How Will ‘America First’ Policies Impact Water Security on the Colorado River?

Water security on the Colorado River faces an ambiguous future, with the Minute 319 agreement set to expire.

By:  Meghan Curran, Lynx Global Intelligence

 

Tensions between the United States and its southern neighbor have risen steadily over the last few months. In January, a diplomatic standoff ensued as President Donald Trump announced his decision to move ahead with the construction of a border wall preceding Mexican President Pena Nieto’s White House visit, which was thereafter canceled.  The implications of President Donald Trump’s proposal to fund the building of a wall along the U.S-Mexico border by applying a 20% tax on Mexican imports disproportionately effects certain U.S. states. Colorado is one of these states.

Mexico is Colorado’s second largest market for export goods, besides Canada. In 2015, Colorado exported $1.08 billion in goods to Mexico, an 83% rise from 2010 levels, according to Commerce Department data (Denver Business Journal, 2017). Additionally, Colorado imported $1.72 billion in goods from Mexico in 2015 (a 164 % increase from 2010 levels). While there are numerous negative implications regarding trade between Colorado and Mexico under ‘America First’ policies, there are also human security concerns relevant to the increasing tension between the United States and Mexico.

One potential human security concern is water security, and the future of agreements between the U.S. and Mexico regarding the Colorado River. In 2012 the U.S. signed an agreement with Mexico establishing rules for managing water from the river, which runs from the Colorado Rockies to the Gulf of California. The river passes through seven states, and provided water for 33 million in the United States and Mexico. Under the 2012 arrangement, called Minute 319, the United States and Mexico agreed to share surpluses and shortages from the river.

In times of drought in the United States, Mexico agreed to accept less water in exchange for being able to store water in the United States during times of surplus, reducing the potential for harmful flooding. Prior to the 2012 agreement, the United States had sent the same amount of water to Mexico every year, despite the river’s waning levels and increasing concerns over drought in the U.S. southwest. Mexico, which has limited capacity for water storage, in return could store surplus water in Lake Mead, of great benefit to the U.S. since the lake is crucial to supplying water to the Las Vegas area. The United States also agreed as part of the arrangement, to support improvements to Mexico’s water infrastructure. Additionally, both the United States and Mexico agreed to provision a specific amount of water annually to the Colorado River delta area, which has become desert-like in recent years, endangering native plant, fish, and animal species. (New York Times, 2012)

Water security on the Colorado River faces an ambiguous future today, with the Minute 319 agreement set to expire at the end of 2017. With tenuous relations between the United States and Mexico persisting, and a water shortage on the river projected to be declared as early as 2018, the future of Colorado River, a lifeline for tens of millions of people on both sides of the border, is uncertain. It is still unclear how President Trump’s ‘America First’ policies might impact resolutions regarding future management of the river, but the delivery of water to 3 million Mexican households could potentially be at stake. Additionally, in 2016 Lake Mead recorded its lowest water levels since the construction of the Hoover Dam in the 1930s. Mexico’s willingness to continue to store water in Lake Mead in accordance with Minute 319 has the potential to significantly impact over 1 million people in the Las Vegas Valley, as well as the area’s massive tourism industry. (San Diego Union Tribune, 2016)

With water levels expected to continue to drop in the coming years, a renewed emphasis on binational cooperation between the United States and Mexico on the issue of water security is essential. Colorado, as both the source of this crucial waterway, and a key trading partner for Mexico, will no doubt have an essential role to play in helping to broker this future cooperation.

 

 

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Mexico is Colorado’s second-largest market for export goods, after Canada. Colorado exported $1.08 billion in goods to Mexico in 2015, up 83 percent from 2010 levels, according to Commerce Department data.

Manufactured food products represented about 25 percent of Colorado’s exports to Mexico in 2015, valued at $269.6 million. That was followed by chemicals (18 percent, $192.9 million), non-electrical machinery (10 percent, $112.1 million), and fabricated metal products (9 percent, $100.2 million).

And Colorado imported $1.72 billion in goods from Mexico in 2015, up 164 percent from 2010. Roughly half of those Mexico-to-Colorado imports were classified as computer and electronics products, valued at $856.3 million.

No. 2 was plastics and rubber products (9 percent, $150.8 million), followed by non-electrical machinery (8 percent, $135.6 million) and electrical equipment, appliances and components (5.5 percent, $95.3 million).

Russia’s Northern Sea Route: The Superior Course for Maritime Trade in the Arctic

Lynx Global (AI)ssisted-Data-Science™ Dashboard facilitates public and private risk strategy

ABy:  Anthony J. Riddle,  Lynx Global Intelligence

 

The Chinese government intends to redraw the lines of power in maritime trade. In a Chinese-language only report distributed by the Chinese Communist Party (CCP), they signaled their intent to encourage Chinese shipping companies to utilize trade routes in the arctic circle. This will catalyze a paradigm shift in global maritime trade because China is the first major power committed to utilizing the Arctic Circle; setting a new precedent in naval history. Specifically, the CCP prioritizes the increasingly navigable Northwest Passage which crosses through Canadian and American territorial claims. Shortening transit times for maritime shipments is the primary motivation for using emerging Arctic sea routes to link China to European markets. The Chinese Maritime Silk Road ends at the Port of Piraeus, Greece, and leads through the Indian Ocean and Suez Canal. The current route cuts 10 days off the journey to Central or Eastern Europe when compared to routes which lead around the Horn of Africa. [1] Because of this accelerated transit speed “most of China’s $1 billion in daily exports to Europe [now] traverse the Gulf of Aden and the Suez Canal.” [2] The CCP now looks to the Arctic to further expedite shipments to European consumers at a time when China’s “online revenue [is] projected to double to $1.1 trillion by 2020.” [3]

China currently controls fourteen of the top twenty high volume sea ports and has launched the One Belt, One Road Initiative with the intent of establishing new trade routes to bolster its economy and expand its international influence. The maritime component of this initiative initially used a shipping route that ran through the Indian Ocean, the Straits of Malacca, and the Suez Canal. [4] This route, however, forces shipping vessels to transit through three high risk piracy zones which increases shipping costs resulting from the combination of higher insurance premiums and augmented security measures. Costs to shipping companies are increased by $726.1 million a year when transiting just the East African piracy zone because of the additional security merchant vessels require to do so safely. [5] By shifting priority to the increasingly navigable arctic, Chinese shipping companies can effectively bypass these costly and dangerous areas when shipping goods to European markets. China’s Maritime Safety Administration spokesman Liu Pengfei was quoted as saying “Once this [arctic] route is commonly used, it will directly change global maritime transport and have a profound influence on international trade, the world economy, capital flow and resource exploitation.” [6]

The Russian controlled Northern Sea Route will become navigable far sooner than the Northwest Passage according to climate change models; additionally it will have the largest ice free area comparatively to other routes. [7] The Northern Sea Route is also approximately 40% shorter than using the Suez Canal trade route [8] and shortens voyages from Shanghai to Hamburg by 2,800 nautical miles. [9] Such a significant input cost reduction for delivering goods to European markets will be irresistible for shipping companies participating in Chinese trade. An example of how arctic transits create significant savings is “the Nordic Orion, a Danish bulk carrier, [which] saved $200,000 and four days’ transit time by shipping 15,000 metric tons of coal from Vancouver to Finland via the Northwest Passage in 2013.” The Arctic Ocean therefore represents an approximate savings of $50,000 a day in transit costs while simultaneously removing the necessity for Maritime Security teams that are required to safely transit piracy zones. This will drive Arctic and non-Arctic states to compete for access to these lucrative routes that are partly claimed by the United States, Russia, Canada, Denmark and Norway. [10]

122333The Russian government has heavily invested in making the Northern Sea Route navigable for trade to compete with the Northwest Passage. China stated in their 2015 military white paper that they place great importance on “managing the seas and oceans and protecting maritime rights and interests” [11] and, as a result, they made history in 2014 by having the first unescorted commercial vessel transit the Northwest passage which delivered a shipment of nickel ore. [12] This same year China and Russia signed a 30 year and $400 billion dollar deal for GAZPROM to supply China with Russian oil in an attempt to further link Russian and Chinese economies. This deal ultimately was crippled by plunging price of oil from the $100/barrel at the time of the deal and the global supply of Liquid Natural Gas (LNG) which has become more attractive because of the Paris Agreement on climate change. [13] Russia intends to manage their Northern Passage to circumvent western sanctions by taking advantage of Chinese economic growth to repair their own economy and improve Sino-Russo relations. The Chinese decision on which arctic route to rely on will rebalance global relations between the three superpowers.

To successfully attract Chinese shipments, Russia maintains forty icebreakers and has another eleven icebreakers on order to improve the viability of this emerging shipping lane. Additional signs of Russian commitment to controlling arctic trade are found in their four active Arctic combat battalions, recently established dedicated Arctic command, and creation of sixteen ports in the arctic circle. [14] Russia’s State Commission on Development of the Arctic Regions also founded a single company to boost the development of these new shipping routes and will oversee all logistical operations in the area. [15] The Northern Passage has already experienced a 30% increase in commercial traffic from 2008 to 2010. [16] Companies interested in participating in a region that is quickly becoming viable for trade, a first in recorded history, require both familiarity with the agreements between states in the region and to establish a dialogue with new partners already established there.

We are experiencing a paradigm shift in global trade. One that can be capitalized on if effectively managed through careful analysis of real-time competitive intelligence. Companies wishing to take advantage of this development require a dedicated team of subject matter experts who are familiar with the political forces affecting global supply chains. They will also require a network of professional partners who are firmly established in these expanding markets. Without a carefully constructed strategy to mitigate potential risks created by the geopolitical pressures between states, the subsequent volatility could cause irreparable damage to a company’s supply chain.

By introducing an Artificial Intelligence (AI) driven analytical dashboard to assist a diverse team of experts, Lynx Global Intelligence is uniquely positioned to provide the services necessary to successfully emerge from this transition ahead of the competition.

 

 

[1] http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf

[2] http://www.huffingtonpost.com/joseph-braude/why-china-and-saudi-arabi_b_12194702.html

[3] http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf

[4] http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf xi, 21

[5] http://oceansbeyondpiracy.org/reports/sop/summary

[6] http://af.reuters.com/article/commoditiesNews/idAFL3N17N1JK

[7] Scott Stephenson, University of Connecticut, https://www.newsdeeply.com/arctic/community/2016/02/10/scott-stephenson-the-future-of-arctic-shipping

[8] http://www.gallois.be/ggmagazine_2013/gg_02_03_2013_90.pdf

[9] http://www.scmp.com/news/china/society/article/1937327/china-wants-its-shipping-use-faster-arctic-route-europe-opened

[10] http://www.maritime-executive.com/article/rival-claims-to-the-changing-arctic

[11] http://thediplomat.com/2016/04/going-blue-the-transformation-of-chinas-navy/

[12] http://www.latimes.com/world/asia/la-fg-china-ships-alaska-20150902-story.html

[13] http://www.reuters.com/article/us-russia-china-gas-exclusive-idUSKCN0UT1LG

[14] SEN PERDUE (R-GA): Senate Armed Services Committee Holds Hearing on U.S. Southern Command and U.S. Northern Command Witnesses: Gen Lori Robinson (CDR USNORTHCOM) PG 25

[15] http://e360.yale.edu/features/cargo_shipping_in_the_arctic_declining_sea_ice

[16] https://www.afsc.noaa.gov/publications/misc_pdf/iamreport.pdf PG 16-17

The Paris Climate Agreement and Future Business Implications

Pursuing the goals of the Paris Climate Agreement will ensure businesses long-term success while allowing them to participate in the reshaping of the economy while saving the environment.

By:  Jenya Sakaeva, Lynx Global Intelligence

 

In light of recent political events, the environmental future of the United States, and consequently the world, may look quite bleak. Fortunately, as the saying goes, every cloud has a silver lining. For the planet’s climate, this silver lining could be businesses big and small leveraging their power for global good. While the Trump Administration has yet to formally withdraw from the 2015 Paris Climate Agreement, the executive orders to date signify the United States’ noncompliance with the goals set forth to prevent global temperatures from rising another 3.6 degrees Fahrenheit. This is a point when scientists have agreed the Earth will be irrevocably locked into “a future of severe droughts, floods, rising sea levels, and food shortages” [1].

Pursuing the goals laid out in the COP21 Paris Agreement will set businesses on a course of action that will lead to sustained success. In Lynx’s previous post, https://tinyurl.com/mnqbq9q, we outlined the ways in which corporate social responsibility and ethical business practices bring long-term prosperity to those who participate in them. Addressing climate change is a part of corporate social responsibility.

Why should businesses uphold the Paris Climate Agreement?

 A changing climate poses many risks to business. First, there is the risk of depleting natural resources that are either raw materials in a company’s product, or necessary to the process of manufacturing or shipping those products. There are tangible, physical risks associated with damage to facilities or manufacturing centers from a more extreme and volatile climate and weather events. Of course, there are financial risks that lack of natural resources or extreme weather will result in. Market risks in the form of shifting consumer preferences, behaviors, and demand are equally prevalent. Additionally, companies face reputational and regulatory risks for poor performance in climate related endeavors.

The Paris Climate Agreement is historic in terms of the goals set and number of countries that have committed to take them seriously. This reflects the global understanding of the multitude of issues stemming from climate related problems. The time to act is now.

In the words of some of our economy’s biggest players, “Implementing the Paris Agreement will enable and encourage businesses and investors to turn the billions of dollars in existing low-carbon investments into the trillions of dollars the world needs to bring clean energy and prosperity to all” [3].

The Paris Climate Agreement creates a global landscape in which business opportunities are plentiful. As the world economy and political powers move towards achieving reduced emissions and capping temperature rise, businesses will see a need to change their practices to support their country’s commitment to the agreement. Evaluating the strategic decisions now can put you ahead of the curve, but failing to adjust just means a more turbulent transition further down the road. Aside from political agendas impacting businesses and the Paris Climate Agreement, there are also economic, social and technological reasons to begin honoring the agreement sooner rather than later.

According to a business briefing on the topic by Cambridge University, “Companies such as GE, Unilever, Nike, IKEA, Toyota and Natura are already reaping the benefits of offering ‘green’ products and services, a market which has grown to over $100 billion” and “Unilever’s purpose-driven brands are growing at twice the rate of the rest of their portfolio and if GE’s Ecomagination was a standalone business, it would be a Fortune 100 company.” [4] Additionally, there are many economic opportunities to invest in renewable energies and new technologies, while oil prices may vary globally and contribute to higher energy prices.

Socially, consumers are increasingly more aware of the sustainability efforts and initiatives of the companies they purchase from and their behaviors are shifting to favor those businesses with more commitment to the environment. Patagonia is a classic example of a company that embodies the ideals of the Paris Agreement within the core functionalities of its strategy, and is rewarded for that by consumers. On the other hand, businesses that ignore these social patterns often witness consumer backlash and reputational damage.

Technology is already a rapidly evolving field in which some businesses have seen immense success. In order to reach the goals set forth in the Paris Agreement, many more technological advances will have to bridge the gaps between where we are now and where we aim to be. This presents businesses with huge potential. New business models, like the circular economy, have begun to emerge as an innovative response to dealing with climate problems. “Smart” technologies are becoming more customary in our daily landscape, from wearable technology to transportation solutions, and even smart cities. Also, the role of big data will only grow as the world tries to understand how to enact technological changes and incorporate them into society.

While the political approach to the Paris Climate Agreement remains uncertain in the United States, the rest of the world remains committed to the deal. As we know, neither climate nor the economy exists independently in one country or another. We live in a global world and a global economy, and businesses that realize the opportunities within the goals of the agreement will be successful in the long-term across many different aspects.

 

 

[1] https://www.nytimes.com/2017/03/28/climate/trump-executive-order-climate-change.html?_r=0

[2] http://www.cisl.cam.ac.uk/publications/publication-pdfs/A-New-Climate-for-Business.pdf

[3] http://www.lowcarbonusa.org/

[4] http://www.cisl.cam.ac.uk/publications/publication-pdfs/A-New-Climate-for-Business.pdf

 

What will a Trump Administration Mean for Conflict Around the World?

Co-Founder at Lynx Global Intelligence

 

Little appears certain within the incoming administration, policy-wise. “Predictioneering” will prove especially difficult considering the president-elect’s lack of government service record, exacerbated by waffling on issues like climate change. For the purpose of analysis, let’s assume “conflict” a unitary measure*, which will either increase or decrease during the next four years.

Conflict around the world will decrease:

 Trump has expressed a willingness to act in a way that appears pragmatic to some. His selection of Rex Tillerson as Secretary of State is nothing less than an overture to long-standing geopolitical frenemy, Russia. In keeping with Trump’s assertions about Putin’s greatness, the choice firms up what looks to be a warming in relations between the two nations. While this may produce a peace dividend of sorts for both countries (especially Russia), it is precisely this selectivity in friend-making that could raise the specter of conflict elsewhere. Nevertheless, a focus on pragmatic, pro-business cabinet members is a plus. Pragmatism leads to compromise, avoiding conflict and war.

Conflict around the world will increase:

 While a direct warming of relations with a former foe may prove beneficial in the short-term for Russia, the new relationship will come at a cost, certainly to those who inhabit Russia’s immediate periphery. As the residents of Crimea can surely relate, Russia’s willingness to use force covertly has not been meaningfully checked by the West. Residents in Syria will mirror that same sentiment, but regarding the overt use of violence to achieve political ends. The less willing a US president is to provide leadership that stands up to war crimes and the instruments of armed conflict, it becomes more likely nations will feel at liberty to commit such crimes. Globally, a selective preference for Russia as a partner will alienate the Chinese. China seeks pragmatic, long-term partnerships, not ignorance (see: Trump Taiwan call) or prolonged conflict. Preference towards Russian interests could come at the expense of relations with America’s second largest trading partner, China (following peaceful Canada at #1). Ignorance and a lack of respect for protocol, especially in diplomacy, raise both tensions and the risks a tactical mistake will be made, sparking war. That reality unfortunately promotes the idea that global conflict may increase in years to come.

 

 

*In reality, measures of human conflict as understood by scholars is a surprisingly complex measure. Everything from food insecurity to human rights abuses can spark conflict, which also varies in scale, latency and intensity.

Intelligence For Good

(Picture) Khadija, a drone pilot in Tanzania trained by WeRobotics. Lynx connected WeRobotics, who focus on humanitarian, development and environmental projects, with our partners in Tanzania to assess damage after the 2016 earthquake.

By:  Trevor Jones, Co-Founder at Lynx Global Intelligence

 

The word “intelligence” has many meanings. It is an old word, with etymological roots in the 12th Century.

Intelligence, basically translated, meant “comprehension” in Old French. It wasn’t until the 16th century that intelligence gathering entered the lexicon. As various nation-states built up their military information gathering services, “Intelligence” began to mean the collection and distillation of enemy positions and plans. Intelligence gathering has expanded to include IMINT (imagery intelligence from satellites) and recent practices, like SOCMINT (Social Media Intelligence).

And yet “capacity for comprehending general truths” – from the Old French, remains at the core of the meaning. To simply gather or possess knowledge is not enough. Active analysis is required; the data must be cultivated and presented to an intelligence consumer. But what if

those consumers went beyond national entities, to include NGO’s and private sector entities focused on changing the world around them?

Because of that exact notion, Lynx Global Intelligence was formed to focus on “intelligence for good” as a differentiator, a way to stand out from similar firms and do the right thing by human beings and the environment. “Intelligence” has also garnered several negative popular meanings. Intelligence services in many countries have gone beyond knowing, to doing, and sometimes impinge on domestic human freedoms in its most extreme form.

While some assume that intelligence gathering itself has negative implications, Lynx wants to subvert that notion.

It’s not wrong to assume that intelligence gathering can be intrusive or harmful. But it is equally wrong to assume that intelligence collection and dissemination cannot be used toward the end of human security and environmental sustainability.

The intelligence collection cycle itself is the “ comprehension” of ground truth information. By keeping the collection lens wide, convergences are discovered. States may seek information to promote sovereignty, Lynx collects intelligence to promote human and environmental security.

Lynx also comprehends the needs of the private sector. Convergences between the triple helix of protecting People, Planet and Profit are uncovered to promote corporate or organizational growth in a way that keeps the big picture in mind. By doing so, Lynx speaks the languages of the public, private and non-profit sectors to create positive convergences around the globe.

 

*The photo above is of Khadija, a drone pilot in Tanzania trained by WeRobotics. Lynx connected WeRobotics, who focus on humanitarian, development and environmental projects, with our partners in Tanzania to assess damage after the 2016 earthquake.

Could We “Ethically Source” Humanitarian Intervention?

(picture) USAID/OFDA Mt. Sinjar, Iraq, 2013

 By:  Trevor Jones, Co-Founder at Lynx Global Intelligence

 

*I owe an intellectual debt to Tyler Rauert for referring me to this concept.

Populist governments around the world are looking inward to appease voters, not outward to assist the most vulnerable populations on the planet. It takes the right mix of domestic political will and international collaboration to save the lives of those persecuted by violence. When a leader or nation is unwilling to protect that basic measurement of human security, life itself, their legitimacy and sovereignty are compromised. At that point, an outside actor has the moral responsibility to intervene to save these lives.

The world stated “never again” after the Holocaust and more recent genocides and massacres in Rwanda and Srebrenica. Shockingly, that tone has been substantively absent in the political community during conflicts in Iraq and Syria where violent persecution based on identity have been the norm. Atrocities are also happening in South Sudan and Rhakine State in Myanmar. Our political will to intervene has waned during the post- George Bush/Iraq years and newly elected populist governments in the US and elsewhere will do little to advocate for saving innocent lives through the use of force. Oddly, we are able to view the destructive effects of war and ethnic-cleansing far easier than ever before, with widespread smartphone video use.

Governments and the UN have failed in protecting the innocent from violence, and NGO’s are limited by their funding and mandate, which must uphold humanitarian neutrality, preventing the necessary force protection from saving lives. That leaves the private sector to take up the slack.

But how? Mercenary forces have been frowned upon over history, and for good reason. But the dire situations in the world today beg a question: could privately sourced civilian protection, the kind needed to save lives in South Sudan, Rhakine, Aleppo and elsewhere, be achieved?

It is a challenging and interesting thought. A couple guidelines that could help shape the debate:

  1.  It is better to train humanitarians to use force than to train those who are well-versed in force protection to protect civilians. Traditional military training may be inappropriate for interacting with civilian populations in dire need (see: Afghanistan). That said, the conversation is moot unless those with the ability to suppress violence are involved, to deter or prevent mass killings.
  2.  The academic theory and practice of humanitarian neutrality will need to be modified. To protect civilians from destruction, the instruments of that destruction must be removed from the operating environment. Destroying the helicopters Bashar-al Assad used to drop barrel-bombs on civilians, early on in the conflict, is a good example.
  3.  Consensus and buy-in would need to be achieved on the international level. Although governments may be unwilling to intervene and the UN unable due to a lack of standing forces, these entities would still need to endorse and support private civilian protection. The services the UN provides are irreplaceable.
  4.  Force protection would have to be ethically sourced. Private military contractors may not be completely appropriate in this setting (see #1). Complete transparency would be needed, forces cannot be present for any other reason than destroying direct threats to civilian populations.

The reality of private humanitarian force protection is difficult to imagine, but the reality of current world events dictate that a new solution must emerge, unless mass atrocities are to continue in their current form.