| Is There a Climate Bubble? Posted: 23 Jun 2014 08:32 PM PDT Here's the question of the day: Is there a climate bubble? In a New York Times op-ed, former treasury secretary Hank Paulson says there is. He calls it The Coming Climate Crash. For too many years, we failed to rein in the excesses building up in the nation's financial markets. When the credit bubble burst in 2008, the damage was devastating. Millions suffered. Many still do.
We're making the same mistake today with climate change. We're staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked.
This is a crisis we can't afford to ignore. I feel as if I'm watching as we fly in slow motion on a collision course toward a giant mountain. We can see the crash coming, and yet we're sitting on our hands rather than altering course.
We need to act now, even though there is much disagreement, including from members of my own Republican Party, on how to address this issue while remaining economically competitive. They're right to consider the economic implications. But we must not lose sight of the profound economic risks of doing nothing.
The solution can be a fundamentally conservative one that will empower the marketplace to find the most efficient response. We can do this by putting a price on emissions of carbon dioxide — a carbon tax.
Fewer than 10 years ago, the best analysis projected that melting Arctic sea ice would mean nearly ice-free summers by the end of the 21st century. Now the ice is melting so rapidly that virtually ice-free Arctic summers could be here in the next decade or two. The lack of reflective ice will mean that more of the sun's heat will be absorbed by the oceans, accelerating warming of both the oceans and the atmosphere, and ultimately raising sea levels.
Even worse, in May, two separate studies discovered that one of the biggest thresholds has already been reached. The West Antarctic ice sheet has begun to melt, a process that scientists estimate may take centuries but that could eventually raise sea levels by as much as 14 feet. Now that this process has begun, there is nothing we can do to undo the underlying dynamics, which scientists say are "baked in."
Some members of my political party worry that pricing carbon is a "big government" intervention. In fact, it will reduce the role of government, which, on our present course, increasingly will be called on to help communities and regions affected by climate-related disasters like floods, drought-related crop failures and extreme weather like tornadoes, hurricanes and other violent storms. Ironies AboundPauslon argues along the lines of "to reduce big government, we need more of it". This is of course similar to the Vietnam war analogy "we must destroy the village to save it", or George Bush's famous solution: "I've abandoned free market principles to save the free market system". Curiously, Paulson believes there is nothing we can do to undo the underlying dynamics, which scientists say are "baked in.". If indeed global warming is baked in, why spend billions of dollars in a foolish attempt to prevent the inevitable? Wouldn't it be better to spend billions of dollars on something else? Apparently not. Let's now answer the original question: Is there a climate bubble? Yes, Virginia, of course there is. When people think man can stop climate change patterns that last tens of millions of years, when people think a map of the last 100 or even 1000 years of climate change predicts the futures, and when Republicans tout big government to stop big government even though the results are "baked in", the appropriate words to describe the setup are indeed "climate bubble". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| French Private Sector Contracts Second Month; Eurozone Composite Growth Weakest in 6-Months Posted: 23 Jun 2014 12:00 PM PDT The Markit Flash Eurozone PMI shows Eurozone growth slows to six-month low despite strengthening periphery. Key Points
- Flash Eurozone PMI Composite Output Index at 52.8 (53.5 in May). 6-month low.
- Flash Eurozone Services PMI Activity Index at 52.8 (53.2 in May). 3-month low.
- Flash Eurozone Manufacturing PMI at 51.9 (52.2 in May). 7-month low.
- Flash Eurozone Manufacturing PMI Output Index at 52.8 (54.3 in May). 9-month low.
Eurozone economic growth slowed for a second month running in June, easing to the weakest since December, according to the flash reading of the Markit Eurozone PMI. Growth remained robust in Germany despite weakening slightly, and France‟s downturn deepened. Elsewhere across the region, however, growth was the strongest since August 2007. The headline index covering output of both manufacturing and services fell from 53.5 in May to 52.8, dropping further from April‟s 35-month high. Despite the slowdown, the average PMI reading for the second quarter as a whole was the highest since the second quarter of 2011. Output has also now risen for 12 consecutive months. Output rose at identical rates in manufacturing and services, but the rates of growth slowed in both cases to nine- and three-month lows respectively. In a sign that activity may reaccelerate, the survey's measure of new orders rose to its highest since May 2011, driven by the service sector. A slowing in growth of manufacturing new orders to the weakest since October pointed to ongoing sluggish production growth in coming months, while service sector companies report ed the largest inflow of new business for three years. The service sector also saw business expectations about the year ahead improve to the second-est seen over the past three years. French Private Sector Contracts Second MonthThe Markit Flash France PMI shows French Private Sector Contracts Again in June. Key Points
- Flash France Composite Output Index down to 48.0 (49.3 in May), 4-month low
- Flash France Services Activity Index falls to 48.2 (49.1 in May), 4-month low
- Flash France Manufacturing Output Index falls to 47.1 (50.3 in May ), 6-month low
- Flash France Manufacturing PMI drops to 47.8 (49.6 in May), 6-month low
Summary
June's flash PMI data painted another picture of subdued economic performance in France, with output down for a second successive month, orders falling slightly and the sharpest cut in staffing levels for four months. After accounting for seasonal factors, the Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, posted a reading of 48.0 in June. That was down from May's 49.3 and a four-month low. The decline in output was broad-based, with both manufacturers and service providers registering reductions since May. Goods-producers saw output decline to the sharpest degree in half-a-year; services companies the greatest in four months. Weighing on total output was a marginal fall in new orders.
The continuation of soft trends in output and new orders weighed on staffing levels in June, with a net decline in private sector employment recorded for the eighth month in a row. Latest data marked the sharpest overall fall for four months, with manufacturers recording a relatively sharper fall in headcounts than service providers. Further signs of excess capacity in the private sector were provided by the latest backlogs of work data, which showed a marginal contraction for the second month in a row. On the price front, input price inflation accelerated in June to a five-month high. Manufacturing costs rose for the first time since January, while service sector input price inflation rose to a stronger degree.
In contrast, competitive pressures and soft underlying demand continued to weigh on the pricing power of firms in June. Average output charges were cut for a twenty-sixth month in a row, with service providers registering the more marked reduction (manufacturing output prices were lowered to a modest degree). France GDP AnalysisFrance is back in recession, with rising costs and falling output prices as well. Thank the socialist policies of Francois Hollande for this result. Government spending accounts for close to 57 percent of French GDP, a truly inane percentage. IBTimes reports Francois Hollande: France Faces €50bn More Public Spending Cuts. Now? Of course not! Hollande's spending cuts will amount to 4% of French GDP and will take place between 2015 and 2017. As a whole, public spending accounts for 57% of GDP, one of the highest rates in Europe.
The country's finance ministry has a budget deficit equivalent to 4.1% of GDP, well above the 3% level agreed by the European Union under the Maastricht Treaty.
French public debt is also in breach of Maastricht standards, which dictate it must not get above 60% of GDP. It is forecast to hit 95.1% in 2014. Just servicing the debt will cost €46.7bn (£39bn, $64bn) a year. Periphery Will Not Carry EuropeWhile growth returns to the periphery, the periphery is not going to carry Europe. Growth in Germany will turn negative says Saxo Bank chief economist Steen Jakobsen, and I agree. For details, please see Coming Major Slowdown in Germany - How to Play It. Also see Steen's Wine Country Conference II presentation, touching the same subject. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Robot Truck Convoy Tests in Nevada; Driverless Trucks Before Cars, and Before the End of the Decade Posted: 23 Jun 2014 02:28 AM PDT I have discussed driverless trucks before, but the timeline keeps speeding up. Self-driving trucks before the end of this decade used to seem like a remote possibility. It now seems very likely, if not a given. Moreover, driverless truck convoys will be safer and more fuel efficient than human-driven trucks. " The technology, developed by Peloton Tech, uses radar and a wireless link so that the following trucks travel at the same speed, braking simultaneously for safety, and doing so on an automated system that doesn't have the delays of human reaction time. In addition, the drivers of both vehicles also have a video display, expanding both drivers' vision and reducing blind spots," reports Popular Science in Robot Truck Convoy Tested In NevadaTrucks Before CarsTech Hive reports The First Driverless Cars Will Actually be a Bunch of Trucks. The future of driverless driving is all about trucks. So forget about that sensor-equipped Volkswagen Passat, and get ready for a 40-ton Peterbuilt 18-wheeler.
In the wake of new U.S. Department of Transportation guidelines for automated-vehicle testing, experts such as Ümit Özguner, a professor with Ohio State University's Center for Automotive Research, are predicting that the first wave of operational autonomous vehicles will be devoted to long-haul deliveries. This is about moving cargo, not people.
"The trucking industry is very interested in going from single trucks to convoys of trucks. One human driver with perhaps three other trucks behind it," Özguner told TechHive. "Those three wouldn't necessarily have a driver in them. Eventually you could imagine removing the first driver too."
[above]: A Japanese government research program is now testing driverless truck convoys that are designed to improve fuel economy.
In late May, the U.S. Department of Transportation opened the door for road-testing self-driving trucks by publishing policies for the three states that currently allow driverless vehicles: California, Nevada, and Florida. These guidelines open the door for driverless tests of all kinds. Overseas, meanwhile, experiments with driverless truck convoys—also known as "platoons"—have been under way for years.
"[Long-haul trucking] is the most realistic starting point for the commercial adoption of the technology. The long-haul vehicles have the most to gain, both in terms of safety and economic benefits," says Mike Baker, the chief engineer at Ricardo UK Ltd, the lead firm of SARTRE. "The fuel savings witnessed by trucks in a platoon has a significant impact on the operating profits of the operator, not to mention the environmental impact of reduced CO2 and emissions."
In the future, cars will be driving themselves through all sorts of environments, "but that's quite a ways off," says Dan Flores, General Motors' advanced-technology spokesperson. "We're [developing semiautonomous technologies] only with highways in mind because you have the ability to stay in one lane for a long period of time. There's a lot more predictability there."
In the coming years, car manufacturers will continue to introduce incremental, semiautomated technologies designed for situations that don't require interacting with too many other drivers (examples already include automated parallel-parking systems and cruise control). Flores told TechHive that before the end of the decade, GM hopes to release a technology called Super Cruise that will marry adaptive cruise and lane controls, and will allow any vehicle to safely navigate itself over long stretches of highway. Millions of Trucking Jobs Will VanishSupply Chain also says Trucks Will Drive Themselves Before Cars Do. Driverless truck experiments are already underway in Japan and Europe, and now testing of semi-autonomous trucks has begun in Nevada. Here are the reasons why they're destined to succeed — and why you'll probably pass a driverless semi before you ever see a self-driving car.
Computers Are Cheaper and More Flexible Than Humans
The most immediate reason why driverless technology will doom truckers is the same reason it'll be the end for cab drivers: the cost of a machine operating a vehicle will be dramatically cheaper than the cost of a human.
One of the things that drive up the cost of drivers is the simple fact that long-haul trucking is a much more unpleasant lifestyle than driving a cab. Many drivers spend five or six days a week on the road, which is why trucking has such an extraordinarily high turnover rate (about 98 percent annually) and why the industry constantly struggles to find enough drivers, even when unemployment is high.
Obviously, machines won't care about these lifestyle difficulties. In fact, the Australian mining company Rio Tinto has already begun implementing autonomous trucks at its remote iron ore mines, partly because it's so expensive to get drivers to come live in those places.
Driverless Technology Will Be Ready For Highways First
Engineering a vehicle that can drive at a constant speed on a predictable highway is a much simpler problem than designing one that can drive on city streets, which are filled with traffic lights, pedestrians, and other sudden obstacles.
Between 20 and 40 percent of the cost of shipping something by truck goes to fuel. A large amount of this fuel is simply burned as the engine fights air resistance, because trailers are so boxy and unaerodynamic. One way of cutting down on it is driving trucks in tight packs, so one can draft behind another.
Of course, it's not safe for human drivers to draft off each other in this way, because it doesn't allow for enough reaction time if the truck in front stops suddenly. But computers can do it, and recent tests in Nevada showed just how much fuel they can save.
The experiments by Peloton, a company that's developing truck caravan technology in partnership with the Department of Transportation, showed that while traveling at 65 miles per hour 36 feet apart, two trucks packed together saved seven percent on fuel. This was the average for just two trucks (the lead saved 4.5 percent, and the rear saved 10 percent), so it should increase as trains get longer.
What Obstacles Need To Be Overcome For Driverless Trucks?
The factors that block a broad rollout of self-driving trucks fall mainly into two categories.
One is safety. People are understandably concerned about the idea of computers driving cars around on the roads, and those worries are amplified for tractor-trailers that can weigh up to 80,000 pounds when fully loaded.
But experts actually predict that automated systems will make trucking safer, by eliminating distracted driving and human error. And Google's driverless cars, at least, have now gone more than 700,000 miles without an accident.
The other problem is legal. Right now, just a few states (including California, Nevada, and Florida) have laws on the books regarding driverless cars, and their legal status as a whole is murky. For driverless trucking on Interstates to be practical, all states would need to explicitly allow these vehicles on public roads.
Advocates are hopeful that national legislation will solve this problem. It's all very uncertain, but in 2012, Google's Sergey Brin predicted the Department of Transportation would begin regulating autonomous vehicles nationally as early as 2017. Last MileI first wrote about driverless trucks on August 5, 2013, in Message to 5.7 Million Truck Drivers "No Drivers Needed" Your Job is About to Vanish. On May 25, 2014 I discussed " last mile" and objections by truck drivers in denial about what is going to happen. Let's assume someone has to load the truck. Let's also assume an actual skilled driver has to dock the truck and make the final delivery (arguably a bad assumption).
Yet, even if those assumptions are true, nothing stops a trucking company from having distribution facilities right off an interstate near major cities, where local drivers deliver the goods the last mile.
Why can't all but the last few miles be driverless even if a skilled driver is needed some step of the way for safety reasons?
Technology marches on at a breathtaking pace. We might actually see commercial driverless vehicles on the roads within a few years. Driverless trucks are looking more and more likely before the end of the decade. Millions of jobs will vanish when it happens. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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