Category

Mobility

Moral responsibility and autonomous machines

What happened?

Last year, 37,133 people were killed in motor vehicle crashes in the U.S. Human errors were by far the biggest cause of these fatal accidents: 94%. As such, autonomous cars have great potential to reduce the highway death toll, and one could even claim that it is a moral imperative for governments and corporations to produce them, as well as for citizens to shift to autonomous driving as soon as possible, as we have written before. However, recent fatal autonomous car crashes pose the dilemma who is responsible when autonomous cars crash: the manufacturer, the (fleet) owner or the occupant(s)? Legal expert David Vladeck has offered a fourth, and rather controversial, option: the autonomous car itself. More precisely, autonomous machines in general should obtain legal status as they are not used as tools but are only deployed by humans, and function without their intervention, hence could be legally and morally responsible for the mistakes they cause.

What does this mean?

We generally consider agent A to be morally responsible for outcome O, if A acted in freedom (control condition), A’s actions are causally related to O happening (causal condition), A should have foreseen that his actions would lead to O (epistemic condition) and O is a morally impermissible outcome (moral condition). One could argue that autonomous cars act in freedom and are “smart” enough to know that car crashes are morally impermissible, hence that they can be held morally responsible for the crashes they cause (assuming a crash is a morally impermissible thing). This means that more nonhuman actors could become legally and morally responsible for their actions, such as autonomous weapons, self-filling fridges (e.g. failing to notice your food has rotten), or robo-cooks (e.g. cutting you instead of the meat).

What’s next?

Most money and blame in our economies are earned by nonhuman entities that have legal rights (corporations). Philosopher Bruno Latour has argued that we should give rights to nonhuman objects (e.g. animals or joint-ventures) and let them speak for themselves in the “Parliament of Things”. Hence, morally and legally responsible autonomous machines should also have extended rights to pay their dues, for example, to take out insurance to pay liabilities to victims when found guilty, or to be able to earn their own money (e.g. by having their own virtual wallets so that they can independently hire themselves out to human and nonhuman users). However, punishment is not only a monetary matter; punishment also entails “recognizing” the crime in order to restore the sense of injustice that is experienced by the victim. In this sense, it remains to be seen whether autonomous machines can be meaningfully punished (e.g. can they apologize?) in the eyes of victims, as recognition should come from other free and autonomous persons. Hence, attributing moral responsibility to nonhuman actors implies that we should expand our universe of moral and conscious beings, challenging our view on the nature of intelligence and autonomy.

Digital maps offer Augmented Virtuality

What happened?

Soon, users of Google Maps will be able to directly contact (local) businesses through a chat function in the app (e.g. to check the availability of, or pre-order, a specific product). This provides these businesses with an easy means of digitizing their customer contact, and developing into some kind of hybrid brick-and-mortar/online store. More importantly, perhaps, this move is another sign that digital maps are developing into major interfaces between us and the world around us. As such, maps will increasingly replace traditional internet browsers and dedicated apps for social media and other uses.

What does this mean?

Last year, we already noted how ever-richer, more dynamic and interactive maps are integral to the ways in which the internet is increasingly relevant to our everyday lives. While the digital and the physical realm were strictly separated in the early days of the internet (as engrained in the concept and name of Second Life), today we expect digital services to be of immediate practical value, whenever and wherever we are. Digital maps meet this need through a kind of “Augmented Virtuality” in which the virtual (i.e. a digital map) is augmented with (real-time) information from the physical realm (e.g. live traffic information and shop-owners answering questions).

What’s next?

The increasing relevance of digital maps also sheds new light on the concept of Augmented Reality. The common conception of AR entails digital information that is added to “reality” by means of smartphone screens or smart glasses. This, however, pre-supposes that a user is already within eyeshot of a specific place or object and is thus of (fundamentally) limited value. By contrast, the Augmented Virtuality that is offered by digital maps allows for users to access information from any distance and decide whether or not it makes sense to go there. It is thus no wonder that AR is still limited to niche applications such as in gaming (e.g. Pokémon Go) and the military, while the AV of digital maps has already found its way onto Main Street.

Will supersonic flight finally take off?

What happened?

Last week, the U.S. House of Representatives passed a bill which tells the Federal Aviation Administration to reconsider its stance on supersonic (civilian) aircraft in U.S. airspace.  Currently, these are banned because of the noise they produce when breaking through the sound barrier, but they could reduce flight times by more than 50%. In the past, only the French-British Concorde offered supersonic commercial flights, but operations were cancelled because of high (fuel) costs and the fact that aircraft could only go supersonic once they flew over the Atlantic. Today, a new generation of supersonic aircraft is being developed by incumbents (e.g. Boeing and Lockheed Martin) and startups (e.g. Spike and Boom) and, because they produce far less noise, the ban on supersonic may be lifted.

What does this mean?

From a historical perspective, it makes sense for mankind to go supersonic. Throughout history, people have travelled for an average of 1.1 hours/day (i.e. the so-called travel-time budget), but ever faster modes of transport have allowed us to travel farther and, for instance, move to suburbs or travel across the globe without exceeding this time budget. After the mass commercialization of jet aircraft (which are even slower today than in the past), supersonic flight would be the next logical step. Thanks to developments in lightweight materials (e.g. carbon composites) and modelling tools to improve hull designs (to minimize or divert the supersonic boom), operating these aircraft could become a commercial option in the near to longer term future (e.g. Boom aims for 2023, Boeing speaks of 20-30 years).

What’s next?

Supersonic flight has always been controversial and it’s likely to remain so in the future due to environmental concerns. At the same time, it’s quite plausible that many (rich) travelers would be willing to pay a premium for drastically reduced flight times (e.g. from New York to London in 2-3 hours). And for airports (and the cities they are connected to), it would be tempting to welcome supersonic jets as they could bring in high-value passengers and related economic development. Even more so, supersonic aircraft (similar to Formula One racing) may trigger (sustainable) technological innovation which could then trickle down to regular jet aircraft as well (e.g. hydrogen-powered aircraft).

July 2018: Belt and Road troubles

It’s been almost five years since Xi Jinping announced China’s Belt and Road Initiative. With the immensely ambitious infrastructure project, China seeks to expand its sphere of influence, to boost trade and stimulate economic growth across Asia and beyond. However, problems are emerging. BRI is dealing with economic challenges and resistance, slowing its momentum. After almost five years, reality has proved unruly and key projects are experiencing setbacks. 

In 1999, the Chinese government introduced the Go Out policy, encouraging Chinese companies to invest in countries abroad, which was further promoted under the BRI policy. Essentially, firms were incentivized to be active in countries where they did not necessarily have experience. The same counts for the investments made under the Belt and Road Initiative. Not only have BRI FDIs dropped in volume and number, aggregate returns on Chinese foreign investments are dwindling. The total return on Chinese foreign investments in 2016 was 0.4%, which is substantially lower than the usual 4% earned by foreign reserves globally. The International Monetary Fund is now actively supporting Chinese President Xi Jinping in preventing the infrastructural plan from investing in white-elephant projects. These projects were financed with cheap and easy credit from China’s policy banks. Beijing now recognizes how this lending poses a risk to the broader Chinese economy because it fuels risky projects. Furthermore, the country is currently putting efforts into reducing debt levels.

Projects that might be easy to execute in China face delays and cost overruns, growing debt and deficits, political opposition because of Chinese labor immigration, and the risk of being cancelled by new leadership in the country. Two BRI projects are particularly fraught with these challenges and are testing the BRI ambitions.

First, the China-Pakistan Economic Corridor, which is pivotal for China, is facing resistance. Pakistan has received $62 billion of investment pledges to build it. But the country is facing a high current account deficit and the imports of Chinese machinery for the project have pushed this. The country is dependent on cheap credit from China. Another risk is that if Pakistan’s new government were to seek a bailout from the IMF, this would include restrictions on borrowing and spending and thus limit the BRI program with China.

In Malaysia, the second-biggest recipient of Belt and Road loans after Pakistan, the new Prime Minister Mahathir Mohamad has promised to review the “unequal treaties” signed with the Chinese state-owned companies on BRI projects by his predecessor Najib Razak. Malaysia has halted Chinese projects worth $22 billion. Mohamad blames Najib’s relationship with China for corruption and bad decisions, including a controversial rail link along the country’s east coast.

As China is struggling economically and “flagship projects” are facing threats, the BRI ambitions seem further away from being realized than ever.

RISKS MARKED ON THE RISK RADAR AS NUMBER 1:

Chinese/other EM’s economic slowdown

The Risk Radar is a monthly research report in which we monitor and qualify the world’s biggest risks to watch. Our updates are based on the estimated likelihood and impact of these risks. This report provides an additional ‘risk flection’ from a political, social, economic and technological perspective.
Click here to see the context of this Risk Radar.

A forced ride up the s-curve

What happened?

Most car manufacturers have showcased some kind of electric vehicle (EV) in recent years, but only few of those were produced in meaningful numbers. This is about to change, as a host of mass-market EVs have been announced for 2019 (e.g Mercedes, Audi , Volvo and Hyundai) and 2020 (e.g. Opel, Peugeot, Volkswagen, Ford, BMW and Toyota). This is no coincidence: European and Chinese emissions regulations require automakers to radically reduce the carbon emission levels of their cars by 2021. In practice, this means they are forced to ramp up EV production, even though the market perspective for these cars is quite uncertain.

What does this mean?

Since 2015, car manufactures have to make sure that the average CO2 emissions of the cars they sell on the European market fall below 130 gram/km. The next hurdle is the 95 g/km target set for 2021. Manufacturers failing to meet this target will face steep fines. Most regular combustion engine cars score well above 100 g/km (and a Toyota Prius emits 78g/km) and to compensate for the rest of their fleets, manufacturers are scrambling to bring more or less affordable EVs (or hydrogen cars) on the market. China has set similar carbon targets which also include specific targets for zero-emission vehicles (4% of all vehicles sold in 2020).

What’s next?

As EVs are still more expensive to produce than regular cars and, because of their limited range and longish recharging times, they don’t offer the same value to consumers. Consequently, car manufacturers are likely to lose several thousands of dollars on each EV they (have to) sell. This puts manufacturers in a difficult position. Moreover, the existing EV-recharging infrastructure will need to grow rapidly to accommodate prospective EV drivers (e.g. because they don’t have private parking space) and this is likely to involve additional investments from car manufactures as well.

Another breakthrough on the hydrogen car?

What happened?

Last month, Toyota announced that it will begin mass production of the Mirai, its hydrogen fuel cell model. From 2020 onwards, the company plans to produce some 30 thousand Mirais and to develop additional fuel cell models. The Japanese car maker is not alone in its belief that hydrogen is the fuel of the future. Honda offers a small number its Clarity fuel cell sedans, Hyundai has started taking orders for its Nexo and German automakers BMW, Daimler and the Volkswagen Group (through Audi) continue to pledge support for hydrogen cars. As we noted last year, the hydrogen car has been declared dead more than once, but it nevertheless remains a popular option among car manufacturers and consumers.

What does this mean?

Battery-electric car sales are rising, and it is expected that in 2018 almost 2% of all cars sold globally will be fully or partially electric. Sales are expected to rise further and to reach a market share of 30 to 50% by 2040, but much of this will depend on public support through financial incentives for businesses and consumers. While battery costs are dropping rapidly and the performance of these cars is improving, their limited driving range and long recharging times will most likely remain an obstacle and will probably always fail to satisfy some car buyers. By contrast, hydrogen fuel cell cars do not suffer from these problems. They boast a range of at least 700 km and require only a few minutes to recharge. Because of these advantages, hydrogen could serve as fuel for all sorts of vehicles, from city cars to long-distance trucks and airplanes.

What’s next?

All in all, the hydrogen car is, in theory, the perfect car of the future, but it is still not clear if and how this potential may be realized. Besides overall cost reductions and economies of scale, the success of hydrogen cars will largely depend on the availability of enough refueling stations. Currently there are only about 300 stations worldwide and building a sufficient number of stations will require an enormous financial investment in the range of billions of dollars.  And, to make hydrogen cars genuinely zero-emissions cars, clean hydrogen production will need to ramp up massively. None of these challenges are necessarily dealbreakers, but much capital, patience and political will be necessary to make the hydrogen vision a reality.

Galactic Hegemony

What happened?

Earlier this week, President Trump called for the formation of a dedicated Space Force. Even though the Air Force already has a space command under its wing, Trump believes that a separate organization is needed to (re-)establish American dominance in the galaxy. Trump’s plan was widely frowned upon (e.g. by Secretary of Defense Mattis and the U.S. military itself), but space is increasingly important to life (and warfare) on earth and creating a Space Force may not be such a bad idea.

What does this mean?

From the prestigious space race of the cold war era, today we are in a situation where presence in space is an absolute prerequisite for exercising power on earth. Because of this, a new space race, to build up military capacity in space, has commenced. This includes satellites for intelligence, communication and (missile) navigation that a country needs for its own civil and military activities, but also an offensive system to, for instance, take out enemy satellites or missiles. To this end, China, Russia and India have built similar Space Forces.

What’s next?

For now, military presence in space predominantly serves earthly purposes, such as communication and navigation. This will surely change in the future, when space exploration becomes more important and more valuable in itself. For instance, asteroids might be mined for valuable resources that can be used on earth (e.g. precious metals) or, more likely, directly in outer space (e.g. water to produce hydrogen rocket fuel). Such valuable assets would need some form of protection, especially since territorial claims will be heavily contested.

Chitty Chitty Bang Bang

What happened?

In March this year, a self-driving car from Uber killed a pedestrian in Arizona. Reports now suggest that the incident resulted from Uber’s decision to no longer let its autonomous vehicles (AVs) brake for everything that comes in their path. That is, so far, AVs had been overly cautious, resulting in uncomfortable rides and potentially dangerous situations, and in order to “grow up” they had to learn to disregard “false positives”. One could thus argue that this accident is part of AVs’ maturing, but for now, this and other (fatal) incidents could hamper the further development of AVs; governments may be less welcoming to trials and funding for startups may run dry.

What does this mean?

As we have discussed before, AVs may result in much safer roads, and company-data suggests they already are safer, but some caution is warranted as their cars still operate under relatively favorable conditions (e.g. nice weather, decent roads). Moreover, even when AVs become better drivers than humans, it will be difficult to accept any failures on their part. For one, we ascribe human error to the individual(s) involved, while an AV’s mishap is (rightfully) attributed to the entire fleet. Also, AVs tend to make different mistakes from humans, which seem ridiculous (and easily avoidable).

What’s next?

We will see new fatal incidents with AVs and these will continue to raise debate until we reach a point where we accept them as the new normal, just as we did with regular cars in the past. Such acceptance will, however, only be possible when autonomous vehicles offer a significant benefit over traditional cars. Mere time-saving for the happy few may not suffice, and, ironically, it will ultimately be safety gains that will make us give AVs the benefit of doubt.

Mobility-as-a-Service

For several years, the concept of Mobility-as-a-Service (MaaS) has drawn widespread attention in the transportation sector. MaaS is supposed to allow users to plan, book and pay their trips, door-to-door, across different modes, and providers of transportation. Moreover, since MaaS relies on public and shared modes of transportation (e.g. bike, ride, or (self-driving) car sharing), it aims to do away with current ownership-based models in favor of more sustainable and possibly cheaper use-based models. However, being a typical buzzword, there’s no single definition of the concept and various degrees of MaaS have been put to practice.

Our observations

  • Finnish MaaS Global is possibly the only MaaS provider that actually offers the full package, from planning to payment, including a fixed-price all-you-can-travel subscription for EUR500/month (i.e. resulting in a “Netflix for mobility”). So far it has launched its Whim service in Helsinki and the West-Midlands (e.g. Birmingham) and it will soon do so in Amsterdam and Antwerp. WienMobil offers something similar (without the flat rate option) and another example is UbiGo, which will soon launch in Stockholm.
  • Google Maps goes a long way when it comes to planning trips, but options for intermodal trips are limited and booking and paying are not possible yet. Other limited services are available in, for instance, Germany (Qixxit) and Italy (MyCicero).
  • Younger generations are said to be less interested in owning a car (and its function as a status symbol). Scottish NaviGoGo specifically targets 16-25 year olds who are more likely to adopt MaaS and, as such, will refrain from buying a car later on in their lives. The service is co-designed with youths and is currently on trial.
  • Data about public transport timetables, and sometimes real-time positioning as well, is often in the public domain and can be used by any app developer. Any MaaS system has to combine multiple such public data sources with private ones and handle complex transactions; smart middleware is a necessity. Siemens offers such a backbone for MaaS providers.
  • Sharing data and access to backends between different stakeholders requires a great degree of trust. Blockchain technology may help organize data, manage data rights and execute transactions in a transparent, secure and frictionless manner.
  • Car sharing, as an alternative to car ownership is growing, but its overall impact on mobility practices is fairly limited. In Germany, where car sharing is most successful in Europe, 1.5 million people make use of shared cars. In the Netherlands, car sharing in formal schemes has been stable over the last ten years, but the number of cars available through p2p sharing has grown rapidly from 2012 onwards, to some 25k cars.

Connecting the dots

Similar to other as-a-service models, Mobility-as-a-Service implies a shift from the dominant private-car based ownership model to one based on usage. It also implies a full integration of hitherto separate modes of transportation, including public transport, which has always been offered as-a-service, into a single platform. Both dimensions of the concept hinge on the (societal) ambition to get people out of their private cars and into more sustainable means of transportation. In practice, MaaS would thus enable the planning, booking and paying of any trip by any (combination of) mode(s) on a pay-per-use or flat rate basis. Trips can be optimized for speed, costs, convenience, or sustainability and will no longer require any personally owned means of transportation. While the first ideas of MaaS arose in the 1990s, the first pilots started a couple of years ago and today we only see a small number of actual MaaS schemes operating on a commercial basis.
The rather slow introduction of these systems may be surprising, given all the talk about big data and

seamless integration of datasets. However, in practice, any MaaS platform has to combine disparate data sets and gain access to booking systems of a multitude of both public (or publicly funded) and private organizations, which are not all willing or able to hand over data and control over their booking systems, while losing direct contact with customers and potentially even losing customers to other modes or operators. Since most timetable data is readily available, a service like Google Maps can “easily” offer trip planning, but the real challenge is to integrate everything into a single booking and payment system.
To get MaaS off the ground, despite these barriers, it is conceivable that public pressure from, for instance, a local transport authority is needed to persuade transport operators to cooperate with a designated MaaS provider. Alternatively, relatively neutral intermediaries may build a platform on the basis of which multiple actors, e.g. transport operators, can build their own consumer-facing MaaS products.

Implications

  • Different geographical contexts call for different MaaS solutions. In the dense urban context, private cars may be substituted by mass transit, taxis and bikes. In suburban and rural areas, last-mile solutions to and from transit hubs may be more important, as well as on-demand public transport.
  • Whoever succeeds in developing a local, regional, or global leadership position, MaaS will occupy a key position in consumers’ lives (and on their smartphones). Since a MaaS provider knows exactly where people are going at what time, additional revenue streams are up for grabs: targeted advertising, e-commerce/grocery pick-ups, tailored content for stopovers, etc.

Blue gold

The world is increasingly facing water stress. While water is of vital necessity to all living organisms, competition over freshwater resources grows as it is essential to the functioning of all industries and increasingly becoming a strategic commodity to countries. What are the risks and drivers of water stress and what are our approaches to facing a world where water is becoming scarcer and more valuable?

Our observations

  • The UN World Water Development Report was published last month in conjunction with the World Water Day. It notes that without taking action to reduce the stress on rivers, lakes, aquifers, wetlands and reservoirs, more than 5 billion people could suffer water shortages by 2050, due to climate change, increased demand, and polluted supplies. Today, 2.1 billion people already live without safe drinking water at home, affecting health, education and livelihoods.
  • Agriculture accounts for 70% of the freshwater taken out of natural reserves. Research has shown that about 40% of the water used for irrigation is derived from unsustainable withdrawals that disrupt the flows of rivers. The energy industry, manufacturing industry and the public water supply are the next most water consuming domains in Europe.
  • Pollution of water is damaging ecosystems, affecting the quantity and quality of water available for human consumption. Pollution has impacted almost every river in Africa, Asia, and Latin America since the 1990s and is mainly driven by agriculture. But other industries and cities also pose a significant threat, with about 80% of industrial and municipal wastewater being discharged without treatment.
  • Drought due to climate change is currently a clear threat in Cape Town and in Bolivia, where the second-largest lake is drying up, but potential drought belts are also encompassing Mexico, western South America, southern Europe, China, Australia, and South Africa. Droughts can lead to large-scale migration. Adaptations to this ‘new normal’ include building reservoirs to store water, and switching to crops that require less water.
  • Illustrative of the golden business of drinking water are the examples of Russia’s drinking water export to China, which is struggling with freshwater scarcity, and the success of the bottled-water industry. The U.S. goes through 50 billion water bottles a year and bottled-water has outpaced milk, coffee, and juice in number of liters of drinks sold.

Connecting the dots

Although the majority of the earth’s surface is water-covered, only 2.5% of it is freshwater and desalination costs a lot of energy. The risks of freshwater stress are manifold. It can spark inequality, social unrest, and even geopolitical conflicts, as we noted earlier. Water scarcity has played a role in driving tensions in conflicts such as in Syria and Yemen. It also gives rise to tensions between countries. An example is the Grand Ethiopian Renaissance Dam located in the Blue Nile, that has caused strife between Egypt and Ethiopia. Another example is the Doklam crisis between China and India. Last year, China refused to cooperate over shared water resources, showing that the country is willing to use water as a geopolitical weapon as regional tensions unfold. As water gets scarcer and more valuable, it becomes a strategic commodity for all countries, and competition over it will rise. Meanwhile, water resources are prone to privatization. There are many controversial cases of companies privatizing the water supplies of economically depressed communities, as Nestlé has done. Finally, deregulation is another threat to clean drinking water. Under Trump, the U.S. has repealed the 2015 Clean Water Rule, which regulated and protected U.S. waterways from development and pollution.
Today’s growing water scarcity urges us to rethink our approach to water. While climate change and global warming are among the drivers behind water problems, the world’s increasing water stress is largely driven by mismanagement, pollution, and overextraction of water sources. Water experts

like Asit Biswas claim that there is no physical scarcity of water in urban areas, but that cities are facing a crisis in the management of urban water and wastewater services. In that sense, water stress is a manmade crisis. The omnipresence and fluidity of water makes it difficult to grasp and could partially explain our mismanagement. According to hydrologists, water cannot simply be ‘caught’ in one model or one solution. Water never sits still and yet we tend to make decisions emphasizing the floating, circular nature of water. For example, we drink bottled-water, a majority of the plastic bottles are not recycled, driving the pollution of our drinking water with microplastics. Indeed, the UN report concludes that the focus is now on human-built infrastructure to improve water management, while these ignore the approaches that nature presents to us; different solutions we could mimic in order to improve our water availability, like groundwater recharge and natural and constructed wetlands. Another positive development is that the depletion of freshwater resources has led to growing interest in the water sector in circular approaches to water, such as the reuse and recovery of watercycle residuals. We increasingly see initiatives to calculate the value of wastewater or to recover valuable energy and raw materials from wastewater, like phosphates.

Implications

  • The big difference in (lack of) profitability of public transport across cities suggests that cities and their operators can still learn a lot from each other. Some cities struggle with outdated infrastructure (e.g. New York City) and may need to invest in significant upgrades, but they may also have to adopt new modes of management and operational planning.
  • Mobility-as-a-service models are still in their early days and have not proven very successful yet. Eventually, they may require autonomous vehicles to realize their potential as labor costs weigh heavily on public transport in general and ride-hailing services especially.
  • Even though (European) governments traditionally invest in public transport infrastructure (and contract operators to provide the actual transport services), more recently, (local) governments are increasingly looking for private investors to invest in the new infrastructure (through public-private partnerships); e.g. in Britain and the Netherlands.