Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Today’s port story

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Actually the original article is more about how the global credit crisis is much worse than earlier crises because the system is “overoptimimized”

But the paragraphs I want to draw your attention to are below

As for the vulnerabilities across multiple fronts, one need look no further than the world’s ports. The financial crisis has slowed many to a crawl as exporters worry that importers on the other side of the ocean may not be able to pay them. Banks are reluctant to issue letters of credit guaranteeing payments when they can’t be sure the bank on the other side of the transaction is sound. This has driven dry cargo rates down 90 percent from their highs this year forcing some shipping companies to simply idle freighters. In addition, several shipping companies are on the verge of bankruptcy. And, that means orders for new ships are plummeting as well driving shipbuilders toward bankruptcy or at least consolidation.

The tight coupling and vast size of the globe’s major economic actors, once hailed a triumph for economic efficiency, has now become an Achilles’ heel. Only a few months ago the globe’s just-in-time delivery system was strained beyond the limit. Now, as demand has fallen off a cliff, it’s spewing out so much stuff that the Port of Long Beach doesn’t know where to put all the imported cars coming ashore. Feast or famine, the system wasn’t designed for surges or sudden drops in demand.

Now the question that occurs to me is how long is the current crisis going to last? No one seems to know so the general reaction is to “hunker down”. Those who have jobs are busy paying off the credit cards as fast as they can. Companies are cutting frills – like office parties, trips to conventions and so on. But those “frills” are someone else’s job. It is not just that no-one can borrow more money, no one feels confident that they will be able to pay off their debts if things keep declining. So this spiral of lack of confidence continues. This is not a good time to be considering expanding the port.

But at the same time the great opportunity to change direction is not being perceived by the current federal government.

Times of global economic uncertainty have caused priorities to shift.

Whereas not long ago Canadians listed the environment as their number one concern, the economy has understandably jumped ahead to take over top billing.

However, our government was right to long-ago state that, always, we would fight climate change by striking an acceptable balance between measurable environmental progress and steady economic growth and prosperity.

One must not – ABSOLUTELY CANNOT – come at the expense of the other.

If this means re-examining the way forward in the face of present-day economic realities, then so be it.

But please, don’t misinterpret the facts.

This government is still determined to move ahead, but will do so prudently. To do otherwise – to take short-term action that could jeopardize our ability to make long-term progress – would simply be short-sighted and in nobody’s best interests.

We will not – and let me be clear on this – aggravate an already weakening economy in the name of environmental progress.

This is Jim Prentice Minister of the Environment to the Bennet Jones Lake Louise World Cup Business Forum November 28, 2008

But he does seem to be quite happy to weaken the environment if someone tells him that will be good for the economy. (The Port is still federal jurisdiction, don’t forget) The port expansion would fail any objective environmental assessment – but not Canada’s.

The opportunity is the one that has been recognised by other countries. The Danes are now world leaders in wind powered electricity generation. The Swedes are successfully weaning themselves off oil altogether. The Norwegians – another major oil producer – have managed to both reduce ghg emissions and increase their GDP.

What Canada should have done – and still could – is to look at what the world will be like shortly, and what kind of changes need to be made to our economy to deal with that. All we are doing now is moving the deckchairs on the Titanic. We like to think of ourselves as great hockey players – like Gretzky who skates to where the puck will be. But we have continued to try and steer by studying our wake, not by looking ahead.

Or, if you really want to feel gloomy read the rest of this

Earth’s climate appears to be changing more quickly and deeply than a benchmark UN report for policymakers predicted, top scientists said ahead of international climate talks starting Monday in Poland.

(Acknowledgements – this post was made possible by posts to the BCEN LW list by Bill Henderson)

Written by Stephen Rees

November 30, 2008 at 12:05 pm

Posted in Economics, Environment

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