Year: 2019

City of Malaga offers ‘the benefits of a modern city, but not the headaches’

Posted on by The New Economy

Malaga – Spain’s sixth-largest city – has been transforming itself into an innovative smart city. Home to one of the region’s most important technology parks, the opportunities for innovation and – of course – beautiful Mediterranean climate, have attracted people from over 150 different countries to make Malaga their home. Marc Sanderson, Director of International Economic Development for the City of Malaga, explains his office’s mission, the support it offers to businesses seeking a new home in Europe, and the benefits of living and working in Malaga.

The New Economy: Marc, what’s the core mission – the ambition – at the heart of the work you’re doing for the city?

Marc Sanderson: Well, as an employee for the city of Malaga, we certainly want to provide a better quality of life and jobs for the citizens of Malaga. And the best way we can do that is provide a dynamic and diverse economy. So right now we’re trying to help local companies expand their trade and services around the world, as well as bring international businesses to Malaga. We feel there’s a lot of benefits that the city offers to international companies when they relocate in Malaga, and they obviously create jobs, spend money, and create value for the city.

From the city we offer soft landing services, so we help companies do initial analysis of Malaga and the market, and find out prices for employment, as well as for office space, so they can get a general idea of what it’s going to cost. Try and make it as easy as possible for them to take away the headaches of what it may be to open up a location in the city, as well as provide visas if they’re bringing employees outside of the European Union.

The benefits I think are the operating costs overall. The general cost of living in Malaga is fairly cheap; for office space, but also energy, transportation. So you can offer businesses a way to save money.

The New Economy: And being in Malaga, those businesses can then offer their employees just a wonderful quality of life?

Marc Sanderson: Sure – Malaga’s obviously on the southern coast of Spain, so it enjoys the Mediterranean lifestyle. So it’s a very easy city, enjoyable city to live in.

We always say that it has lots of the benefits of a major city, but not all the headaches: traffic and pollution and congestion. And certainly for myself, the work-life balance: you know, being able to allow my kids to enjoy the beach and at the same time being able to work in a city like Malaga. So for little money you can enjoy a great life on the Mediterranean Sea. So that’s an added plus for the employees; but again, the businesses are also benefitting from the lower costs.

The New Economy: What has changed in business that cities have to create this kind of environment to be competitive in today’s landscape?

Marc Sanderson: You know the business models have changed. It used to be large companies would outsource to far-away locations. Nowadays with advances in technology, the ability to work in different locations and from home, employees are demanding more flexible working environments – and certainly more enjoyable environments as well. So in that case Malaga becomes a very attractive alternative for companies. It combines a nice Mediterranean lifestyle and climate, but also technology park and businesses taking place there as well.

Malaga wants to be a smart city, it wants to be an innovative city, it wants to be a sustainable city. So we have projects around electric mobility, water efficiency. We also have an urban laboratory where companies can come in, use the city as their test bed. We’re very fortunate the Spanish digital content Lab is located in Malaga. This project is bringing in lots of new innovative technologies around 3D animation, graphics, as well as video games and design. So it’s exciting times in Malaga.

The New Economy: You personally have been living and working in Malaga for 10 years now; what sort of changes have you seen in the city over that time?

Marc Sanderson: Well, the city has changed dramatically over the last 20 years; but I think over the last 10 years that I’ve been there it’s also changed quite a bit.

When I first arrived there were just over 12 million passengers arriving to the Malaga airport, and last year we eclipsed 19 million passengers, so it’s been quite a growth as far as people arriving to the city.

We’ve opened up the train station as well, so the high speed rail takes us to Madrid in just 2.5 hours, where before it was 4.5 hours. So there’ve been lots of improvements in infrastructure. The metro system has opened and is expanding in the city as well. I’ve personally seen the openings of the Carmen Thyssen Museum, the Centre Pompidou from France, as well as a Russian art museum.

So the cultural offerings in the city have also expanded. As well as lots of pedestrian spaces in the downtown area. It’s really opened up the city, made it more enjoyable. There’s no noise from cars and traffic, and you’re very close to the sea. And so in just a short walk you’re along the port and enjoying the Mediterranean Sea.

The New Economy: And what about in the next 10 years: what are the goals that you have in mind for the city?

Marc Sanderson: Well, we want to continue to evolve as a smart city, as an innovative city. We want to be an option for not only employees and their companies, but also for citizens to live there.

So right now we have different plans – to build an auditorium, for example, in the port area. To continue with the cultural offerings.

We’re working right now again on digital content, so we’re doing lots of filming, editing and design around 3D graphics and animation. So I think the city has evolved, but it still has a long way to go, and it will continue to move in the right direction.

And ultimately I think citizens, individuals, are looking for companies and businesses that agree with their philosophy. And so having an office in Malaga, is a way for a company to demonstrate to their employees that they care about them, they want the work-life balance; and what a great place to live, in Malaga!

The New Economy: Marc, thank you very much.

Marc Sanderson: Thank you.

Artificial diamonds and their numerous use cases in new technologies

Posted on by Jack Pearson

The jewellery and tools markets, dominated by tradespeople in Asia and Europe, are not the only buyers of diamonds – there is growing research into their other properties and uses. Studies in the fields of particle physics, electronics, optics and communications are pushing the known applications of the material.

Diamond is famously a very hard material, but it also has the highest thermal conductivity of any other substance, is not chemically reactive and is radiation-hard. This combination of attributes makes diamonds ideal for environments that would degrade other materials.

Durability and versatility
Thermal conductivity makes diamonds extremely useful for electronics – in fact, no other semiconducting material comes close to its level of thermal conductivity. Due to their highly effective use in this field, diamonds can offer ways to manage the increased heat that comes with more powerful computers, allowing Moore’s Law to be maintained – the notion that the capacity of microchips in computers will double every two years, but the price of computers will halve. Manufacturing some of these electronic components from diamond is an intriguing way to get around limitations in computing power. Proven in applications such as solid-state lasers and LEDs, diamond is currently used in cases when the hardware in question needs to be portable and light – where the volume, weight and cost of standard electronic hardware materials make portability infeasible.

Laboratory-grown diamonds are becoming more common and widely used for research – soon, the material will be a necessity for many scientific industries to experiment and innovate

Diamond is also useful for radiation detection because of its band gap, chemical stability and radiation hardness. As helium-3 becomes more scarce and expensive, diamond becomes a more attractive material for neutron detection in nuclear fission and fusion. Since it is radiation-hard and extremely durable, radiation detectors made with diamond can be placed in previously inaccessible areas for experiments and data collection. Additionally, the material’s resistance to heat, vibration and humidity sets it apart from other available substances.

In addition, nitrogen vacancies (nitrogen atoms occurring in place of carbon atoms) in diamond make the material valuable for researchers studying quantum computing. Nitrogen vacancy centres can be ‘spun’ and turned on and off to imitate electrical components in computing processes. What’s more, the thermal properties of diamonds allow experiments to be conducted at room temperature, thereby significantly lowering the cost of experiments by eliminating the need for cryogenic lab conditions.

New applications
Laboratory-grown diamonds are becoming more common and widely used for research – soon, the material will be a necessity for many scientific industries to experiment and innovate. What’s more, the jewellery market is expected to grow as consumers become more comfortable with lab-grown diamonds as opposed to traditionally mined ones.

Applied Diamond develops new applications for diamonds in two ways: the first is our research for the Department of Energy, where we aim to mitigate the engineering and material challenges of synchrotrons (particle accelerators) in the US. The second way is by building diamond slabs or bespoke assembly components for customers with unique demands.

Our experience with this challenging material enables us to first build a prototype, which then assists our customers with deciding if they want to scale up further production based on the initial result. Through such applications, we are helping to push the boundaries of what’s possible with incredibly versatile diamonds.

Insurance companies are refusing to back coal projects over environmental concerns

Posted on by Jack Pearson

Coal is said to be the most polluting fossil fuel in terms of carbon. It is perhaps unsurprising, then, that the past few years have seen a rise in insurance firms refusing to provide cover to the industry. Since March, US insurers Chubb and AXIS Capital, along with Australian firms QBE Insurance and Suncorp Group, have pledged to stop or restrict insurance coverage for coal companies.

In fact, coal exit policies have recently been announced by 17 of the world’s largest insurers, which collectively control 46 percent of the reinsurance market. This indicates that a gradual move towards renewable energy sources could be on the cards.

An environmental plea
The past five years have been the hottest on record, with increasing temperatures often resulting in more natural disasters. This has meant higher claims bills for insurers, with natural disasters costing insurance companies $90bn in 2018, according to Aon’s Weather, Climate and Catastrophe Insight report.

In 2017, international non-governmental organisations launched the Unfriend Coal network, a global coalition set up to urge insurance companies to distance themselves from the coal industry. Recently, the group published a report outlining insurers’ underwriting, divestment and climate leadership policies.

Overseeing one quarter of invested assets worldwide, insurance companies can have a major say on the direction of investment within the global economy

Unfriend Coal has also used its platform to praise the positive steps taken by insurance giants such as AXIS Capital and AXA to transition away from coal, noting that all companies should be following in the same footsteps. As a spokesperson for Unfriend Coal told The New Economy: “The shift against coal is encouraging, but needs to expand and accelerate quickly, with carbon dioxide emissions [increasing] by a record two percent in 2018.”

Climate Analytics, a non-profit climate science and policy institute, has calculated that all coal-fired power stations must be shut down before 2040 if global temperatures are to be prevented from reaching 1.5 degrees Celsius above pre-industrial levels – a critical tipping point, according to the Paris Agreement. As reported by the Financial Times, credit rating agencies have concluded that it is in insurers’ best interests to reduce their exposure to coal, due to the risks posed by the industry.

Insurers divided
Overseeing around one quarter of invested assets worldwide, insurance companies can have a major say on the direction of investment within the global economy. As such, having companies as prominent as AXIS Capital and AXA speak out in favour of renewable energy could have a major impact on the future of the coal industry.

AXA has promised to discontinue its financial support of coal in Europe by 2030 and the rest of the world by 2040. Céline Soubranne, the company’s chief corporate responsibility officer, told The New Economy that this is because “achieving the objectives of the Paris Agreement requires exits from the most carbon-intensive industries, such as coal”.

Further, AXA has recently shown its support for the move to renewable energy, acknowledging the important role insurers play in the climate crisis by pledging to offer companies ‘transition’ bonds to help finance a shift to cleaner energy. The firm will also double its green investments to €24bn ($26.8bn) by 2023. With prominent insurance companies speaking up, environmental groups such as Greenpeace are hoping this stance will be seen as a baseline for others.

However, there are still insurance companies across the world that show little intention of curbing the use of coal, and new coal mines are being built by companies such as the Adani Group, which is currently struggling to attract investment for its Carmichael coal mine in Queensland, Australia. According to Greenpeace, the mine will emit 4.6 billion tonnes of CO2 over its lifetime. Due to its lack of funding, the Adani Group has had to scale back the project and is currently in need of additional investment from the Adani family to complete the mine by 2021.

It is important to recognise that opening new coal mines doesn’t guarantee more jobs for communities

The fact that the Adani Group is struggling to secure funding indicates that new coal projects could be considerably rarer in the future, with the CRO Forum urging financiers to participate in a massive and globally coordinated response to mitigate current climate risks. For insurance companies, cutting ties with the coal industry is crucial not only for protecting the environment, but also for ensuring long-term investments are safeguarded by looking to cleaner industries.

The end of the tunnel?
A winding down of the coal industry will inevitably have an impact on its current employees. In the US, in particular, the coal mining industry is enormous, employing 53,000 miners in 2018, according to the US Bureau of Labour Statistics.

The industry is gradually declining, though, with natural gas unseating coal as the top source of US electricity last year. With the country moving away from coal, it is crucial that plans are put in place to accommodate those who are set to lose their jobs as a result. This is already happening in West Virginia, with rumours circulating that a new commercial development park will be built at a decommissioned mine. If true, the new build would provide jobs for former miners while being less damaging to the environment.

Despite US President Donald Trump’s best efforts to scrap his predecessor’s Clean Power Plan – not to mention, his own plans to open more coal mines – natural gas and renewable energy are likely to continue to rise in popularity. Natural gas is often cheaper than coal, while renewable energy is preferred from an environmental perspective. It is also important to recognise that opening new coal mines doesn’t guarantee more jobs for communities, with automated technology increasingly taking the place of humans in the past few decades.

A brave new world
Insurance companies must continue to educate customers about the impact climate change has on their premium prices, as consumers’ choices are one way in which reform can be fostered. The commitment of some insurers to the Paris Agreement’s 1.5 degrees Celsius warming limit could encourage others to question how viable insuring coal is. Urgewald, a non-profit environmental organisation, affirmed the need for the coal industry to become redundant, with a spokesperson telling The New Economy: “Coal-fired power generation must decrease by 78 percent by 2030 if we want to keep the 1.5 degrees Celsius limit within reach”.

In the first half of 2019, the EU experienced an unprecedented 19 percent decline in coal-fired power generation and, by the end of 2019, it is expected to be down 23 percent on the previous year. In other parts of the world, the US is on track for one of its largest annual declines in coal-fired power generation, while non-fossil-fuel energy sources almost met all demand growth in China this year. Following the pattern of insurers discontinuing their partnerships with the industry, there has been a clear movement away from coal across the globe. This ultimately demonstrates the power that insurance companies have in shaping the global economy’s development.

AI program that can imitate Shakespeare replicated by two graduates

Posted on by Jack Pearson

Consider these two passages: “For in that sleep of death, what dreams may come when we have shuffled off this mortal coil.” And: “If death, in some obscure and distant hour, strikes me still as I slept, if I yet dream.”

While William Shakespeare wrote the first, an ultra-powerful artificial intelligence (AI) program imitated the Bard’s style in the second – and yet, the two are almost indistinguishable.
The program, called GPT-2, was developed by AI lab OpenAI in February. It’s able to write hyper-realistic text in any format, using nothing but a few words as a prompt. However, having perfected the software, OpenAI elected not to release it over concerns that it could be used to mass produce fake news or propaganda. Instead, the company released a watered-down version of the program along with a scientific paper explaining the significance of what it had created.

OpenAI considered its decision to be watertight: it had protected the public from the program’s potentially nefarious impact. It did not foresee that two computer scientists from Brown University would be able to recreate the program and publish it online for anyone to download – but that’s exactly what Aaron Gokaslan and Vanya Cohen did.

The duo, aged 23 and 24, recreated OpenAI’s language-production software using code available in the public domain. They then trained it using millions of web pages and $50,000 worth of free cloud-computing tools available from Google. Unlike OpenAI, they, along with other members of the AI community, do not believe the program poses a danger to society.

“OpenAI’s claim that it is somehow dangerous to release the code is just a new iteration of the ‘security through obscurity’ argument,” said Mark Taylor, CEO of Sirius and founder of the UK’s Open Source Consortium. “The argument has rightly been ridiculed widely, and has by definition been disproved by the two graduates who replicated it.”

OpenAI’s decision not to release the full program was further criticised for being counterintuitive to the collaborative attitude that typically pervades when it comes to developing new code. By releasing a slimmed-down version of the code and declaring the program dangerous, the company not only invited potential copycat versions, but also ignited a debate about the power that comes with ownership of such a formidable tool.

Joint effort
Ownership of any kind of code can be attributed in two ways: through either a proprietary or an open-source licence. “The key difference is who is allowed to see it and modify it,” explained Taylor. “Proprietary licences treat code as ‘secret sauce’ and only allow the owner to modify and improve it, whereas open-source licences take the scientific approach of not only allowing others to modify, but also encouraging peer review.”

The latter type is preferred by developers, particularly within the AI community, as the nascent nature of much of the technology means it is highly unlikely to be perfect first time round. Making it public allows others to modify it and improves the quality of the code over time. “No matter how good an engineer, people are fallible and if other experts can check their work, errors can be identified and corrected,” Taylor told The New Economy. “One never knows where or from whom the next genius idea can come from… With access to, and the ability to modify or contribute to, source code means a product can be rapidly improved and even transformed into class-leading software.”

Cohen also argued in an interview with Wired that by releasing the full version of the code rather than declaring it dangerous, OpenAI would not have drawn so much attention to its invention. He told Wired that his recreation “allows everyone to have an important conversation about security, and researchers to help secure against future potential abuses”.

Power sharing
Nevertheless, some argue that freely releasing code can create public safety issues, as someone with malicious motives could weaponise it. But Taylor refutes this argument. “All tools can be exploited or used for a detrimental purpose,” he told The New Economy. “Tools themselves are neutral – it is the intent of the user that matters.” In other words, he doesn’t see potential safety concerns as a justifiable reason for not releasing code into the public domain, especially when it has numerous other innovation-related benefits.

What’s more, the alternative to open-source is for companies to have in-house teams of data scientists that operate entirely within the limitations of one firm. This raises concerns about the potentially dangerous implications of concentrating that much power within the hands of a single company. “History tells us that centralising power rarely works out well,” said Taylor. “Proponents of this sort of proprietary ownership are effectively a priesthood, imploring others to trust [that they will use the code responsibly].” When code is in the public domain, it’s clear for all the world to see how it is being utilised, making it much easier to identify cases where it is being put to malicious use.

Since Cohen and Gokaslan released their recreation of GPT-2 into the public domain, OpenAI has announced it is aware of at least five other copies of the program. It’s unclear whether the firm plans to take any action toward removing these versions, or whether it even has the power to. “If you train a program using someone else’s data, the original owner of that data would normally have a claim to at least part ownership of it,” explained John-Paul Rooney, a partner and patent attorney at intellectual property firm Withers & Rogers. “However, if the data was made freely available as part of an open-source agreement, then its original owner would forfeit any right of ownership, unless there were specific conditions of use written into the open-source agreement. In this case, it seems likely that OpenAI was aware that it was forgoing any right of ownership to programs produced as a result of releasing its datasets.”

Given that it willingly released a slimmed-down version of the GPT-2 code, it’s highly unlikely that OpenAI could seek any sort of successful legal recourse for the replications. The firm has also said that it plans to release the full version of the program itself at a later point, undermining its earlier statement regarding safety concerns. This raises the question as to why it held it back in the first place, although this could simply be explained by the level of media coverage that has surrounded the staged release: by following a non-traditional path in that regard, the firm has piqued the interest of the AI community, meaning more developers have viewed and worked on the code than if the company had quietly released the entire program straight off the bat. Perhaps that was OpenAI’s plan all along.

Peru works to make up its infrastructure deficit by looking to private sector

Posted on by Jack Pearson

Over the past decade, Peru has become one of Latin America’s fastest-growing economies. According to Central Reserve Bank Governor Julio Velarde, the country’s average annual growth rate has been five percent over the past two decades – the highest rate in Latin America – which is thanks in large part to continued investment in its growing mining sector. However, the country’s infrastructure development has fallen behind in recent decades, meaning that the overall infrastructure deficit is set to remain at $110bn over the next 20 years.

A developed infrastructure is crucial for countries to meet their national goals and be economically successful, as it connects supply chains and allows goods and services to move across internal borders. Additionally, developed infrastructure can unite metropolitan areas and increase social mobility by granting better opportunities in terms of employment, education and healthcare.
In Peru, the current infrastructure gap presents a formidable barrier to investment opportunities. As a private investment promotion agency, ProInversión champions public-private partnerships (PPPs) in an attempt to boost Peru’s infrastructure and global competitiveness. ProInversión has strong links with the Ministry of Economy and Finance, as well as numerous government bodies for various industry sectors, making us an excellent first point of call for budding investors. Further, we have a streamlined approach, enabling us to offer investment opportunities that facilitate sustainability and social reform.

A developed infrastructure is crucial for countries to meet their national goals and be economically successful, as it connects supply chains and allows goods and services to move across internal borders

ProInversión currently identifies sectors such as transportation, energy, health, education, and water and sanitation as lucrative avenues for foreign investment. In addition, Peru’s non-discriminatory and modern legal framework creates a stable investment climate and allows foreign investors to enjoy the same rights as Peruvian investors. Demonstrating this is the projected growth of our project portfolio for 2019 to 2022, which will consist of 55 projects at a total investment value of more than $9.2bn (excluding VAT). At present, there are nine projects in the structuring phase and eight that are approaching transaction, i.e. close to bidding. As new investment ventures emerge and develop, our portfolio value could easily climb to $15bn.

Shaping the market
Peru offers private investors an eclectic range of sectors in which to do business. The use of PPPs to fund infrastructure projects has received broad support from organisations around the world. ProInversión uses PPPs for a number of reasons – first and foremost, it allows the public sector to benefit from the advantages usually associated with privately funded projects. For example, PPPs grant public sector projects access to the private sector’s research and development facilities, which can improve operational efficiency and offset some of the associated risk. Meanwhile, private sector companies benefit from the support of large international firms and government resources, thus further developing capabilities and increasing potential.

We are regarded as one of the most experienced agencies in Peru, and have been recognised as a good example for many neighbouring countries in Latin America. Our wide-ranging portfolio, combined with Peru’s macroeconomic stability, has boosted the appetite of foreign investors from across the globe.

In the driver’s seat
The transport sector is a top priority for the country at present, boasting 35 percent of ProInversión’s portfolio. Peru’s commitment to meeting its transport and logistics needs is apparent in its fiscal planning. As part of a public spending programme, the Ministry of Economy and Finance has prioritised a fund of roughly $30bn for infrastructure developments, of which over 80 percent are in the transport sector. A significant portion of the funding comes from PPP projects, with more expected to come from the private sector. For 2020, we are tapping into the many investment opportunities available along Peru’s 78,000km of roads – a fundamental aspect of the country’s transportation system, which crosses most of the mountain and coastal regions.

For example, the Peripheral Ring Road project, which is currently in the structuring phase, will build a 34.8km-long beltway around Lima and Callao, with an investment value of $2.05bn. This project will improve connections between the districts of the north and east areas and the rest of the metropolitan Lima area.

Another important project is the Longitudinal Sierra Highway, which has an investment value of roughly $900m. This project’s scope handles the improvement and rehabilitation works of an important section of the highway, which will connect 12 areas across the Andes mountain range. Meanwhile, our major rail projects include the construction of lines three and four of the metro network between Lima and Callao. Although these lines are still under formulation with the Ministry of Transport, they will directly impact the profitability and sustainability of the surrounding areas.

Social good
Water and sanitation projects form another important strand of our infrastructure strategy, comprising around 25 percent of our portfolio. Projects include increasing clean water capacity and improving waste treatment, as well as building potable water treatments and desalination plants, each of which require sizeable investment. Lima’s potable water supply project, for example, requires design work, construction and maintenance, bringing the total investment value up to $720m. Indeed, over the next 30 years the capital will see a great deal more work in sanitation: dams will be enlarged, while new canals, water transfer tunnels and reservoirs for treated water will be built.

Another important sector with a vital social impact is health. Although Peru has traditionally suffered from restricted access to healthcare services, significant steps have been made in achieving universal coverage in recent years. In particular, the Universal Health Insurance Law, which was signed in 2009, was a major step towards this goal.

At present, our portfolio has five commissioned hospitals set for 2020, covering both their operation and maintenance – a fundamental concession that is becoming the norm in projects across all industries. The total investment for next year through ProInversión into Peru’s health sector totals $591m.

After two decades of stable economic growth, Peru increasingly finds itself in a position to invest in resources for education. Following the Peruvian Government’s 2015 initiative to improve the population’s English skills, the number of applicants to English-language degrees is expected to rise. The number of schools and educational institutions teaching in English is already increasing in response to demand from local corporate sectors. ProInversión has five important projects designed to improve the quality of education by giving a boost to each respective school’s infrastructure, guaranteeing they remain in operation throughout the concession period. This investment amounts to around $301m.

An attractive framework
The opportunities across these sectors are coupled with Peru’s favourable legal framework. Foreign investors receive non-discriminatory treatment and thereby unrestricted access to most economic sectors, as well as enjoying free transfer of capital and shares. The framework also grants the freedom to both purchase stocks from locals and access internal and external loans. Finally, owing to the political stability Peru has enjoyed in recent years, buyers are guaranteed to retain any private property they purchase.

At ProInversión, we’re proud of our three-pillars strategy, which we believe sets us apart from other agencies in the region that use the PPP model

In the event of litigation, investors have access to international dispute settlement mechanisms. Peru notably participates in the Investment Committee of the Organisation for Economic Cooperation and Development (OECD), which promotes the implementation of environmental and social guidelines for multinational enterprises. Peru is a strong candidate to become a member of the OECD in the near future.

Ultimately, a stable legal framework helps to facilitate profitable projects. What’s more, ProInversión recently simplified the legal process to hire the best technical, legal and financial firms to serve as advisors and to strengthen the formulation and structuring phases of projects we collaborate on.

The Peruvian Government also recognises how tax regimes can further incentivise private investment. An example is the VAT refund scheme, which grants any company the right to recover the VAT of an investment valued above $5m within a preoperative stage of more than 24 months. Significantly, ventures within the agricultural sector do not need a minimum investment capital requirement to qualify.

Support from within
As the organisation that promotes the country’s private investment policy alongside the Ministry of Economy and Finance, we are best placed to support investors in breaking into the Peruvian market. We provide crucial information and guidance to investors, with the aim of creating a conducive and fruitful environment. For example, sector officers are available across the board to provide information on all our projects and mechanisms. Through this approach, ProInversión can effectively channel information requests from investors to experts in the relevant sector to aid investors’ understanding of market conditions.

ProInversión employs a triple-pronged approach to ensure the very best projects are brought to market. We are often the main contact for investors due to our ability to identify and liaise with the various ministries, regulatory authorities and entities governing a particular sector’s environment. Importantly, we also work with the best advisory firms (technical, legal and financial) to guarantee the project’s execution and maintain a great relationship with the investor from beginning to end. We also believe that opening a dialogue with the communities affected by the projects is vital to any initiative’s ultimate success.

Finally, it’s also important to develop a promotional plan based on a commercial strategy that leads us to the market: this should include identification, segmentation and customer satisfaction. ProInversión ensures the projects it supports are sustainable by observing the life cycle of numerous PPP projects and their five phases (planning and scheduling, formulation, structuring, transaction and contract execution). This guarantees quality at every stage of development.

Internal strategy
At ProInversión, we’re proud of our three-pillars strategy, which we believe sets us apart from other agencies in the region that use the PPP model. The first pillar is the hub of excellence: we continually strive to achieve excellence when advising the government on the formulation and structuring of PPP projects. This is made possible by recruiting top-tier consulting firms and facilitating standardised contracts that ensure predictability within any given market.

Our second major focus is to promote private investments with productive, social and environmental management at their core. We recognise the value of social and environmental consciousness in our work in order to guarantee sustainable and successful projects that are equally beneficial to society and the population of Peru. This ethos is exemplified by a project that we are particularly proud of – the wastewater treatment system within Lake Titicaca. ProInversión granted this project, which is located in the Puno region – one of the poorest in Peru – under a co-financed and private initiative. It designed a solution for the treatment and final disposal of municipal wastewater in Lake Titicaca, consequently decreasing pollution in this sensitive area of Puno. In the awarding process, ProInversión conducted an international public tender, which had five potential bidders.

The completion of the Lake Titicaca project will help to reduce the water sanitation gap in the country by improving a public service for the benefit of all citizens in Puno. This is especially important as, for ProInversión, a project’s significance also lies in its social impact. The project will provide benefits for more than 1.2 million Peruvians across 10 towns in the Puno region by improving public health, increasing commercial activity and creating an overall positive impact on the region’s progress.

The third pillar is our commercial strategy. Here we have been applying a systematic and informed methodology to identify, consolidate and attract potential investors. Our commercial intelligence is highly specialised to retain the right investors for each project. We will continue to participate in local and international campaigns, as well as utilise digital tools to keep attracting first-rate investors who are highly committed to our growing economy.

Peru’s VAT refund scheme grants any company the right to recover the VAT of an investment valued above $5m within a preoperative stage of more than 24 months

Looking forward
With growth and internal development as an unwavering priority, plans for the future at ProInversión are varied and numerous. Having recently presented the National Infrastructure Plan, which was issued by the Ministry of Economy and Finance, we have an infrastructure development agenda in place to help support our long-term vision. What’s more, prioritisation of our projects further helps to anchor and manage the expectations of our stakeholders.

Our key objective is to reduce the $110bn infrastructure gap over the next 20 years. Investing capital to close the gap is a huge investment opportunity that is expected to return quick dividends. Furthermore, we are currently collaborating with a top consulting firm to finalise a financial guideline to standardise the development of financial models in the structuring stage. In a similar sense, in order to improve efficiency, reliability and transparency, we have retained the services of a leading Anglo-American law firm that is in the process of finalising a contract for the standardisation of PPP projects. To complement these initiatives, we have begun internal discussions to establish a project management department in each government ministry that is looking to further optimise the project’s formulation.

Stepping into the digital transformation sphere, we have been put forward by the Inter-American Development Bank as one of the countries to incorporate the online data management platform Source. This will keep track of our portfolio and monitor project milestones, ensuring accountability at every stage. Another benefit of this digital platform is being able to follow the development of projects with corresponding and integrated data. Source is a tool that will allow us to plan our project’s next steps accurately and efficiently.

These new developments will provide us with fresh impetus and insight into the future of our project portfolio, which is expected to reach the $15bn mark as more mandates continue to be allocated in the transportation and sanitation sectors.

China gives a dam about improving its green energy infrastructure

Posted on by Jack Pearson

An engineering project of bewildering size, some of the statistics pertaining to the Three Gorges Dam are hard to believe. The dam, which bestrides the Yangtze River in Central China, is 7,661ft long and more than 600ft high. It required 463,000 tonnes of steel to build and is so large that the mass of water that built up behind it caused the rotation of the Earth to slow down slightly.

For now, the dam is the largest in the world, but that may not be the case for much longer. Proposals are being explored for the construction of the Grand Inga Dam, which would use the power of the Congo River to generate 40,000MW of electricity – more than twice the amount currently produced by the Three Gorges Dam.

If plans to build another hydroelectric megastructure do get the go-ahead, they will no doubt benefit from the successes and pitfalls that the Three Gorges Dam has already experienced. It is a project that has attracted controversy for economic, social and environmental reasons.

The project’s green credentials ring rather hollow given the ecological damage it has already caused

Need a lift?
Construction of the Three Gorges Dam was completed in stages, taking 17 years in total. Today, the dam has a maximum electrical capacity of 18,300MW, produced by 32 generators that use high-pressure water to spin huge turbines at a rate of 75 revolutions per minute. This drives an electromagnetic generator that converts the water’s kinetic energy into electricity.

The Three Gorges project also aims to open up shipping routes to China’s interior. In late 2016, the dam’s hydraulic ship lift was officially launched, boasting the capacity to raise vessels 371ft in order to pass over the dam. The system uses reinforced concrete, cables and counterweights to allow for the passage of ships weighing as much as 3,000 tonnes. While it took ships three to four hours to cross the dam using the previous system of locks, the new method takes just 40 minutes.

The dam’s main goal, however, remains power generation. The project originally aimed to produce around 10 percent of China’s total energy needs, but the country’s rapid economic development has brought this target crashing down.

Outta the dam way
Sustainability was, of course, a major reason for building the dam: not only would it lessen the need for fossil fuels, but it would also reduce the potential for flooding further downstream. However, the project’s green credentials ring rather hollow given the ecological damage it has already caused.

During construction, 1.3 million Chinese citizens were forcibly relocated to make space for the dam’s reservoir. In total, two cities, 11 counties, 116 towns and countless sites of cultural importance were flooded. The risk of geological hazards occurring, principally landslides, has also risen significantly as a result of changes to local water levels.

More trouble arose earlier this year amid claims that the dam was breaking apart. Reports of an impending collapse spread across social media after one Twitter user posted a satellite image purporting to show that the dam had become deformed. Officials were quick to debunk the rumours, stating that any changes to the dam’s structural integrity remained within normal parameters. Hopefully they are right – if the dam were to collapse, the environmental, economic and human damage would be monumental.

Barring catastrophe, then, the Three Gorges Dam will remain the largest hydroelectric plant in the world for the foreseeable future. Even if it is eventually usurped by the Grand Inga Dam or another such structure, it will continue to stand as a testament to humankind’s engineering brilliance; a project of scarcely believable scale.

Could automating email admin save companies time and money?

Posted on by Jack Pearson

Email, the most popular communication tool of the modern workplace, could soon be obsolete. Invented in the 1960s to facilitate digital communication between workers, it has been overtaken by speedier and more efficient applications. From messaging apps with document-sharing features to inboxes with inbuilt profile pop-ups, today’s communication tools not only aim to reduce the time we spend engrossed in our inboxes, they also promise increased privacy and faster communication.

For those unwilling to relinquish the classical email format just yet, there’s Superhuman, which claims to be “the fastest email experience ever made”

One of the major disruptors of email, Slack, has seen a huge uptick in clients in recent years as workers seek more efficient ways to collaborate with their international colleagues. Founded in 2013 by Stewart Butterfield, the cloud-based chat platform now has more than 10 million daily users and was valued at $23bn when it debuted on the New York Stock Exchange in June this year. The application allows communication to be organised into channels: office water cooler chat is separated from strategic debates, making it easier for employees to choose which messages take priority, unlike an email inbox, where users have to sort through themselves.

Slack’s capabilities extend well beyond sending and receiving messages – it also integrates with a number of third-party services including Dropbox, GitHub and Trello. This means employees can share files, work together on code and keep track of daily tasks, all within one platform.

Top of the line
For those unwilling to relinquish the classical email format just yet, there’s Superhuman, which claims to be “the fastest email experience ever made”. Every action – whether that’s starting up the service, sending an email or searching for a contact – takes less than one tenth of a second. It boasts a host of inbuilt tools designed to save time, from keyboard functions (one allows users to send a timely RSVP to decline invitations if their diary is booked up) to pop-ups reminding you of your last message exchange with a contact.

Since its launch earlier this year, Superhuman has been lauded by the who’s who of the technology sector. David Ulevitch, a partner at venture capital firm Andreessen Horowitz, called it the “future of work”, while both Jager McConnell, CEO of Crunchbase, and the founders of payments firm Stripe are also rumoured to be fans.

Part of Superhuman’s appeal lies in its exclusivity – the system comes with a $30-a-month price tag and is currently invitation-only, with a waiting list of more than 180,000 people, according to CEO Rahul Vohra. For Silicon Valley buffs, the subscription fee is a small price to pay to reclaim some of the time they spend emailing during a typical workday. The cachet that comes with being one of the first to use the service is simply a bonus.

Productivity boost
If privacy is the priority, services such as ProtonMail, Tutanota and Runbox all provide end-to-end encrypted email services, meaning no one – not even developers at the company – can read a message’s contents. Runbox’s Norway-based data centres even run solely on renewable hydropower, minimising the environmental impact typically associated with facilities of this type.

Given the amount of time and energy the average employee dedicates to sending and receiving email, it’s reasonable to expect our inboxes to work a little harder for us. After all, the more efficient and streamlined our communication apparatus, the more time we are able to dedicate to productive activities that drive businesses forward and leave us feeling more accomplished at the end of the day. It’s increasingly clear that email is no longer able to fulfil that role, making it ripe for disruption by tools that can.

Smart cities: future-proofing for tomorrow

Posted on by Jack Pearson

Most smart city projects start small and focus on a vertical market – street lighting, for example, is a typical entry point. While this is one of the most commonly used smart city technologies, Trilliant has assisted in the implementation of additional tools, such as environmental monitoring, traffic management and enhanced security.

Trilliant is making smart cities a reality by creating solutions that solve challenges associated with the compatibility of disparate technologies, enabling them to share information with each other and with non-scalable solutions. Because we approach smart cities differently, we’re able to deliver solutions that are open, flexible and future-proof.

To do this, Trilliant enables and provides consultative services to establish a network before installing any devices. With the right digital infrastructure in place, our cities have the architectural support to create smart cities for the future. Long term, this approach is more sustainable than simply piecemealing solutions together one by one.

Delivering value
While it’s true that smart cities can deliver huge benefits, they are difficult to establish. Beyond capital challenges, getting projects past the pilot stage can be a real hurdle. Many cities already recognise the benefits of smart technology, but city leaders are challenged to not prioritise its development over other important projects, like affordable housing or school funding. The question of city funding and investment doesn’t have an easy answer, but it is something many cities across the world are facing.

Cities that do implement smart technologies are often under pressure to deliver long-term value creation

Cities that do implement smart technologies are often under pressure to deliver long-term value creation. Solutions from different vertical markets use proprietary systems, but without a network solution like the one Trilliant provides, cities can face a major connectivity challenge. By not considering how they can harness data from multiple systems, cities can miss out on the long-term value that smart-city technology can provide.

Similarly, data streams from closed sources that don’t converge in a single place can also cause issues. At Trilliant, we’ve been connecting critical infrastructure for almost 20 years. We understand data can be challenging, but there are ways to make managing it easier. Our clients have found that data management from various sensors has grown into a key part of their business operations, even uncovering untapped revenue streams. Because our platform can bring together disparate devices, data can be managed in one place, no matter what kind of technology it’s streaming from.

Smart money
A good communications platform is incredibly important, as it opens doors for cities to find the best possible solutions for their unique situations. Trilliant’s platform uses a standards-based application programming interface to surface data in a single pane, giving places the ability to tailor their smart city to the needs of their citizens.

We believe in working with customers to create practical solutions for their energy and smart-city needs. When considering short and long-term returns on investment, cities should first invest in their connectivity infrastructure. This is where Trilliant helps them stand apart.

We support the technology – lighting, sensors and CCTV cameras, for example – but also have a critical understanding of the infrastructure required to make them operate at peak performance. Having a structure in place to leverage this technology allows for investments in the future that are managed by the city. Through ownership of things like data and the network, cities can develop both direct and indirect revenue-generating opportunities. At the moment, however, a lot of cities don’t appear to be interested in acquiring this extra revenue. In many markets, such as the US, there has been very little capital prioritisation for smart-city projects. The US market is missing out on a huge opportunity to prioritise the type of infrastructure that can facilitate smart cities.

Until there’s prioritisation from the public and private sectors, consumers will continue to buy individual systems without a long-term plan on how to manage them. Although some smart-city opportunities are being embraced, many more remain underutilised.

Could the world’s asset holders be the answer to the climate crisis?

Posted on by Jack Pearson

When President Trump was elected to office in 2016, the US tore up its commitment to the Paris Agreement, striking a blow to global efforts in the fight against climate change.

However, there were those that felt Paris was an inadequate proposal from the very beginning. The signatory countries are not legally bound by the targeted emission reductions and, worse, the targets are to be self-policed and met through each country’s own means.

When viewing this limitation in light of the falsified emissions reports by Volkswagen in 2015, there is the possibility that some countries could take a similar course of action in the absence of international accountability or unified approach. In addition, subsequent studies have highlighted the shortcomings of the agreement in light of the knock-on-effects of increasing global temperatures.

Off one’s own back
If the Paris Agreement is a half-measure, what can ordinary people do while they wait and hope for their governments to make impactful reforms?

One of the biggest hurdles facing meaningful reform is the climate funding gap – the estimated total sum needed to effectively tackle climate change – which is currently estimated to stand at $16.8trn over the next 15 years.

One foundation, called Parents Pledge, has suggested a way to bridge the gap: by using a small fraction of the world’s total assets under management, which The Wall Street Journal estimates to be worth around $140trn. The organisation’s website claims if every asset holder paid an annual 0.25 percent from their savings, the fund would produce $350bn annually.

Parents Pledge takes these donations and gives them to groups around the world that are trying to reverse climate change, such as those planting new forests, developing clean energy solutions or lobbying governments to pass new environmental laws and uphold existing ones.

One of the biggest hurdles facing meaningful reform is the climate funding gap – the estimated total sum needed to effectively tackle climate change

Among notable figures to have made the pledge are Rowan Williams, the former Archbishop of Canterbury. “I made the Parents Pledge because it is essential not just to protest but to contribute positively in protecting our environment for our children and all the world’s children,” he said, according to the Parents Pledge website.

By 2030, two thirds of the world’s wealth is predicted to have been amassed by the world’s wealthiest one percent, with inequality continuing to rise to unfathomable levels. This raises questions about a potential ‘funding ceiling’ if members of the world’s richest one percent do not contribute some of their wealth to combatting the climate crisis. Ultra-high-net-worth individuals may be difficult to convince, owing to the link between the success of capitalism and climate change: wealth is generated through the acquisition and application of natural resources. Our economies have been founded around this collective agreement, which is why some have been able to make their fortunes from damaging industries, such as herding cattle, chopping down trees and drilling for oil and gas locked safely away underground.

Another company, Poseidon, makes use of ‘carbon tokens’ through its Reduce programme. Through this, firms can offset their carbon footprint by paying a levy for the environmental impact of running their business – for example, a company could offset the carbon footprint it creates when manufacturing and delivering its products by funding reforestation projects to ‘lock up carbon’.

In Poseidon’s model, responsibility is shifted away from individuals and towards corporations – an approach that makes sense, given the huge impact that some industries have on the environment.

“Our groundbreaking Reduce platform allows everyone to participate in addressing social as well as environmental challenges,” Laszlo Giricz, Founder and CEO of Poseidon, told The New Economy.“We use… tokens – for example, our forest carbon credit… tokens on the Stellar blockchain – in order to create small fractions of carbon credits that can be allocated to emissions fast and in an affordable manner.”

Vivobarefoot is one such company that has committed to offsetting its carbon footprint. “Every single shoe sold at its stores in Zurich and Lucerne, as well as every shoe sold through its online store, has been turned into climate action,” said Giricz. Both of these initiatives, it could be argued, are a form of voluntary ‘climate change tax’ in the wake of ineffective government policies.

Bring it back home
If radical action on the climate crisis is not taken soon, the consequences could be disastrous. “Nobody knows how bad it will really be, as this has never happened before,” Giricz told The New Economy. “We have no reference. There will be food shortages, as well as extreme weather events. The future will be challenging for all life on Earth.”

In 2012, Australia became the first country to introduce a carbon tax, which was levied against industries as a means to encourage the development of sustainable energy sources. However, subsequent political and public pressure over fears of rising energy prices also made Australia the first country to repeal a carbon tax in 2014. When more political consensus is found for how best to tackle climate change, it is possible that the world’s governments will be able to take inspiration from initiatives such as these to ensure the planet is preserved for future generations.

Málaga is set for continued growth and development

Posted on by Jack Pearson

Globalisation has had a transformative impact on today’s business models. As a company’s customer base is no longer limited to a city, region or country, companies are now able to target far more people. Further, international business is no longer limited to just a few large multinational corporations; small and medium-sized enterprises can operate across borders with greater ease than ever before. This increased competition tends to lower operating costs, as companies can search around the world for the best prices for raw materials. Customers, meanwhile, are becoming more price-sensitive, reducing businesses’ margins on goods and services.

Operating a business has become more complex in certain respects, too. Companies now have to manage employees, customers and suppliers across several time zones, speaking different languages and using multiple currencies. Management teams must also consider cultural differences among employees, as well as the implications of operating under different laws and taxation structures. Perhaps the most pressing challenge for companies in today’s globalised world, though, is ensuring that they meet the changing needs of their workforce.

Málaga is a beautiful coastal city that offers the amenities of a major European capital without the traffic congestion, pollution or stress

Attracting top talent
Improvements in technology and transport – such as high-speed trains, low-cost airlines and video conferencing – have allowed employees to work from home or alternative locations. At the same time, social media has broadened people’s horizons with regard to what a company can offer them. It’s no longer just about the paycheque – increasingly, people seek out employers that can offer them a good quality of life, too.

Given the growing expectations of younger sections of the workforce, it’s becoming more difficult to retain talented people. For example, companies that choose isolated locations to reduce costs often have trouble keeping hold of employees. In order to retain talented individuals, companies must choose office locations that bring value to the workplace and foster positive employee morale.

Recently, companies such as EPAM Systems, ITRS Group and Ciklum have leveraged the enviable quality of life in Málaga as a way of attracting highly qualified people and creating the best teams possible. Málaga is a beautiful coastal city that offers the amenities of a major European capital without the traffic congestion, pollution or stress. It is renowned for its wonderful climate, beautiful beaches, mountainous landscapes, delicious cuisine and hospitable residents. With a population of around 570,000, Málaga is a cosmopolitan Mediterranean city where residents of more than 150 nationalities live together.

Málaga is also the birthplace of Pablo Picasso and Antonio Banderas, so it’s easy to see why its citizens have a strong appreciation of the arts. There are more than 30 museums – including the Museo Picasso Málaga, the Centre Pompidou Málaga and the Contemporary Art Centre of Málaga – and dozens of cultural events throughout the year, such as Holy Week and the Málaga Film Festival. Further, the city’s historical centre has many pedestrian spaces where one can enjoy diverse cultural offerings, including the Cathedral of Málaga, Alcazaba and the Roman Theatre.

A thriving economy
It is the responsibility of local governments to generate a prosperous environment and create employment. As such, authorities must have a strategic plan in place that guides the development of the city. Key aspects of a solid city plan include public transportation, utilities, security, education, productive business zones and green spaces. These plans should be developed with local stakeholders and the business community. For instance, in Málaga, we collaborate very closely with bodies such as the Chamber of Commerce, Industry and Navigation, the General Confederation of Labour, the provincial and regional governments, and many other local business associations.

At the same time, city authorities should provide services that make it as easy as possible for foreign companies to relocate and invest in their city. To this end, municipal governments should consider organising or sponsoring cultural and business events as a way of attracting international experts, students, tourists, professors and business executives. Finally, it is important that the local government has a plan to promote the city through both online and traditional media – after all, a strong image increases awareness of what a city has to offer and engenders pride in local citizens.

These strategies have helped Málaga blossom into an entrepreneurial smart city. In fact, the city’s economy grew 3.4 percent in 2018, only slightly below the 3.9 percent growth of the previous year. What’s more, it is surrounded by an innovative ecosystem, known as Málaga Valley, and is home to the Andalusia Technological Park, where 646 companies employ some 19,873 workers. Software development, wireless solutions, telecommunications, big data analytics, radio frequency identification, aeronautics, biotechnology and renewable energy are just some of the sectors represented at the park.

Companies that choose to be located in technology hubs can hugely benefit from economies of scale. It is also easier to recruit talented people, as there is a higher concentration of similar companies with like-minded employees. Given the variety of employment options, individuals are more inclined to choose innovative regions. At the same time, being geographically close to universities and leading companies exposes businesses to new skills, unique processes, advanced research and cutting-edge technology. If implemented correctly, these can improve efficiency and lower operating costs, resulting in more profitable companies. Finally, investors and financial institutions tend to pay close attention to these tech hubs, making it highly advantageous for companies to be located in such regions.

Spain’s shining light
Málaga has transformed into an innovative smart city and has plans that will help it keep evolving. Currently, the city’s overall strategy is aligned with the United Nations’ Sustainable Development Goals, and it has specific aims to boost mobility and technological innovation between now and 2022.

In addition to the 198 smart city initiatives defined in the plan, we created an experimental urban laboratory within a municipal building. This holds specialised equipment and a co-working space where companies can operate side-by-side with the city’s best engineers to test, certify and demonstrate new services and technology within the smart city concept. We have also employed the use of a smart cities accelerator, which is sponsored by Spain’s largest telecommunications provider, Telefónica. In fact, Spain’s first National Digital Content Hub – equipped with the latest technology in videography, 3D animation and virtual reality – opened in Málaga in 2017.

At present, plans are underway to build offices and residential buildings along the coast, at the port and at the Andalusia Technological Park. There are also proposals to build four more hotels, including a convention centre that will support international conferences from various industries, including Gamepolis, Transfiere, Greencities, the S-Moving Forum and the Smart Agrifood Summit. What’s more, a second metro line that will connect the city centre with the high-speed railway station is under construction. We also plan to build an auditorium at the port and a planetarium.

Málaga will continue to provide companies and their employees with all the assistance they need during the relocation process. Málaga is a city well prepared to face the challenges of the future – as a business location, it can add tremendous value to a company by lowering overall operating costs while rewarding employees with a very high quality of life. Although the sun is always shining in this part of the world, the coming years look especially bright for Málaga.

Russian Government goes cloak and dagger about nature of recent explosion

Posted on by Jack Pearson

The medical staff at Arkhangelsk Regional Clinical Hospital in Russia were not told much about the three patients who arrived at approximately 4:30pm on August 8. They were rushed to the emergency room – naked save for some translucent plastic bags that had been wrapped around them – before being moved to separate operating theatres.

Explanations from Moscow were characteristically vague. Initially, the Russian Ministry of Defence declared that a fire caused by an explosion of a liquid-fuelled rocket engine had killed two individuals and injured four others. It also stated that background radiation remained at normal levels. However, local authorities in the city of Severodvinsk, some 25 miles away from where the explosion took place, provided contrasting information: they saw a spike in radiation levels 200 times that usually recorded.

It wasn’t until two days later that Rosatom, the state atomic energy corporation, issued a statement revealing that the explosion occurred during work on “an isotope power source”. Although the agency hadn’t used the word directly, the truth was out – a nuclear incident had occurred. Immediately, thoughts turned to the Chernobyl disaster of 1986 and the fallout that followed.

Although the US may have shelved plans for a nuclear-powered missile of its own, that doesn’t mean the country has laid down its arms completely

Fortunately, the explosion that took place by Russia’s White Sea coast was far less damaging than the one that occurred some 33 years ago. Nevertheless, the incident served as a reminder of the huge number of nuclear weapons that remain in the hands of governments all over the world today, and the destruction they can cause.

The mystery missile
Amid a slew of claims and counterclaims, facts regarding the explosion on August 8 remain difficult to pin down. So far, expert consensus points towards an experimental nuclear-powered cruise missile – specifically, the 9M730 Burevestnik. The weapon, which is claimed to have virtually unlimited range, is also sometimes referred to by its NATO code name, Skyfall.

“Currently, it is believed that the explosion occurred during a recovery operation of a Burevestnik missile, rather than during a failed flight test,” Anne Pellegrino, Project Manager and Research Associate at the James Martin Centre for Nonproliferation Studies at the Middlebury Institute of International Studies at Monterey, told The New Economy in September. “It is unclear exactly what caused the explosion, though reports indicate that it occurred as the missile was exiting the water. One hypothesis is that the reactor developed for the Burevestnik is cooled with liquid sodium, a common coolant for fast reactors. Liquid sodium is highly reactive with air and would cause an explosion similar to the one described during the August 8 incident.”

The existence of the Burevestnik is not disputed – Russian President Vladimir Putin revealed the missile himself in March 2018, along with a host of other hypersonic weapons. Since then, however, the development of the weapon has largely been kept under wraps. The information that has been gathered thus far indicates that the missile is powered by a nuclear reactor, allowing it to travel for thousands of kilometres at low altitude and very high speeds. This could allow it to avoid defence systems like those the US currently has in place.

It’s a formidable weapon, but also an unwieldy one. According to US intelligence, the missile was tested four times between November 2017 and February 2018, crashing every time. The danger of these tests, as the incident of August 8 proved, is that when a nuclear fuel source is involved, the risks are significantly higher than with conventional propellants.

In the aftermath of the explosion, some of the medical professionals at the Arkhangelsk hospital were flown to Moscow to undergo further tests. One of them was found to have traces of caesium-137, a radioactive isotope, in their muscle tissue. Although it is highly likely that the contamination resulted from treating survivors of the missile’s explosion, Russian officials had a different theory: they claimed the caesium-137 must have originated from “Fukushima crabs” that the doctor had eaten while on holiday in Thailand. Just like with Chernobyl, the cover-up was in full force.

The Skyfall-out
The exact cause of the explosion on August 8 may never be known. It is possible that Russia believes revealing more information about the event would risk other states developing similar technology. What is becoming clear, however, is the consequences of such developments: aside from caesium-137, other radioactive fission products, including strontium-91, barium-139, barium-140 and lanthanum-140, have all been detected near where the explosion took place.

“Theoretically, the reactor on the [Burevestnik] missile would be unshielded, meaning that anyone in its vicinity would be exposed to very high levels of radiation,” Pellegrino explained. “This is a system that I hope the Russians are never able to make fly. More generally, systems like the Burevestnik are incredibly destabilising and are not a good sign for what may be coming during a renewed arms race between the United States and Russia.”

Certainly, Russia is not the only nation to have considered using nuclear power to give its military arsenal a boost. The US tried to develop a similar weapon to the Burevestnik missile in the early 1960s, under the codename Project Pluto. It was, according to Pellegrino, “a crazy idea”, and was shut down in 1964.

One of the reasons Pluto was cancelled was that the nuclear reactor powering the weapon had to be unshielded to keep its weight down. This meant radioactive particles were continuously expelled throughout its flight. The missile would not simply destroy its target upon impact – it would irradiate everything and everyone it passed over. Even at a time when Cold War tensions were running extremely high, this technology caused too much collateral damage to conscionably be further developed.

Science and technology have advanced considerably in the decades since those early Project Pluto tests, but whether they have progressed enough to guarantee that only identified targets are affected by a nuclear-powered missile remains unknown. But, depending on who was in charge of such a weapon, this may not be a problem: given that apocalyptic outcomes are an inherent part of nuclear weaponry, perhaps the idea of collateral damage does not hold much water.

Clouds on the horizon
Although the US may have shelved plans for a nuclear-powered missile of its own, that doesn’t mean the country has laid down its arms completely. Already in possession of the world’s strongest military, the US is working on increasingly sophisticated new weaponry: lasers, hypersonic projectiles and high-velocity drones represent just a few of the projects under development. And, of course, the US continues to maintain and modernise its nuclear arsenal.

“I am not optimistic about the likelihood of seeing a world without nuclear weapons any time soon,” Pellegrino said. “I am equally worried about the backwards trend in arms control between the United States and Russia. The collapse of the Intermediate-Range Nuclear Forces Treaty and the lack of discussion between the two parties regarding the extension of the New START arms reduction treaty beyond 2021 means that we are rapidly approaching a time when there will be no legally binding limits on the world’s largest nuclear arsenals. Backsliding on arms control and this renewed arms race paint a grim future for nuclear disarmament.”

The Burevestnik missile explosion showed the unique risks that come with the development of nuclear weapons. It also demonstrated how much secrecy continues to shroud the technology. Initially, not even the death toll could be agreed upon: the Russian Ministry of Defence reported that two people had been killed; Rosatom said five. One thing is certain, however: for as long as the world is developing nuclear weaponry, lives will continue to be at risk.

More plastic could help create a circular economy

Posted on by Jack Pearson

Plastic is a valuable material with good versatility. Its value, however, is lost if it’s not treated correctly throughout its life cycle. While consumer awareness grows, governments continue to set regulations to reduce plastic consumption, and companies around the globe are responding with commitments to use recycled materials in their products and packaging. However, this increased demand has created a plastic paradox: there isn’t enough plastic being collected and recycled to meet fresh demand and preserve the planet’s non-renewable resources.

A resource revolution is needed to solve this problem. The planet’s resources are limited, and a new strategy is required to create a circular economy.

Rethinking the system
The amount of plastic waste being produced is growing rapidly, and society’s failure to return plastic into a closed loop is having a negative impact on the environment and on our health. The current linear model means the end of life for plastics is mismanaged, and a valuable resource is lost in the process.

Consumer expectations for recycled plastic have increased due to the wave of information relating to the harm that misused plastic is causing. In response, governments and companies are making pledges to use recycled plastic. EU member states, for example, have signed several legislative proposals on waste, including an aim to hit a recycling rate of 70 percent for packaging waste by 2030.

Plastic has become public enemy number one, but it doesn’t need to be: if the management of plastic were to be improved, consumers would value its versatility more

The European Commission recently announced that plastic drinking bottles must include a minimum of 35 percent recycled content by 2025, while member states must collect and recycle 90 percent of beverage containers. Fast-moving consumer goods companies like PepsiCo and Unilever have pledged to increase recycled content in their packaging to 25 percent by 2025, while German company Werner and Mertz has shown even greater ambition, aiming to use 100 percent recycled materials for 65 percent of its packaged products by 2025.

These pledges are ambitious and to be admired, but without a system in place to collect and sort the plastic, the paradox remains. According to the Ellen MacArthur Foundation, of the 78 million tonnes of plastic produced annually, 40 percent goes to landfill, 32 percent becomes litter and harms nature and 14 percent is incinerated. While 14 percent is collected for recycling, only two percent of this remains in the circular economy.

The paradox is amplified by the fact that eight percent of the plastic we do collect is downgraded, meaning it can only be used once more and then does not remain in the circular economy. Essentially, the entire value is lost.

If companies want to switch to recycled materials, a considerable amount of recycled plastic is needed, which is currently not available on the market. Plastic manufacturers need a constant supply of recycled material; to create a circular economy, the system needs to change.

Revitalising recycling
If society is going to meet its recycling ambitions, we need to catalyse the circular economy. At the heart of this is the need to view plastic differently – not as waste, but as a valuable resource that is worth collecting. We need to make sure plastic stays in a closed loop through better management of its life cycle.

Everybody knows the adage about square pegs not fitting in round holes. The same can be said for a linear design for a proposed circular economy: no matter how you try and force it, it won’t work. Plastic packaging must, of course, maintain its current function to protect and communicate information about the product inside. If packaging isn’t fit for purpose, it can’t protect the product it is designed for, and the environmental and financial costs only increase.

Manufacturers must design packaging for the circular economy in a way that allows it to be easily recycled by not mixing it with different types of plastic, making the recycling process needlessly more complicated. The Ellen MacArthur Foundation’s 2017 New Plastics Economy report suggested that 30 percent of plastic packaging needed fundamental redesign and materials science innovation. A further 20 percent could incorporate better design for reuse.

Using recycled materials saves resources and lowers carbon emissions. It takes 60 percent less energy to manufacture recycled polyethylene terephthalate plastic bottles compared with bottles from new plastic, but despite this fact, not enough recycled materials are finding their way back into a closed loop. Manufacturers and brand owners with commitments to use recycled content must optimise and identify ways to increase the amounts of recycled material they use if they are to meet their targets.

Creating value
High-profile campaigns in the media have brought plastic waste to the forefront of our collective environmental conscience. Plastic has become public enemy number one, but it needn’t be: if the management of plastic was improved, consumers would value its versatility more. We must remove single-use plastics that belong to the linear economy.

There needs to be a collection system – possibly enforced via legislation – that encourages and incentivises consumers to put the plastic we use into the closed loop. Such a system would help to educate consumers, change habits and transform industry while ultimately providing plastic with greater value.

Deposit return schemes (DRS) are proven systems that encourage consumers to recycle their plastic drinks containers and increase collection rates, while also maintaining the purity of the material. Eight EU nations now have a DRS, with Germany leading the way with a 98 percent return rate. In Lithuania, TOMRA’s innovative reverse vending machines enable the automated collection of beverage containers and saw collection rates soar from 34 percent in 2016 to 92 percent by 2018.

In the current linear system, plastic with value is being lost. Mixed-waste collections, which include plastics that could be recycled in the same way as those collected separately, often end up incinerated or sent to landfill. This needs to be remedied, and the technology to do so already exists.

Optical sorting machinery, currently used in countries like the Netherlands and Norway, enables plastic to be recovered from mixed-waste streams and kept in the closed loop. The recycling industry must adopt better technology to prove to brands that materials recovered from mixed-waste streams can meet their requirements. Once collection rates increase, it must be recycled at the highest quality to make sure it can be used in new products.

Quantity and quality are needed to solve the plastic paradox. As the quantity of recycled material in the loop increases, the mindset of the industry must turn to quality. Using the best available technology for the processes of sorting, washing, extrusion and decontamination of the materials will be essential to achieve the desired quality levels for reuse. Increased use of recycled plastics reduces the demand for new material in many applications, thereby closing the loop further.

A circular economy for all
The plastic paradox can be solved, which is why TOMRA has set ambitious targets to accelerate the implementation of the circular economy and drive the industry forward. We aim to increase the global collection of recyclable plastic from 14 percent to 40 percent, as well as increase the recycling of plastics in closed loops from two percent to 30 percent by 2030.

Redesign and recycling will go some way to achieving this, but the main challenge is to work together to improve plastic collection and change the system. We cannot do this on our own; a collaborative value chain across industries is what’s needed.

We are dedicated to increasing the recycling rates of plastic and many other materials, and have been developing solutions since 1972 to do this. Our newly formed Circular Economy team is devoted to enabling the circular economy by working with manufacturers and retailers.

The desire from governments, companies and consumers to find the solution to the plastic paradox and plastic waste is present and growing. TOMRA’s resource revolution calls on everyone to recognise plastic as the valuable resource that it is, and use it to catalyse the circular economy. In doing so, we hope to contribute to improving the health of both the
planet and society.