How to Reduce Trade's Environmental Impact
Aktualisiert: 10. Juni 2019
Some firms engage voluntarily and comprehensively for environmental preservation. But let us be honest: Most do not and these firms need a “more pronounced invitation” to act – to be candid. Therefore, I am in favor of regulation as long as it carefully considers potential side effects and is designed prudently and appropriately. The internalization of costs for pollution which are currently externalized is one step. However, in international transportation, it might not lead to desired effects given the previous discussions. In what follows, I highlight some areas where help from those designing the context where managerial action enfolds in is warranted.
Starting with manufacturing companies, I sense that most European companies have excellent skills in designing products using virgin materials. Instead, they often lack the infrastructure and the skills of using material stored in end-of-use products as input for production. From my point of view, associated capabilities in so-called “cradle-to-cradle design” (i.e. re-inserting used materials into the lifecycle) will be crucial and should be encouraged. The trashes are right here in front of our doors, so almost no transportation needed.
Although consumer awareness about the environmental impact of their consumption behavior increased steadily the last years, their behavior changes only slowly. Here, I think, more and continuous information, provision of best practice examples, and easy-to-implement solutions are in need.
Logistics service providers are well aware of climate change and understand their role in it. But most feel left alone with solving the issue. Even if they are willing to invest in cleaner transportation vehicles, they face three challenges: First, the technology is often not available. While German automotive companies offer electric passenger cars, the offer of electric or liquid hydrogen fueled trucks is (almost) zero. For container ships, the situation is even worse. Second, the prizes for the few “clean” transportation vehicles on the market are much higher than those of traditional diesel-engine trucks. This impedes large scale investments into these technologies. Third, the infrastructure is largely missing. To date, there are almost no stations to re-charge batteries or refill liquid hydrogen. The same holds true for the infrastructure at major ports in Europe and internationally. In all of these domains, political leaders can help to keep things moving.
Lastly, I would also encourage the continuous dialogue with the International Maritime Organization. As the International Maritime Organization is an institution than can design, implement, and control standards in international shipping, it should be on board of efforts to mitigate climate change.