The Impact of the Oil Shock: Trade Networks ShrinkPosted by Editors in International Economics on Monday, July 7. 2008 This is a guest blog post by Donald Stadler, an American living and working in London: Washington Post economics columnist Robert Samuelson recently wrote a piece about the trade impact of the oil shock on the US, quoting economist Jeffrey Rubin of CIBC World Markets, who predicts that oil will go to $225 a barrel/$7 a gallon before this is finished. Apart from the obvious impact on per-liter fuel prices in Europe (I have heard of diesel prices as high as £1.99 a litre in the UK), there are some interesting side effects on world trade. The bottom line is that shipping cheap manufactures thousands of miles make much less sense than it has this past decade. Since 2000 the cost of shipping a 40 foot shipping container from East Asia to the US has gone from $3000 to $8000, and if oil prices go to $200 a barrel this will go to $15,000 per container. Some production will be brought back to the US and Europe, and other production will go from Asia to nearby low-wage countries like Mexico (for the US) and Poland/Bulgaria/Romania, and perhaps Russia and Turkey (for the EU). This may be good news for factory workers in Italy and in depressed areas of Germany and the UK. Continue reading "The Impact of the Oil Shock: Trade Networks Shrink" High Demand Or Rather An Oil Bubble?Posted by Sonja Bonin in International Economics on Friday, May 23. 2008 A tip from our reader Don has led us to an article in the London Times. In it, economics columnist Anatole Kaletsky argues that the astronomical oil price is not caused by economic fundamentals like supply and demand,
The article quotes a book by George Soros which is available on Amazon.de or Amazon.com. Global Oil Panic: The United States of AmericaPosted by Nanne Zwagerman in US Domestic and Cultural Issues on Wednesday, April 30. 2008
Oil prices are on the up and up, setting new records at the pump. Each time this happens, a spate of panicky reactions in national politics, all isolated from each other, burst up. First, a brief look at the state of the debate in the USA:
In the USA, McCain has proposed reacting to the higher oil prices by temporarily cutting taxes. This is in keeping with the Republican solution to everything -- cut taxes. Hillary Clinton has jumped on the McCain tax cutting train, hoping to draw more contrasts with Barack Obama. Meanwhile, Obama finds himself in the same camp as George W. Bush in opposing a symbolic tax holiday. A few paragraphs from the New York Times, via Drezner:
Continue reading "Global Oil Panic: The United States of America" Boeing's New "Greener" 787 AirlinerPosted by Joerg Wolf in International Economics on Friday, July 13. 2007
The Times Online:
The lower weight and fewer parts mean that the 787 should use 20 per cent less fuel and require 30 per cent less maintenance than its predecessors. Boeing said that the model would make less noise and its Rolls-Royce and General Electric engines pollute less than those in equivalent-sized jets.Sounds like good environmental progress! I have not found any definitive information, but a few articles suggest that Boeing jets have been more fuel efficient than Airbus jets in the past and that Boeing will continue to lead with the new airliners. Does anybody know more details and direct comparisons? Meanwhile, Forbes writes about the Airbus vs Boeing competition: Airbus took 680 firm orders in the first half of 2007, according to figures published on its website today, and has overtaken US rival Boeing which notched up 544 orders for the year to July 3. Airbus also outperformed its US rival in terms of deliveries over the period, reporting a record 231 for the first half of the year. Sweden's IKEA Promotes Environmental Consciousness in the United StatesPosted by Joerg Wolf in International Economics, US Domestic and Cultural Issues on Monday, March 5. 2007
Quote from a Reuters article on MSNBC
Sweden's IKEA will charge U.S. customers five cents for disposable plastic shopping bags in what the international furniture giant said on Wednesday was a first step to ending their use altogether. IKEA said the decision to stop giving away free bags to customers aimed to reduce the estimated 100 billion bags thrown away by all U.S. consumers each year.The NGO Reusable Bags mentions similar statistics: "According to The Wall Street Journal, the U.S. goes through 100 billion plastic shopping bags annually. An estimated 12 million barrels of oil is required to make that many plastic bags." This contributes a bit to dependency on foreign oil and global warming, in addition to increasing the shopping costs to consumers by 4 billion dollars annually. Plastic bags pollute the air in the production process and later pollute the soil of landfills or kills sea animals, writes Reusable Bags in The Real Cost of "Free". I don't know how many plastic bags the average German or European consumes, but it is definitely too many. Germans produce increasingly less trash, but it is still too much. From the British ITV News: Analysis by the Local Government Association revealed that UK households send almost 27 million tonnes of rubbish to landfill every year. This is equivalent to almost half a tonne for every home in the country. The figures also show that Britain sends seven million tonnes more rubbish into landfill than any other country in Europe. Germany, which has a population 25% larger than the UK, disposes of less than half the amount of rubbish into the ground. Positive US Media Coverage of Environmentalism in GermanyPosted by Joerg Wolf in Fulbright, German Politics, Transatlantic Relations on Tuesday, February 13. 2007
The Christian Science Monitor has an interesting article about "New German community models car-free living:"
It's pickup time at the Vauban kindergarten here at the edge of the Black Forest, but there's not a single minivan waiting for the kids. Instead, a convoy of helmet-donning moms - bicycle trailers in tow - pedal up to the entrance. Welcome to Germany's best-known environmentally friendly neighborhood and a successful experiment in green urban living. The Vauban development - 2,000 new homes on a former military base 10 minutes by bike from the heart of Freiburg - has put into practice many ideas that were once dismissed as eco-fantasy but which are now moving to the center of public policy.US Blogger Andrew Hammel commented on this article in German Joys and concluded: "As this article shows, Germany's far-sighted environmental policies also earn positive press internationally." Recently, EU Commissioner for Environment Stavros Dimas blasted Germany for not setting a good example on environment protection.The German government first opposed EU plans for stricter car emissions, but then reached a compromise on Germany's general greenhouse gas emissions, writes Reuters. Following are two more examples of positive US press coverage of energy saving in Germany/Europe, which serve as counter-examples to the claim that the US coverage of Germany is not diverse enough. • A New Yorker travels to Germany and the Czech Republic, encounters regular energy saving technology and several simple services that work on demand only in order to save energy and then writes about it in his blog at Dailykos. • "Home importer turns to Europe for quality, speed and energy efficiency, not to mention looks," writes the Rocky Mountain News: The obvious question: Why would anyone go to the trouble and expense of shipping an entire home here from overseas? "Quality, speed and energy efficiency," says Meier, a German-born wood importer who has since started his own company, Platz Haus USA, in hopes of doing the same for other would-be homeowners. In January, his first client, Mary Ellen Vaughan, watched her 2,000-square-foot German chalet go up in a matter of days in Salina, down the road from Meier's house. "Everything you can imagine went wrong weatherwise, and we were still able to build it in a week," says Meier. While U.S. home-builders beg to differ, Meier argues that European homes tend to be better-built for many reasons: Because families own their homes far longer, the homes are "built to last," using slow-growing Nordic timber that has tighter rings and, thus, makes stronger boards. Because fuel costs have always been higher and government regulations tighter, energy efficiency in Germany is top priority. Walls tend to be thicker and better-insulated, passive solarheating is the norm and building materials are greener, he says. And they're beautiful.Personal comment: Energy efficiency saves money, protects the environment, and decreases our dependency on oil and gas rich countries and reduces the threats from terrorism. No need to be a rocket scientist to figure that out, but Europeans and American still have a long way to go in terms of improving energy efficiency. Advice on saving energy: Dr. Steffen Schmuck Soldan, the Regional Coordinator of the Fulbright Alumni in Berlin, works for co2online, a German non-profit limited liability company that is campaigning for a reduction in emissions of the environmentally harmful gas carbon dioxide (CO2). Co2online provides quick and specific advice on various aspects of residential heating, energy-saving modernisation, and subsidies. They help home owners and tenants to evaluate their residential energy consumption and to cut costs and CO2-emissions. More information about co2online and the online advisors. Endnote: A gas station in Omaha, Nebraska, claims to sell only Terror-Free Oil: The Terror-Free Oil Initiative is dedicated to encouraging Americans to buy gasoline that originated from countries that do not export or finance terrorism. We educate the public by promoting those companies that acquire their crude oil supply from nations outside the Middle East and by exposing those companies that do not. We are also looking into creating a healthy debate concerning alternate methods of fuel production and consumption. Thomas Friedman: Energy Cooperation Will Unite the WestPosted by Joerg Wolf in German Politics, International Economics, Transatlantic Relations on Tuesday, November 7. 2006
"Since the fall of the Berlin Wall, the Western allies have been asking: What will replace the threat of communism as the cement that holds together the Atlantic alliance? Some have argued terrorism, but I don't think so. I think my German friends have the best idea: the issue that will and should unite the West is energy and all its challenges." writes Thomas Friedman in his column "Allies Dressed in Green" in the NY Times (subscribers only) (HT: Elmer):
After all, nothing is a bigger threat today to the Western way of life and quality of life than the combination of climate change, pollution, species loss, and Islamist radicalism and petro-authoritarianism --all fueled by our energy addictions. And no solution is possible to these problems without concerted government actions to reduce emissions, to inspire green innovation and to shift from oil to renewable power. Therefore, green is not just the new red, white and blue — the next great American national security project -- it should also be the color, focus and cement of the Atlantic alliance in the 21st century. As a German official remarked to me, "The whole issue has the potential of becoming a big trans-Atlantic project at a time when we have no other good big project that [embodies] a vision." (...) Germany's foreign minister, Frank-Walter Steinmeier, recently gave a major address on how "energy security will strongly influence the global security agenda in the 21st century."The biggest obstacles he sees are European opposition to genetically modified crops and nuclear energy and President Bush's lack of environmentalism: "One reason President Bush has failed to become the leader of the West is because he has failed to lead on green, which has become so important to all our allies." Ah, apparently the phrase "leader of the West" is still in use. On "leadership" see Atlantic Review post about "Germany's Comeback" and Leadership. Gabor Steingart makes another suggestion to keep the Euro-American alliance vital: A transatlantic free-trade zone could be like a "NATO for the World Economy." Comparing Chancellor Merkel's and Schroeder's Perception of Russia and the USPosted by Joerg Wolf in German Politics, Transatlantic Relations on Wednesday, October 25. 2006
Ex-Chancellor Schroeder is giving outspoken and controversial interviews to promote his autobiography. He is very critical of Chancellor Merkel, the trade unions, and of the growing influence of religious conservatives in the US, while at the same time defending Russia's president Putin.
As probably most Germans (and perhaps even Schroeder), Chancellor Merkel considers the US-German friendship much closer than the German-Russian strategic partnership. Continue reading "Comparing Chancellor Merkel's and Schroeder's Perception of Russia and the US"
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Farmers, Environmentalists and Anti-AmericansPosted by Editors in International Economics, US Domestic and Cultural Issues on Wednesday, October 4. 2006
Due to pressure from Midwest farmers and agribusinesses, the United States has imposed a 54-cents-a-gallon tariff to prevent Americans from importing sugar ethanol from Brazil, writes Thomas Friedman in the NY Times (subscribers only):
Yes, you read all this right. We tax imported sugar ethanol, which could finance our poor friends, but we don't tax imported crude oil, which definitely finances our rich enemies. We'd rather power anti-Americans with our energy purchases than promote antipoverty.However, he also mentions that the Brazilian government is considering the expansion of the ethanol industry, which "could destroy the cerrado, the Brazilian savannah, another incredibly species-rich area" like the Amazon. "No wonder environmental activists are holding a conference in Germany this fall about the impact of biofuels. I could see some groups one day calling for an ethanol boycott - a la genetically modified foods - if they feel biofuels are raping the environment." Friedman, however, thinks ethanol can be promoted and the environment protected at the same time, if all involved parties sit down early. Anti-Americanism and Anti-SemitismPosted by Joerg Wolf in German Politics, Transatlantic Relations on Sunday, August 27. 2006
Two months ago, the burning of an American flag along with a copy Anne Frank's diary (Amazon.com, Amazon.de) has sent shockwaves across Germany. From the European Jewish Press:
More than 100 villagers had gathered on June 24 to celebrate the summer solstice in Pretzien, a village south of Magdeburg in the east German state of Saxony-Anhalt, with a dance and a bonfire. (...) According to the 'Tagesspiegel' newspaper, three local far-right extremists present in the crowd, aged 24, 27 and 28, threw both a US flag and 'Anne Frank: Diary of a Young Girl' onto the pyre with one man saying: "I commit Anne Frank to the fire." The scene was evocative of the infamous bonfires organised by the Nazis in 1933 in Berlin and across Germany to rid the Third Reich of "degenerate books".This book burning was a singular incident in modern Germany and should not be used for exaggerations. Though in general there are strong links between Anti-Americanism and Anti-Semitism, argues U.S. Fulbright Alumnus Andrei S. Markovits, a political science professor at Ann Arbor and expert on German politics and European culture and soccer, in his book Amerika, dich haßt sich's besser. Antiamerikanismus und Antisemitismus in Europa (Amazon.de). The book cover shows a graffiti claiming that Presidential Candidate "Kerry is a Jew too." The book was published in October 2004 and is only available in German, but Dialog International has written a review in English. Besides, two English working papers by Prof. Markovits can be downloaded as PDF files: "Twin brothers": European Anti-Semitism and Anti-Americanism and European Anti-Americanism (and Anti-Semitism): Ever Present Though Always Denied. I have read one of the working papers about a year ago and found his historical analysis and many arguments convincing, but some arguments about the strong ties between Anti-Semitism and Anti-Americanism not so much. Now, after the burning of the Anne Frank Diary along with the American flag, I will need to re-read the working paper or wait for Prof. Markovits' upcoming book Uncouth Nation: Why Europe Dislikes America (Amazon.com, Amazon.de), which will be available in the U.S. on December 15, 2006 and in Germany in February 2006. Prof. Markovits described his earlier book Amerika, dich haßt sich's besser as the basis for the upcoming book. Following is a snyopsis of Uncouth Nation: Continue reading "Anti-Americanism and Anti-Semitism"
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Bush interview with German TV about Merkel's soul, transatlantic cooperation on Iran, Guantanamo, climate changePosted by Joerg Wolf in Transatlantic Relations on Monday, May 8. 2006
In an interview with the German talk show host Sabine Christiansen, President Bush stresses the need to pursue a common strategy to solve the Iran issue diplomatically and explains why Washington is not talking directly to the Iranians. He tried to calm down the wide-spread concern of another war in the Middle East, by assuring that "we're at the beginning of the diplomatic process, not the end of the diplomatic process."
Christiansen confronts him with the CIA rendition flights and the European perception that the Iraq war has made the world less safe. She also asks a few tough questions on Guantanamo and the US dependence on oil, but she does not follow up, when President Bush gives some surprising answers. In addition, President Bush impresses with comments on climate change and by knowing the price of gasoline in Germany and by stating that "we've got to change our habits when we're driving our cars." Let's see if his image improves in Germany. Continue reading "Bush interview with German TV about Merkel's soul, transatlantic cooperation on Iran, Guantanamo, climate change" Germany's Energy Summit should reduce dependence on Russian oil and gasPosted by Joerg Wolf in International Economics on Monday, April 3. 2006
Industrial leaders, trade unions and politicians are meeting today to discuss long-term energy security, diversification and free-market reforms. The International Herald Tribune explains that Germany is one of the most energy dependent EU countries:
The energy sector is heavily dependent on oil and gas. Mineral oils make up 37 percent of needs, but 97 percent is imported, a third coming from Russia. Gas accounts for 23 percent of consumption, of which more than 80 percent is imported, 37 percent from Russia. (...) With growing dependence on Russia for its energy, some politicians say it is time to diversify sources. The coalition's energy experts also agree that Germany needs a policy that is much more aggressive in dealing with global warming, promoting efficiency and becoming economically competitive.Germany's dependence on Russia is much stronger than US dependence on Saudi Arabia and Venezuela. The IHT quotes Friedemann Müller, an energy expert at the German Institute for International Policy and Security: Germany's energy policy has for years been influenced by the big companies that have hampered competition and have done their best to prevent diversification of energy sources because it would undermine their position in the market. These policies damage our economy and our competitiveness. (...) For 20 years Ruhrgas, which has long term contracts to import gas from Russia, has owned a piece of property at one of the big harbors where it has blocked the building of such a terminal because it would undermine their monopoly on the domestic gas market.Recently it was revealed that the Schröder government offered a government loan guarantee for the Russian pipeline project. Merkel's long-term energy concept is not expected till 2007. Today's energy summit is overshadowed by a debate to use nuclear power longer than previously decided. If you would like to save energy and money, check out the Online Advisor for fridges, freezers, heating and pumping systems. Fulbright Alumnus Steffen Schmuck-Soldan, PhD, works for the NGO co2online, which created them.
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