NATURAL RESOURCE ECONOMICS

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NATURAL RESOURCE ECONOMICS

Sponsored by a Grant TÁMOP-4.1.2-08/2/A/KMR-2009-0041 Course Material Developed by Department of Economics,

Faculty of Social Sciences, Eötvös Loránd University Budapest (ELTE) Department of Economics, Eötvös Loránd University Budapest

Institute of Economics, Hungarian Academy of Sciences Balassi Kiadó, Budapest

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NATURAL RESOURCE ECONOMICS

Week 11

Introducing to the environmental context of transport via the development of the

waterway management on the Danube

Gábor Ungvári

What to take into account and what not to in relation to shipping:

• What has been known for long: Efficacy in energy-use

• Less problems with congestion

• Decreased instances of accidents

• What tends to be neglected: costs of developing and maintaining the waterway + indirect costs of river-transformation incurred by those living by the shores (the detailed EU-financed studies in the comments)

• The real questions is finding the balance between the (concentrated) advantages incurred from increasing transport efficacy and the short- and long-term

disadvantages incurred by other users of the river and its vicinity.

• The necessary knowledge is not factored into the decision-making process.

– Accounting for the effects suffered by the ecological services of the river and the flood area, and the users of these services.

– A multi-layered reconsideration of the transportation sector – on both sides of the market bubbles

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Europe’s role on the global market and the role of the continental shipping infrastructure

in terms of European welfare

• The main trends of transportation evolving during the development of European industrial capitals (18-19^th centuries): in-flow of raw material to market centres and the out-flow of ready-made goods from centres.

• The development of transport channels on the continent aided joining the Atlantic- dominated trade system. Which created the opportunity of producing for the markets.

• Even then, the financial costs of increasing transport efficacy were absorbed by the communities – with winners and losers (this is a historical aspect of the middle section of the river that is yet to be studied!)

• BUT the increase in transport efficacy was equally beneficial to the European societies in terms of accessing markets and due to manufacture and production, which compensated the decrease in natural capital as:

• THE MULTIPLICATING EFFECTS OF MANUFACTURING, THE ANCILLARY PROFIT MANIFESTED IN EUROPE.

But Europe’s situation has changed!

• The scope of the export-oriented economic growth has slowly narrowed down, the market expanded and the distribution of comparative advantages has changed.

The raw material and labour-intensive production is relocating from the continent and this process will not cease.

• The flow of goods has changed. The EU is facing asymmetric trade conditions. The import, partly due to its volume (in a physical sense) exceeds what the continent exports.

• The labour force (OURSELVES!) is now in competition with the developing world.

And our position is endangered: (1) Our advantage in knowledge will slowly, but steadily frizzle out, the differences in political systems will hinder (2) the evolutions of European-type welfare systems (we have to face competitors with permanently

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4 lower labour-costs) and (3) achieving similar environmental regulations.

Consequence: The least adaptable social classes are subjected to the most competition, generating growing individual and communal cost-accommodation

• In this present situation, the costs of increasing transport efficacy will be absorbed by the community to a greater extent since due to the relocation of production only a fraction of its benefits will be detected on the continent, while its costs (due to the current condition formed by previous landscape-changes) will increase. Our

individual consumer interests (the lower-priced the product the better) and our communal interests conditioned by usufructs from ecological system-maintenance are now in conflict.

Solutions?

• What can pose limits to the equalization of prices that a market logic assumes inevitable?

– Running ahead of things: increasing the knowledge capital and improving our adaptive, innovative, entrepreneurial

– Scaling back indirect costs: the more favourable production and living

conditions supported by locally producible and consumable welfare services (Ecological services)

– Costs incurred due to distance

• The problem with the current development plan for shipping on the Danube – it aims to expand based on an obsolete strategy of global commerce by incurring losses to our very capacities that are in need of development.

• The loss incurred by innovation profit is significant, since these resources should be invested in other areas.

• Within transportation:

– Transportation solutions that increase internal communication and improve our reach to neighbouring regions, but which do not increase external accessibility are needed (sub-regional and north-south relations)

– Mitigation along regionally already existing, successful global good-flows, rather than aiming for a potential growth (Northern Adriatic)

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Are our expectations concerning waterway development warranted?

• The Danube is not the Rhine

• Are the parameters of the waterway the real problem?

• Why is the current capacity grossly underused? How is the supply adjusted to the demand?

• The basis of our verdict: A cost-benefit analysis of waterway transport development that builds on the Danube shipping traffic

• Further economic background: Socio-economic considerations on Plans for Inland Waterway Transport for the Danube River – Chapter 7.3: Arguments about

obstacles to IWT development

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The quantity

• Transport corridors passing through Hungary constitute 25% of the Danube international transport

• Goods loaded and unloaded in Hungary (green), 12,7%,

• Goods shipped to and from Slovakia through Hungary, 1,4%

• The transit traffic on the Hungarian section (blue) ,10,7%

• The extent of traffic on the Hungarian section in terms of transportation costs is a market of approx.110-120 million €

All products BENELUX DE-R DE-D AT SK HU HR RS RO BG UA Total

BENELUX 17.6 5.0 0.1 1.2 0.0 0.0 0.0 0.0 0.0 24.0

DE-R 5.5 0.6 0.1 0.1 0.0 0.0 0.0 0.0 0.0 6.3

DE-D (Bavaria) 13.2 10.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 23.5

AT 1.2 0.2 0.2 0.4 1.7 0.0 0.3 0.1 0.6 0.0 4.8

SK 0.4 0.3 0.0 5.6 0.0 0.0 0.1 0.8 0.1 0.0 7.4

HU 2.9 0.8 0.3 2.6 0.0 0.0 0.0 2.0 0.3 0.0 8.9

HR 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 0.1 0.0 1.2

RS 0.1 0.0 0.0 0.4 0.0 0.0 0.0 1.6 0.2 0.0 2.3

RO 0.0 0.0 0.0 2.7 0.2 0.6 0.1 1.5 1.7 0.6 7.4

BG 0.0 0.0 0.0 0.4 0.1 0.1 0.0 0.4 1.2 0.1 2.3

UA 0.0 0.0 0.0 5.6 0.0 0.0 0.0 0.0 1.3 4.8 11.8

Total 17.8 11.5 23.7 23.1 1.0 3.7 0.1 2.5 8.1 7.8 0.7 100.0

load

A fuvarköltség megoszlása országok szerint

Alaphelyzet megoszlás

Tranzit 47%

Magyarország 49%

Szlovákia 4%

A fuvarköltség megoszlása gázló szakaszok szerint

Alaphelyzet megoszlás A teljes magyar és német szakaszon áthaladó forgalom (Tranzit 1) 2%

A teljes magyar szakaszon áthaladó forgalom (Tranzit 2) 49%

A magyar felső szakaszon és a német szakaszon áthaladó forgalom 33%

A magyar felső szakaszon áthaladó forgalom 9%

A magyar alsó szakaszon áthaladó forgalom 7%

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Results for transportation costs

• For major interventions, the share of international traffic in savings increases

• For Hungary to take on additional tasks that go beyond the minimum requirement only makes sense with if there is corresponding international engagement e.g.

arranging replenishment of alluvium

Alap- állapot Millió €

Csúcs gázlós forgató- könyv

Forgalmi probléma szempontú foragtó- könyv

Hajózó út paraméter szempontú forgató- könyv

Alap- állapot

Hajózó út paraméter szempontú forgató- könyv Gázló csoport szerint

Tranzit a magyar és

a német szakaszon 2 -4% -7% -7% -3% -7% -11% -12%

Tranzit a magyar szakaszon 56 -5% -10% -11% 0% -5% -10% -11%

Magyarországról a Rajnára 38 -4% -5% -5% -2% -7% -8% -8%

Magyar felső 10 -3% -4% -4% 0% -3% -4% -4%

Magyar alsó 8 -4% -5% -5% 0% -4% -5% -5%

Nemzetiség szerint

Magyar 56 -4% -5% -5% -2% -6% -7% -7%

Szlovák 5 -6% -12% -14% 0% -6% -12% -14%

Nemzetközi 53 -5% -10% -11% 0% -5% -10% -11%

Összesen 114 -4% -7% -8% -1% -5% -8% -9%

Német fejlesztés esetén

The results, based on annual

transportation costs

Alap- állapot Millió €

Hajózó út paraméter szempontú forgató- könyv

Alap- állapot

Hajózó út paraméter szempontú forgató- könyv Gázló csoport szerint

Tranzit a magyar és

a német szakaszon 2 -4% -7% -7% -3% -7% -11% -12%

Tranzit a magyar szakaszon 56 -5% -10% -11% 0% -5% -10% -11%

Magyarországról a Rajnára 38 -4% -5% -5% -2% -7% -8% -8%

Magyar felső 10 -3% -4% -4% 0% -3% -4% -4%

Magyar alsó 8 -4% -5% -5% 0% -4% -5% -5%

Nemzetiség szerint

Magyar 56 -4% -5% -5% -2% -6% -7% -7%

Szlovák 5 -6% -12% -14% 0% -6% -12% -14%

Nemzetközi 53 -5% -10% -11% 0% -5% -10% -11%

Összesen 114 -4% -7% -8% -1% -5% -8% -9%

Német fejlesztés esetén

The results, based on annual

transportation costs

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Results, based on the annual values of the25-year programme-cycle

-2,8

-4,0

-9,7

-2,8

-4,0

-9,7

-2,8

-4,0

-9,7

2,4 2,9 3,0 3,6 4,3 4,6

5,7

9,5

10,5

-0,5 -1,1

-6,7

0,8 0,3

-5,2

2,9

5,4

0,8

-12 -8 -4 0 4 8 12

C s úcs gázlós forgatókönyv

Hajó-forgalmi probléma s zempontú forgatókönyv

Hajózóút paraméter s zempontú forgatókönyv

Magyar relációk Magyar relációk,

ha van német fejles ztés

A teljes forgalomra vetített eredmény

-12,0 -7,0 -2,0 3,0 8,0

B eavatkozás Megtakarítás E redmény

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Results

• For Hungary, the least intrusive intervention would be most beneficial in terms of the Hungarian traffic

• With regards to overall traffic, all interventions are profitable for the sector, but it is obvious that beyond a certain level increasing the intensity is unnecessary.

• Ecological aspects / indirect effects can define the optimal intervention between the peak-shallow oriented scenario and the ship circulation oriented scenario

Beavatkozás A beavatkozások (+ fenntartás) költsége

Magyar relációk

Magyar relációk, ha van német fejlesztés

Csúcs gázlós forgatókönyv -2,5 -0,1 1,1 3,3

Hajó-forgalmi probléma

szempontú foragtókönyv -3,5 -0,6 0,8 5,9

Hajózó út paraméter

szempontú forgatókönyv -8,4 -5,4 -3,9 2,1

Forgatókönyvek

Eredmény = Megtakarítás - Beavatkozás 25 éves időszakra számított annualizált értékek (Millió €)Annual values for a 25-year period Beavatkozás

A beavatkozások (+ fenntartás) költsége

Magyar relációk

Magyar relációk, ha van német fejlesztés

Csúcs gázlós forgatókönyv -2,5 -0,1 1,1 3,3

Hajó-forgalmi probléma

szempontú foragtókönyv -3,5 -0,6 0,8 5,9

Hajózó út paraméter

szempontú forgatókönyv -8,4 -5,4 -3,9 2,1

Forgatókönyvek

Eredmény = Megtakarítás - Beavatkozás 25 éves időszakra számított annualizált értékek (Millió €)Annual values for a 25-year period

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Statistics on shallows – Hungarian section

• The condition of the Hungarian section – occurrence probability of shallows

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

január február

március április

május június

július auguszt

us

sze ptem

ber október

november december Alsó

Középső Felső A teljes magyar szakasz 5 éves átlag AGN

Vízmélység dm

Március - augusztus

Szeptember - február

16 0% 3%

18 0% 11%

20 0% 22%

22 4% 36%

24 8% 51%

25 11% 58%

26 14% 62%

Gázlós 15% 66%

Magyar szakasz

min dm / napok 1 2 3 4 10 15

18, vagy nagyobb 94% 93% 93% 92% 89% 87%

22, vagy nagyobb 80% 78% 76% 74% 67% 61%

24, vagy nagyobb 70% 68% 66% 64% 54% 49%

25, vagy nagyobb 65% 63% 61% 59% 51% 46%

26, vagy nagyobb 62% 59% 58% 56% 47% 43%

27, vagy nagyobb 59% 57% 54% 52% 44% 39%

2004-2008 / tartósság napok 1 2 3

Felső Duna szakasz Magyarország 61% 58% 56%

Alsó Duna szakasz Magyarország 64% 62% 60%

Teljes magyaországi szakasz 59% 57% 54%

Straubing-Vilshofen szakasz 47% 43% 40%

A teljes magyarországi és a németországi szakasz

együtt - felfelé fuvar esetén 35% 32%

A teljes magyarországi és a németországi szakasz

együtt - lefelé fuvar esetén 39% 36%

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• Is the condition of the Hungarian section the worst? What causes the controversy?

• Overall the Hungarian section appears to be of better quality, but during adverse periods the chances of extremely low water level is less likely on the German section

Conclusions

• For Hungary, the least intrusive intervention would be most profitable – in

coordination with similar measures on the German section. This, in itself, already fulfils the stipulations of the AGN Agreement.

• By taking ecological aspects / indirect effects into consideration, the ideal level of intervention can be somewhere between the peak-shallow oriented scenario and the ship circulation oriented scenario.

• With regards to overall traffic, all interventions are profitable for the sector, but more intensive interventions are more profitable for the transit traffic sector, and it is obvious that beyond a certain level increasing the intensity of water-course measures is unnecessary.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

január február

március április

május június

július augusztus

szeptember október

november december A Straubing-Vilshofen szakasz

A teljes magyar szakasz 5 éves átlag - magyar AGN elvárás - éves átlag 5 éves átlag - német

Vízmélység dm

16 0% 3% 0% 0%

18 0% 11% 0% 2%

20 0% 22% 3% 15%

22 4% 36% 7% 34%

24 8% 51% 18% 52%

25 11% 58% 23% 59%

26 14% 62% 31% 63%

Gázlós 15% 66% 38% 68%

Magyar szakasz Német szakasz

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• In terms of total traffic (inc. international) committing to an optimal intervention is profitable for Hungary if it can agree on aspects such as:

– Replenishing alluvium,

– Financing maintenance works, including the maintenance of the side-arm system

– Financing forecast, traffic management, and vehicle technology developments that would improve waterway transport

– Improving loading and transferring capacities ports

– Developing integrated railway-waterway transportation systems