of importing firms; in terms of trade value, they account for three-quarters of exports and imports. The significant contribution of the two-way traders amongst manufacturers provides an indication of the importance of imports for exports (i.e. imports used in producing exports), and so the potential counter-productive nature of import tariffs.
Large firms tend to account for virtually all exports in (tangible) capital intensive industries such as motor vehicles and other transport equipment, as shown in Figure 4. In contrast, smaller firms make a larger contribution to exports of industries such as furniture, textiles and clothing, where specialized manufacturing, niche products, and investment in knowledge based assets, such as brand, design, and organisational capital (e.g. flexible production processes) provide opportunities to create comparative advantages.
The importance of large firms in manufacturing exports does however vary across countries. In the US and Mexico, for example, large firms dominate across nearly all sectors. This is likely to reflect a combination of the large size of the domestic US market as well as maquiladora (processing firms) relationships between Mexico and the US. On the other hand in France and Germany, SMEs are the key exporters in a number of sectors, such as apparel and textiles.
Compared to large firms, small firms are more likely to export to markets relatively close to their home country – evidence of the fixed costs related to breaking into new markets that tend to be relatively higher for smaller firms. Figure 3 shows this by illustrating the aggregated trade destinations for the ten European countries that report such data (Austria, Belgium, Czech Republic, Germany, Hungary, the Netherlands, Poland, Portugal, Slovak Republic and Spain). It shows for example that small firms (less than 50 employees) account for nearly 20% of trade with nearby destinations such as Germany, Italy and the Netherlands, but only for slightly more than 5% of exports to China, Japan or the United States. In many instances, this reflects the role of SMEs as upstream suppliers within, typically regional, value chains.
On the other hand, barriers to importing appear less onerous than those for exporting. For example SMEs accounted for over half of all imports from China and India into European countries, and over 40% of imports from the United States and Japan, possibly also reflecting affiliate relationships with parent MNEs from these countries.
TEC Statistics break down international merchandise trade statistics by the characteristics of the trading enterprise. The data are generally produced by national statistical authorities through the linking of microdata from the census of customs transactions (used for compiling national merchandise trade statistics) to a centralised business register containing both characteristics and reporting structure of all firms operating within that national boundary. This microdata linkage for TEC is facilitated by the possibility of using (or developing) common identifiers between the trade register and the business register, which also means that TEC statistics can be compiled without imposing additional burden on respondents.
There is growing appreciation within the international statistics community that microdata linking provides significant scope to better understand production in an increasingly globalised economy. New characteristics, notably whether the firm is foreign or domestically owned, have recently been added to TEC dataset, and efforts are ongoing to develop similar data for services trade. Increasingly, efforts are now also being made to integrate aspects of TEC within the heart of the statistical information system, such as structural business statistics, the national accounts and supply-use tables, not least to provide a holistic perspective on the nature of trade, production and investment. The OECD for example, as a response to the G20, recently developed estimates of the upstream contribution to exports made by SMEs.
One caveat in the interpretation of the role of SMEs in international trade is that throughout the international statistical system, firm size is currently defined at the enterprise level, and that these enterprises may still be part of a larger enterprise group. Pilot studies are being developed to identify such dependent SMEs from independent SMEs.
For further information please contact the OECD Statistics Directorate at [email protected].