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A global climate deal to cut shipping emissions was nearly sealed, until it wasn't.
From the discussions, I've always been aware that these are actually big discussions for the organisation.
We are disappointed that this week's meeting hasn't come forward with a solution.
It's World Business Report from the BBC World Service.
I am busy at Dubai.
On the way, we'll hear from those directly affected by the stalled global shipping emissions deal.
Also today, why California is building public GPU hubs to help more people tap into the AI boom.
A deal to cut carbon emissions from global shipping has been put on hold for a year after a last-minute intervention by Saudi Arabia.
More than 100 countries had gathered in London ready to approve a treaty that would have fined ship owners who didn't meet emission standards.
Arsenio Dominguez is Secretary General of the International Maritime Organization.
The negotiations have always been very intensive.
There's a lot of work that has to go into this in order to have a set of measures that can provide for the opinions and objectives of all the member states, of course.
In this session, we have the framework set of amendments for adoption.
Throughout the negotiations and the discussions, several areas for clarifications were raised which, in the end, led to the committee to agree to adjourn the meeting for a year.
Some of them have to do with the guidelines that we need to provide for the implementation of the amendments.
They have to do the lifecycle assessments that we're carrying out for the different fuels and technologies that will assist the decarbonisation.
We had guidelines for the practical implementation of these amendments, including the measures for post-state control, as well as reporting of data.
Additionally to that, decisions for the setting up of the gfi, the green fund.
Equally, we need a board, high level board, for the decisions that need to take place in relation with the board and also the conversations of how the revenues will be dispersed in accordance to the gse strategy.
And did this come to you really as a surprise?
I always work with the member states in order to make the necessary progress.
From the discussions, I've always been aware that these are actually big discussions for the organization.
These are discussions that, as we have said, the decarbonization of shipping not happening just within the sector.
We need all the sectors to play their part.
And we are serious about protecting the environment and, of course, providing a just and equitable transition.
I do always work with the membership in order to find the consensus and to move the way forward.
But during the negotiations this week it started to become clear that the membership needed more time to address some of the observations that were raised during the meeting.
And when you reconvene in a year, do you think or do you see the possibility of more countries backing out of this?
I don't work on speculations.
And of course, I always work in moving forward in a positive way.
And since we have heard this week the concerns from several member states on the table, this is an opportunity to immediately start addressing those concerns, encourage those conversations, encourage the dialogue in the exchanges views, in order to take us to what the committee agreed today, which is a journey to come back for the adoption in 12 months.
And without this framework in place, what does this actually mean for your broader target of net zero emissions by 2050?
From the moment that we adopted the strategy in 2023, I have continued to voice my encouragement to member states, to the industry and other sectors outside IMO, like the energy sector, to take the proactive approach into the development of the new technologies, the new fuels, the uptake of these fuels.
Work on the incentive mechanisms that are also necessary will assist these transitions and be proactive and demonstrate that the commitment is still there.
And that in line would also provide additional clarifications to some of the concerns that were raised this week.
So the promotion to be proactive and my call for that will continue and asking for the member states and all the stakeholders to take those actions.
Arsenio, let's talk about the ship owners and investors who are also preparing for this deal.
Some have already started ordering cleaner vessels and fuel.
So what happens to them now?
The opportunities are there and the more that this continues to evolve to progress that we introduce the change, the more that it demonstrates and plays into the adoption of the amendments, because there's more confirmation that this transition is happening and is possible.
Arsenio Dominiquez, Secretary General of the International Maritime Organization there.
Well, let's bring in Emily Stausbo, who's a shipping analyst in Denmark, to join our conversation now.
Emily, thanks for joining us.
You've been watching these developments closely.
What's your take on where this leaves the industry?
Well, it leaves uncertainty, again, to an industry that is facing an awful lot of it at the moment.
I think it's again one of the interesting cases of kind of trade being weaponized by the US in pursuit of its policies.
But clearly, there's a lot of work to be done on the regulation side of things.
I think when we cover container shipping, there is also a push from the side of the customers.
So the cargo owners are pushing more than perhaps in other shipping sectors.
But we clearly need some more guidance on regulation for carriers to be able to get to net zero by 2050.
Uncertainty is the key word there.
Hang on a moment, Emily.
Let's hear from those directly affected.
That's the shipping companies themselves.
Stuart Neill is the Director of Strategy and Communications at the International Chamber of Shipping, and he shared his thoughts about the uncertainty this is causing.
Industry really needs that clarity, that certainty, to enable us to invest in the billions of dollars, both on board ships and on land, that's going to be required to decarbonise the maritime sector.
So this just ensures that there's a lack of clarity for all within the maritime value chain.
Were some ship owners sort of relieved to see it delayed, or were all the ship owners generally in favour of having a clear global carbon rules?
So we represent about 80% of the world shipping.
And we've worked with the IMO and with member states for quite some time now.
Our first proposal was in 2019 to the IMO for the ways to move forward with this.
So we have been working both on the technical details and more broadly on the sort of financial details on this.
We wanted this to be a way to move forward in a pragmatic way that would actually enable the shipping entity to decarbonise and also to reward those that need to be incentivised to produce the new fuels, to produce the new ports, to produce all of the elements within that value chain that's required when a ship moves, not just in the UK but anywhere in the world.
Nearly 90 of all the items that we have in the world are transported at some point in their life on board a ship, and that can be anywhere in the world.
So there's a lot of investment that's going to be needed.
Yes, I'd like to talk more about the investment now because obviously, as you just mentioned, there's been a lot of heavy investments in cleaner ships, alternative fuels, new engines, all in anticipation of this deal.
So what does this uncertainty mean for those investment plans now?
So a lot of the investments were on dual fuel operations.
It also, one of the most important things is there's been a lot of investment in energy efficiency.
So making sure that the engines are much more efficient in the way they operate, even aerating holes, so that they use less drag, so they need less fuel as well.
So there's a lot of work being going on in that respect.
This agreement would have meant the next quarter step in in that process and it's important because it it's not just the shipping industry itself, it incentivize the fuel producers, because that's where you know we don't make the fuel.
We use the fuel like anyone in a car.
The car driver doesn't make the fuel, they have to buy it from a fuel producer.
And that's what we needed to do to get the incentives for fuel producers to start investing in in their fuel production as well.
And one of the biggest debates around the framework was cost.
How worried are ship owners about a future where carbon prices, fuel costs and regional regulations start to stack up?
So where we have a concern is where we're talking about multiple layers of different regulations all over the world.
With the structure of the IMO proposal.
The money would be invested back into the industry to decarbonise.
Other schemes that are being proposed don't have that.
So effectively that becomes a tax on trade and doesn't provide the incentives or the ability for the industry to invest in the right ways.
So that is a concern.
And we could see multiple schemes all over the world, duplicatory amounts of money being taken out and also duplicatory different standards.
And sometimes not aligned as well.
So it will increase the amount of complexity for the industry and that may also increase the cost for transporting goods.
Do you think this setback changes how the world sees the industry's commitment to climate action?
I think the reality is that the industry is committed to moving forward.
The shipping industry is very exposed to the impacts of climate change.
We're right out there in the ocean where the weather is.
So it's not something that we're not attuned to.
And I think that's something that the industry wants to play its part in.
Emily Stansbold, shaping analyst, is still with us.
You heard Stuart there talking about the need for clarity in the industry.
So do you agree that regulatory uncertainty is one of the biggest barriers to progress right now?
Yeah, it really is.
These ships sail for a long time.
We have plenty of ships sailing today that will still be around in 2050.
We have at the moment a record high order book for container ships.
And many of those have been costed extra because carriers have gone for some alternative fuel capabilities.
But it's very hard to know because there are many different options.
And when you don't know what the regulation is, it's hard to know which is the right fuel to bet on at this stage.
And what about the cost of this framework when it's eventually adopted?
We're talking about the implication it will have on shipping costs.
I think from our perspective as an SM, we think about the owners of cargo being moving containerized goods.
They're facing other cost pressures that are more important at the moment than this framework would be, notably from the US when it comes to tariffs and the port fees that were just introduced earlier this week.
So, in comparison to those two measures, the actual cost from this policy to the cargo owners would be minimal compared to the rest of it.
But of course, the ship owners and the operators, that's an extra cost to fit in.
Emily Stiles, World Shipping Analyst.
Many thanks for sharing your thoughts with us.
Now let's bring in Chris Lowe, who's Chief Economist at FHN Financial in New York.
Chris, you've been listening in on the conversations.
From a market perspective.
Now, how much does that kind of uncertainty shake investor confidence in the maritime and logistics sectors?
Well, quite a bit.
I think the big thing from an economic and financial standpoint is that change takes time and it takes a great deal of investment to execute.
And so, when plans change at the last minute, when regulations are put off, All of these things are expensive.
They leave people hanging.
I think honestly, the companies likely to emerge on top once the dust settles are the ones who are already making progress in the transition to cleaner fuels.
And the reason is, you know, eventually we're all going to have to do it.
In other news now, Chris, we've been hearing about Apple's big new streaming deal with Formula One.
It's a five-year exclusive for U.S. viewers.
What does this say about the value of live sports rights?
You know, here it's very interesting because all live sports have undergone a real transition in the last couple of years.
We have three primary networks that carried all sports forever.
And in the last few years, they have been moving continuously. to cable.
And then this year we started to see them going to streaming services.
I think the F1, you know, for most Americans, it's a new sport.
We haven't had access to it in the past.
And I think it's potentially a very successful one.
It certainly is exciting to watch.
And while we wait for the excitement, now let's talk about China's cambrican, which posted a massive jump in sales.
We're talking 14-fold after U.S. restrictions sidelined Nvidia.
What does that tell us about how the markets are responding to tech decoupling between the US and China?
You know, it...
US and China both very committed to AI, very committed to investing in the future.
And clearly, they're finding ways to get it done, whether together or apart.
And I think that's what that story is all about.
All right, Chris Lowe, Chief Economist at FHN Financial in New York.
Many thanks for your time there.
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You're with World Business Report from the BBC World Service with me, Bissi Adebayo.
Now, the U.S.
Chamber of Commerce is taking the Trump administration to court and it's over the new 100000 fee for the H-1B visas, with most of its members being small businesses.
The chamber says that kind of price tag could make hiring skilled foreign workers nearly impossible.
Earlier, I spoke with Daniel Costa, who's director of immigration law and policy research at Economic Policy Institute.
It is a steep fee.
I do think that's true.
And I think some firms will have a problem paying it.
And the biggest employers in the H-1B program are large multinational firms and the big tech firms like Amazon Apple Google Meta, as well as a number of large IT outsourcing firms like Tata and Infosys.
And those firms, I think they probably can afford the fee.
They often hire 1,000, 2,000, 3,000 workers per year, multiply that by $100,000 fee.
When you compare it to the fees that are in place now, it's between 2000, 3000 to 5000 for a firm to hire an H-1B.
And then when you add the costs of paying for an immigration attorney to do the filings You're talking about anywhere in the neighborhood of 3000 to 10000 to pay for NH-1B.
And now this 100000 fee is on top of it, and it's more than 10 times what someone would normally expect to pay for NH-1B.
They will have to make a judgment call about whether hiring those workers are worth it to them to pay those fees.
But I do think that the bigger firms will be better able to pay it.
Smaller firms and startups will have a real problem paying this fee.
And so it kind of benefits the biggest firms and could hurt the smaller firms the most.
But the Trump administration says this move will protect American workers and stop companies from driving down wages.
So is there any evidence that these H-1B visas actually lower pay or take jobs away from American workers?
I would say that the data show that the H-1B is mostly being used for workers that are paid less than the local median wage for the occupations that they fill.
And that's because the H-1B program has this scheme for how you're supposed to pay your H-1B workers, but it mostly allows employers to pay wages that are on the lower end.
So most of the workers that come in through H-1B are classified as entry-level workers by the employers themselves.
So that's what leads to this criticism that they're undercutting US wages, because most of the workers are coming in at wages that are below the local median for the jobs that they're filling.
So that is a valid criticism.
And there's other criticisms that the program.
For example, employers do not have to search for US workers before they hire a worker from abroad in this program.
And there's also not a lot of enforcement happening in the program to ensure that workers are paid fairly.
And there's many, many cases where US workers were replaced by H-1B workers.
The companies are using a contracting firm, bringing in H-1B workers and replacing the US workers with them and forcing the US workers to train the workers who are going to replace them.
That needs to be fixed.
There's many things in the program that need to be fixed and the many legitimate criticisms about the program.
However, the $100,000 fee will not fix what's wrong with the H-1B program.
It is a misguided, haphazard sort of way to do things.
There are other proposals that the Trump administration has talked about doing, and there's one that they've also proposed.
That is separate from this, but it's mentioned in the same proclamation.
And those would be more substantive reforms.
And we've heard from big names like Elon Musk and Google's Sundar Pichai, who both began their US careers on H-1B visas, saying this policy undercuts America's ability to attract talent.
Yeah, the H-1B program is a very important pathway to bring skilled and talented workers to the U.S.
There's no question about that.
Unfortunately, it's been hijacked by many companies that are using it to pay workers less and to bring in entry-level type jobs or to fill entry-level type jobs.
So some real reform needs to happen.
There have been bipartisan proposals in Congress for many years to fix the program, but the tech industry has mostly been against it because they like the way that they're able to use the program.
And what happens next now, legally and politically?
Could the Chamber of Commerce realistically block this policy in court, or will they just, you know, delay it?
Well, there are multiple lawsuits now.
There's the Chamber of Commerce lawsuit.
There's another one, that group of organizations labor organizations and universities that are also challenging the fee.
So there's probably a good chance that that the fee could be stopped at least temporarily in the courts, just based on how haphazardly and quickly it was done, and with almost no notice.
Daniel Costa, Director of Immigration Law and Policy Research at Economic Policy Institute there.
Well, let's head now to South Africa, where gambling has become one of the country's fastest growing industries, with a record 80 billion turnover in the last financial year.
And that's despite the country's ongoing economic challenges.
But whilst the sector is booming, there are concerns over the long-term social and economic consequences, particularly with addiction and debt.
Lungile Dekwana, acting CEO of South Africa's National Gambling Board, spoke to the BBC's Krupa Paddy.
There has been a shift in terms of our gambling trends if you look from the COVID times, where we saw a rise in the online gambling space basically people shifting from doing the physical visionals to casino.
Those games in some of the instances have become to be very much online.
Then it means that there's a lot of access to those gambling spaces than it would have been before.
And I think that part of it that is complicating it further is that the legislative element of that, I think, is busy trying to catch up to that development.
But people also in South Africa.
Maybe the culture that we're beginning to see is where people take gambling as a source of income rather than a recreational activity.
That's the challenge.
What is the existing framework at the moment around gambling, the legal framework?
It's called the National Gambling Act of 2004.
Now, obviously, as you can hear the year, it means that there is a need for us to review that.
Of course, experts.
Many of them are concerned about gambling addiction debt, mental health challenges.
What are you seeing and what's your reaction?
From our own surveys that we have done.
What we realized, for example, is what we call the gambling problem.
It has increased.
It's now sitting at around 31%.
So it is a problem that is there and it's a challenge that we're actually facing.
Well, let's talk some tech now.
Graphics processing units, GPUs for short, are those supercharged chips that power AI.
The bigger the model, the more GPUs you need.
But unless you're a tech giant, that kind of computing muscle is seriously expensive.
And so California is stepping in with Carl Compute, which is a public GPU cluster to help startups and researchers get in the game.
Megan McCarty Carino from our American partner Marketplace has more on the push for AI computing.
The Computer History Museum in Silicon Valley takes you through 2000 years of computing history, from the abacus to the iPhone.
Curator Mark Weber gives me a tour of the machines that remade modern life.
This is mainframes, the IBM 360.
This little spool of paper tape with holes in it is the origin of Microsoft.
He says the history of computing isn't just the story of the scrappy startups that became household names, but of cross-pollination between industry, government and universities.
In my mind, I see them all as complementary.
It's kind of an ecosystem where you need all the parts to make it work.
But lately, that diverse ecosystem has been breaking down.
Only a few private companies can now afford to develop and study the biggest, most advanced artificial intelligence models.
There's a lot of raw potential that sits out there right now to have incredible scientific breakthroughs if we were able to resource appropriately.
Russell Wald is the executive director of the Stanford Institute for Human-Centered AI.
He says, even the best-resourced universities typically only have access to a few hundred advanced GPUs, not the hundreds of thousands held by big tech.
If it's only five companies that are just the sole vanguards of truth in this space, you're not going to get that curiosity-driven type of research.
The big kind of breakthroughs that aren't profit-driven, like global positioning systems, MRI testing and the internet, which all came out of publicly funded academic research.
And then there's the kind of stuff industry might not want the public to know.
Think tobacco companies and cancer, or fossil fuels and climate change, says Stella Biederman of the nonprofit Eleuther AI.
There's a really big potential for really bad things to happen.
Maybe they know these things, maybe they don't, but they definitely don't share it with the world.
She says all commercial frontier AI models are closed to some extent so you can't get under the hood to run experiments.
Like, how do you prevent a model from giving users bioweapon instructions?
To study that, Luther AI built its own models from the ground up.
I am a very strong believer in independent research that doesn't require buy-in, assistance or funding from these powerful tech companies.
That's where public compute could come in.
Hanna-Haji Shirzi is a computer science professor at the University of Washington who works with the nonprofit Allen Institute for AI to build totally open data sets and models that researchers can experiment with.
It would be very good if it is not just accessible by a few nonprofit companies or only a few universities, because a lot of these questions could be solved together as a community effort.
The institute has partnered with the National AI Research Resource, which is piloting a system to provide access to government GPUs.
But even most federal supercomputers aren't optimized for cutting-edge AI.
Ajit Shirzi says we need to build new public infrastructure and likely subsidize commercial providers.
It's a model that was common at one time, says Mark Weber at the Computer History Museum, back when we were in a different kind of tech race.
This is one workstation, one terminal, because these were designed, it was a whole system to see Soviet bombers coming over the pole or coming toward the United States.
This is giving me like Dr. Strangelove vibes.
It's totally, and that stuff was real.
During the Cold War, government urgency and funding helped launch the computer age.
Some researchers say we'll need it again to thrive in the AI one.
Marketplace Megan McCarty Carina reporting there.
And that's it from World Business Report.
On behalf of the production team here in Salford, thank you for listening.
America is changing, and so is the world.
But what's happening in America isn't just a cause of global upheaval.
It's also a symptom of disruption that's happening everywhere.
I'm Asma Khalid in Washington, D.C.
I'm Tristan Redman in London, and this is The Global Story.
Every weekday, we'll bring you a story from this intersection, where the world and America meet.
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