Author: Jonny Hankins

Jonathan's Author Bio: Co Editor of the International Handbook on Responsible Innovation, and author of Responsible Innovation, A Narrative Approach, Jonny works for the Bassetti Foundation in Milan publishing articles on innovation and responsibility on their website and in academic and trade journals and also blogging about his interests. He is on the editorial board of the Journal of Responsible Innovation and member of the the Virtual Institute of Responsible Innovation

Mining the Seabed

4 Replies Jonny Hankins

Last year I wrote about the possibility of sending robots to asteroids to mine them for their metals, and although this might sound a little far fetched there are companies that exist to promote and make the idea possible.

In this posting I would like to draw attention to proposals for mineral mining a little closer to home. The International Seabed Authority (part of the UN) released a report last week about how it intends to manage the extraction of metal rich rock from the seabed.

The sea floor contains gold, copper, manganese, cobalt and other metals, and it now seems that the mining companies have the engineering capability to harvest it. The prices are high for these metals too, so they also have some economic push to help them along.

Licenses to prospect have already been granted, so it seems only a matter of time until companies are given permission to start removing pieces of the sea floor.

A hydrothermal vent under the ocean

A Hydrothermal Vent

What they are interested in are pieces of the chimneys of hydrothermal vents which contain many of these metals in high quantities. Some estimates related to the bed of the Eastern Pacific Ocean give an idea of the amount of materials that are down there, seven billion tonnes of manganese, 340 million tonnes of nickel, 290 million tonnes of copper and 78 million tonnes of cobalt.

This is a completely new field for mining companies though, nobody has experience in this kind of work. But the only way to gain experience is through actually doing the job, so the authorities are in a tricky position. How can they give licenses to a company with no track record in the field? Surely that means accepting a trial and error system that will inevitably lead to accidents and pollution. There are plenty of recent examples of deep sea oil drilling going very wrong, and that is after many years of experience.

And these hydrothermal vents host life that only exists in the unusual conditions that they create, what will happen to those highly developed and particular creatures and plants?

So I ask the possibly false question of sustainability. We all use these minerals, they are in everything we touch but we don’t tend to think about where they come from. Mining is a dirty business in any situation, and by definition it cannot be sustainable as far as I can see because we are dealing with finite quantities of materials that will not reproduce themselves.

But should we or indeed can we draw a line? Asteroids, the seabed, the Antarctic, where next?

Taxing the Smartphone

4 Replies Jonny Hankins

On Monday a report was released in France that contained the suggestion that a tax should be levied on Internet devices in order to raise money to promote and protect French cultural production.

A Tax Paid Phone

A Tax Paid Phone

For several years France has had a policy of taxing broadcasters and spending the money on supporting its own film and entertainment industries, but revenues are falling. The problem seems to be that many more people are accessing their entertainment via the Internet and therefore not contributing to its production cost.

The Lescure report as it is known suggests a tax of between 1 and 4% on any Internet capable devices (smartphones, eBook readers and games consoles included), but as we might imagine many of the producers of these devices are not happy about the proposal.

Money has to be raised to maintain the entertainment industries, but many of the companies that provide access to this entertainment are not based in France and do not contribute. They probably don’t want to either, and so we come across the same problem that I wrote about last week, collecting national taxes from international corporations based in another state is never easy, and borders are porous.

The proposed tax would replace one already in existence upon storage devices. Currently tax is levied on blank CD’s and memory sticks as well as computers with hard discs.

The manufacturers complain that the price of the devices would rise leading to fewer sales, although the author of the report argues that such a small percentage increase would make little difference, and would not even effect the home job market because most of these devices are assembled overseas. A 1% tax would raise something of the order of 90 million Euro a year.

The problem remains though. As our sources of entertainment move away from pay TV, publicity funded channels and national subscription systems such as the BBC, money is taken away from the producers and associations that represent and fund these industries. Some see the fact that Google and Apple amongst others are operating outside the tax system and are not contributing to the industries that they make their money from as unfair, and hope that this change in tax law will go some way to evening out the field.

The Wall Street Journal goes into a little more depth on the matter in its free online edition.

I wonder if France takes this step if others in the EU will follow. There are many different ways of making money through so called free downloads as we all know, but the money ends up in the pockets of the provider and not the producer and the industries involved are feeling the pinch. Maybe this needs to change.

Taxes on Internet shopping

6 Replies Jonny Hankins

Here in the US the Senate just passed the Marketplace Fairness Act, and it is causing a great deal of debate on all sides.

I want you to pay taxes

Pay more taxes on your online goods

In the USA each state can levy its own sales tax. The rate is not equal across the states, for example here in Massachusetts I pay 6.25% sales tax on my new fridge, but if I drive to New Hampshire I do not pay anything. You can check out the differences on this interactive tax map.

The legislation described above aims to make Internet sellers collect the taxes due to the buyer’s state, something they are not currently required to do. At the moment I order my fridge from a New Hampshire based Internet retailer and I don’t pay any tax. In theory I should go and pay the state myself, but with online sales worth billions there is no enforcement and no queues (lines) outside the tax office.

Retail outlets argue that this gives online sellers an unfair advantage, but they in turn argue that the collecting and payment of state taxes under the new proposed regime would be expensive and extremely complicated. If they sell me the fridge here it costs a certain amount, they have to collect the tax and pay it to Massachusetts, but my friend in Florida pays a different amount and the tax is paid to the state there. Now this might not be too complicated a system for Amazon to manage, but a small Internet based retailer might not have the technical expertise or personnel to carry it out.

The proposed bill does exclude traders who sell under a million dollars of goods, but in today’s world that could still be a very small organization.

The technical difficulties of collecting the taxes through any other means seem insurmountable though, and the problem is very much related to the idea that borders can be controlled. States have different laws about selling many things, but if these things can be bought on the Internet and shipped to an individual house I cannot see how these rules can be adequately enforced. Is it a form of smuggling to buy something that you cannot get in your own state?

The result of the bill (if it passes although it does have bi-partisan support) will be that local sales tax will be levied at source and so the fridge will cost more. Maybe this is just and fair, maybe it will choke some smaller businesses, who knows?

What do you think?