For rural America in decline—those small towns of shuttered factories, sawmills, and schools—outdoor recreation is the new hope. Smokestack-chasing is out, the public is told. A diversified economy based on environmental protection is in.

Last month, the Biden Administration relaunched an outdoor recreation council and promised to expand the industry to “help people thrive across rural America.” But reviving a struggling town isn’t a simple task.

In rural Appalachia, structural forces have left much of the region behind as economic and political power shifts to the Sun Belt. Yet, the decline isn’t terminal or guaranteed. 

Locals have two options: They can repeat the foolishness of the past by putting hope in utopian promises for one giant industry to save them; or, they can build up local leadership to make communities more livable and organically grow a variety of existing businesses.

Though one approach won’t work everywhere, hope abounds in small experiments. The leading lights will not be federal officials or state politicians; instead, what’s needed is locals who use the assets they have—and run with them to build the future. 

Outdoor recreation isn’t the only answer for the region. But, for a number of rural places, it seems to be a viable option. Hiking, skiing, critter-watching, hunting, and generally exploring one’s no-wifi backyard can grow local economies and offer manufacturing potential, along with high-value services.

States like Pennsylvania are betting big on outdoor recreation. The commonwealth’s head of the Department of Conservation and Natural Resources (DCNR) has declared outdoor recreation a “lottery ticket” that’s “bigger than gas, bigger than a lot of industries combined.” The praise is now policy: DCNR has been reluctant to lease more public land for natural gas development, worried that it could undermine outdoor recreation.

In October, Pennsylvania Gov. Josh Shapiro announced $53 million for hundreds of outdoor recreation projects after he launched an Office of Outdoor Recreation in August.

“I want the people here to know that when I think about the future of Pennsylvania and its competitiveness,” Shapiro said at the popular Kinzua Bridge State Park in McKean County last fall. Officials estimate that outdoor recreation will bring in about $14 billion for the state. Expanding the industry also offers some advantages, like lower overhead costs.

“We see outdoor recreation as the key to the competitiveness of our rural areas,” said Nathan Reigner, Pennsylvania Director of Outdoor Recreation. “As we stimulate advanced and innovative businesses in rural areas—which are great places to have an innovative business—we need to attract and retain highly mobile, highly competitive workers in those places.”

The testing ground for the outdoor recreation revolution is the Pennsylvania Wilds, a 13-county region in the north-central part of the state. The Wilds bills itself as “one of the largest expanses of green between New York City and Chicago.” There, communities like Ridgway in Elk County and Kane in McKean County have encouraged outdoor recreation for economic growth and quality of life improvements to keep young people in the area.

“We’re not running out of jobs—we’re running out of people,” said Sam MacDonald, president of the Elk County Catholic School System and a former Ridgway borough councilman. “What economic development really needs here is improving the town enough so people will want to move here or move back, not move away.”

After a stint in Washington D.C., MacDonald returned to Ridgway to raise his family. But now, repeating his path may be difficult for millennials and Generation Z due to a housing supply crunch. Few new houses get built, and not enough existing ones get renovated. 

MacDonald and Reigner share the same vision: making rural areas attractive to visitors starts with making them good for locals.

Tourists come to Ridgway for kayaking and fishing in the Clarion River and its annual Chainsaw Carvers Rendezvous. “When I was a kid here, the Clarion River was a cesspool,” MacDonald said. “There wasn’t a fish in the world that could live in the Clarion River…today, it’s a world-class trout stream.” 

The river becoming a tourist attraction wasn’t necessarily the goal, even if that’s the argument used to make it a priority.

“In order to clean up the river, sometimes you have to say ‘this is for tourism and economic development,'” MacDonald said. “If somebody comes here from London to go fishing, that’s fine. The bigger upside was cleaning it up makes it a better place to live—I don’t give a shit if it’s a better place to visit.”

Though he’s an outdoor recreation booster, MacDonald also calls himself an enormous skeptic—because there’s a tendency to exaggerate the sector’s benefits. 

When he served on the borough council, some locals wanted to expand all-terrain vehicle (ATV) trails. But Ridgway as a four-wheeler destination is an awkward fit. Pennsylvania Department of Transportation controls all roads in and out of town (and isn’t shy of fining the ATV riders caught on state roads). The land that surrounds it is controlled by the Pennsylvania Game Commission, which “absolutely hates ATVs,” MacDonald said.

But devoted riders showed up to local meetings to make a push for ATV trails anyway, promising economic development. An ATV partisan who led the local chamber of commerce said seven businesses were ready to open—if only the town opened the streets to ATVs. But he refused to say what the businesses were.

“This went on for a year,” MacDonald explained. “Another borough council member told the chamber, ‘We need that list’ … Magically, two days later, they came and said, ‘there’s 37 businesses that are opening.’ I said, ’37 businesses? What kind of business—what are you talking about?'”

The ATV booster finally revealed one potential: a pickle store. “How many goddamn pickles do these people eat?!” MacDonald asked.

The ATV experiment never came to pass, nor did any of the promised businesses.

In McKean County, 20 miles north of Ridgway, leaders in the town of Kane talk about a renaissance, much of it based on outdoor recreation and boomerangs—the young people who left the area and returned to raise a family. Kane has recreational bike trails, proximity to Kinzua Bridge State Park, and easy access to the Allegheny National Forest—the only federally owned forest in the Commonwealth. 

Local leaders credit collaboration for their new growth. They hold monthly coffee meetings (called SPARKS) with political, business, school, and community leaders. They talk about the grants for which they’re applying, new initiatives that need support, and delegate responsibility for tackling problems.

“We’ve been able to look at small issues and larger issues and fix some things,” Mayor Brandy Schimp said.

Take the rural doctor shortage. When the University of Pittsburgh Medical Center Kane recruits a doctor, Kane Area Regional Development Director Kate Kennedy gives them a tour of the town, and then others join for dinner to convince the doctor to accept the job. Health care gaps won’t disappear with a personal touch, but for small towns, an extra health care worker or two can make waves.

Projects like painting a city mural, installing bike racks, and planning a large homecoming celebration all build toward the future. “Active and attractive communities attract people,” Schimp explained.

Getting locals engaged starts at an early age. For more than a decade, the town hosts Kare for Kane every May, a mass volunteer effort for children and adults. In its best year, more than 600 people participated—in a town of 3,200.

“What we try to do with kids is create that sense of ownership and pride in your community, and that is really, really important to these rural areas,” Schimp said. “If they don’t feel connected to your community, what are you doing all this work for?”

Kane’s success depends on its people, which makes it hard to copy.

“People come in here without egos,” Schimp said. “Kate and I have been approached by several different communities to share the SPARKS approach, and we can typically tell within five minutes of being in the room whether what we say is going to matter to them. If people aren’t coming in with an open mind…you’re just not going to see the successes.”

The plan for the future is to make Kane a hub for arts and culture, aided by state grants and other initiatives. “We’re shifting Kane from a gateway to a destination,” Schimp said. Work is in progress to build a children’s museum—an attraction that’s not dependent on good weather like state parks.

For outdoor attractions, the Pennsylvania Wilds region benefits from so much state game land and the Allegheny National Forest. Other parts of rural Pennsylvania and Appalachia may not be able to copy the playbook, but the Wilds gives some hope.

The Wilds also hasn’t seen a complete economic collapse; manufacturing remains strong. Places where outdoor recreation is seen as the last hope tend to struggle.

“The places where it works well is where there’s already a diversified economy,” said Bynum Boley of the University of Georgia and director of its Tourism Research Lab. “So people aren’t latching on to outdoor recreation as a savior.” 

Transformation doesn’t simply come; outdoor recreation may be an improvement, but it’s not a godsend.

“Communities that used to be resource extraction communities…a lot of times these rural areas are left with not many other options,” Boley said. “When you don’t have any other options, you can get pushed around a little bit more by the tourist dollar.”

Outdoor recreation might be better understood as signaling what places are viable. Bike trails and watersports won’t save every township. With a region in decline and a shrinking, aging population, leaders might have to make hard decisions about saving two places rather than fail to save eight.

Rejuvenating those spots, though, will mean getting rid of government roadblocks. From building houses to issuing nursing licenses to environmental permits, Pennsylvania takes months longer than other states. The story is the same for outdoor recreation.

“‘No’ is no longer an acceptable response; it is ‘how do we work to come to a fair assessment?'” said Rep. Mike Armanini, who represents Elk County and part of Clearfield County. “There are still a lot of regulations that we need to address…. In Pennsylvania, it is so unfriendly and it’s a long and painstaking process if you want to move forward with industry. It just really bogs down growth.”

He noted frustrations with state agencies like the Fish and Boat Commission, which has been reluctant to let e-bikes on its lands. Infrastructure upgrades in rural areas can be tough, too: state-owned lands deprive townships and municipalities of the tax revenue to fund them. “These entities, they need to reinvest in (the localities),” Armanini said.

State agencies aren’t only roadblocks, of course. Armanini was quick to point out that the Department of Conservation and Natural Resources has been helpful with ATV trails. Yet the constellation of chokepoints can jeopardize big projects, and the wait time to get cross-agency approval can kill them.

“The key is, how do we take advantage of everything without taking shortcuts and truly making sure that we look at every nook and cranny,” Armanini said. “But for all that to happen, it takes your [Department of Environmental Protection], it takes all your agencies and commissions to sit down and have to work together…you have to have good leadership.”

Until something breaks, local leaders may be on their own. “As legislators not truly working together, we’re hurting ourselves, which is hurting Pennsylvania,” Armanini said. “It’s unbelievable how bad it is.”

Revival efforts in places like Kane also matter because they have secondary effects: they spur competition. “The last five years, things are bustling up here,” said Cheryl Ruffner of the Elk County Riders, a local ATV group. Beyond Kane, projects in Ridgway, St. Marys, Johnsonburg, and nearby townships are blooming. “I see all this hustling and bustling all over the place … it’s all starting to brew.”

Kane Mayor Brandy Schimp, “she’s got fire,” Ruffner said. “I really think Kane was one of those things like ‘they’re revitalizing—why shouldn’t we?'”

Though much is new and uncharted, expanding outdoor recreation in Appalachia has some potential. The region isn’t doomed. State officials, perhaps too optimistic, are at least wary of selling the industry as the only fix.

“When it comes to economic and community development, outdoor recreation is a piece of the puzzle,” said Reigner, Pennsylvania’s outdoor recreation director. “Think about making a stew: That stew’s gonna have a couple of main ingredients. Maybe beef and potatoes and carrots. Outdoor recreation is the salt in the stew of economic development. It may not be the main ingredient, but if we prepare that dish without it, it’s gonna be bland and nobody’s gonna ask for seconds.”

Reigner’s metaphor raises a problem. Outdoor recreation may attract people to a rural area. But it’s hard to pull in tech workers or keep young people when the internet is shoddy and access to health care an hour’s drive away.

Instead of chasing megaprojects like hydrogen hubs, making rural infrastructure better could have a better long-term payoff. Strengthening the basics is also more replicable than competing with other areas for one-off projects. 

“We want to reimagine rural,” Mayor Schimp said. Coordination problems, infrastructure issues, and population loss plague many Appalachian counties. But better marketing of rural areas could go a long way. 

Rural places, after all, can be a destination as much as cities. Gov. Shapiro said roads could “lead right through rural communities” when he thinks about the future of Pennsylvania. But that rubbed some people the wrong way. 

An entrepreneurial spirit, a shift in thinking about economic development, and outdoor recreation could help some small towns be at the end of that road—not just a place to drive through.

The post Will Outdoor Recreation Save Appalachia appeared first on Reason.com.

In the early stages of the COVID-19 pandemic, there was a series of overreactions about the viability of global value chains (GVCs), with some mixed feeling about China.

Many claimed that the pandemic would mark the end of GVCs and that there would be a massive ‘reshoring’, with production pulled back from developing to developed countries. Others claimed that GVCs needed broadening to boost resilience and that companies should avoid concentrating their operations in one location such as China.

But GVCs have mostly remained intact over the past year, with more intensive use of communications technology.

The initial reactions were partially due to an insufficient understanding of the multiple shocks generated by COVID-19. Health policies — including lockdowns and other social distancing measures— created three kinds of shocks to GVCs: negative supply shocks, positive demand shocks and negative demand shocks. These shocks have emerged in different places at different times and have confused observers.

For countries other than China, the first impact of COVID-19 was negative supply shocks. In February 2020, imports from China — both parts and components, and final products — suddenly stopped. But as China successfully contained the virus, import supply was quickly restored. As COVID-19 spread to other countries, lockdowns and other measures caused negative supply shocks, though the effects were minor and temporary in East Asia.

In many countries, there were initial positive demand shocks for personal protective equipment (PPE), and countries importing such goods experienced panic around sudden spikes in demand. Some countries introduced export restrictions on PPE and other ‘essential’ goods to prioritise domestic demand, without regard to the credibility of the rules-based trade regime. But after the initial shock, things calmed down and the market ensured stable supplies of most goods — except vaccines.

COVID-19 also generated positive demand shocks for telework and stay-at-home-related goods. Sales of laptops, communication-related equipment, dishwashing machines and water purifiers boomed. East Asian exports to North America and Europe recovered primarily due to these positive demand shocks.

A third impact of COVID-19 was negative demand shocks. Lockdowns and social distancing, businesses closing and income losses reduced the demand for a wide range of goods and services. The slump in GDP was felt all over the world. But unlike the global financial crisis in 2008–09, many countries implemented mitigation policies on an unprecedented scale. So, there was no collapse of the financial sector and asset markets, and consumer purchasing power held up.

The trough of international trade was much shallower than that of GDP, both of which largely bottomed out across the world in May 2020. While particular sectors such as the garment industry, transportation, tourism and on-site services have suffered serious damage, major reshuffling of GVCs seems unlikely.

Initial concern about GVC viability was fuelled by overreaction to the initial negative supply shocks and positive demand shocks, and anxiety about China. But private companies remained calm. They had already optimised the balance between efficiency and risk management before COVID-19. They knew that negative supply shocks would be temporary, positive demand shocks might create business chances and negative demand shocks needed to be watched carefully to gauge their depth and length.

The world has not observed any massive reshoring or relocation of production operations. Machinery international production networks — characterised as a task-by-task international division of labour — have been more robust and resilient than other types of transactions as they proved to be in past crises including the GFC and the East Japan Earthquake.

To what extent did US–China decoupling already under way affect decision-making for GVCs during COVID-19?

For Japanese companies, to take one example, China is attractive for production sites and markets. But China is also prone to sudden politically driven policy changes. So, Japan’s China Plus One strategy to extend its GVCs has been in place since 2010 when disputes over the Senkaku (Diaoyu) Islands began to escalate. Labour-intensive operations started moving earlier in response to labour cost pressures and some quiet reallocation of production occurred in response to the US–China tariff war. COVID-19 aggravated the conflict and accelerated decoupling. That trend continued. However, most operations in China remain as they were.

The limited exceptions are companies with sensitive technologies that require semiconductors or sensitive materials such as rare metals, as well as companies producing PPE. Some of these re-shored and others moved part of their production from China to other countries. Japan’s Ministry of Economy, Trade and Industry provided two subsidy programs in 2020–21 for supply chains targeting these products. One was for reshoring and the other for diversification, mainly to ASEAN countries. Whether a policy tool such as a subsidy is optimal or not can be arguable, but the two programs were well accepted among Japanese companies.

The US–China confrontation has morphed from trade issues into great power competition. Countries such as Japan and South Korea heavily depend on a national security system underpinned by the United States and have an incentive to behave as good allies. Careful assessment of the extent of decoupling in terms of the types of technologies, products, and firm nationalities will be crucial in the coming years.

Further extension and deepening of international production networks are desirable for enhancing resilience. India’s participation in these would have helped do that so its decision to walk out of Regional Comprehensive Economic Partnership negotiations was unfortunate. By improving the investment climate and enhancing connectivity, South Asia could also participate in tightly connected East Asian production networks and thereby achieve more rapid economic growth and poverty alleviation.

Fukunari Kimura is Professor in the Faculty of Economics at Keio University and Chief Economist at the Economic Research Institute for ASEAN and East Asia (ERIA).

This article appears in the most recent edition of East Asia Forum Quarterly, ‘Reinventing global trade’, Vol. 13, No. 2.

The post COVID-19 won’t rattle East Asian supply chains first appeared on East Asia Forum.

When conceived, one of the primary motivators of Aadhaar was the need for a unique identifier to enable more effective targeting welfare benefits. Then, state and central governments in India were grappling with the problem of egregious inclusion errors – duplicate and non-existent beneficiaries for various schemes, especially the Public Distribution System (PDS). Aadhaar was thought to be the solution to this problem.

And it cannot be denied that Aadhaar has nearly eliminated the issue of duplicate or bogus (the person itself not alive or existent) through enrolment and physical screening. However, sceptics argued that in the process of Aadhaar screening, significant numbers of eligible poor would be screened out, as a collateral damage. But it was thought that over time – as technology improved, databases got cleaned up, stakeholders got used to it, and redressal mechanisms were streamlined – this problem of exclusion errors would disappear. Unfortunately, that has not proved to be reality.

The real problem lies in the use of Aadhaar in the targeting of beneficiaries, especially through screening them out by linking multiple databases. It was all along known, though not explicitly acknowledged and clarified by all concerned (including the government), that beyond elimination of duplicates and non-existent beneficiaries, in the Indian context Aadhaar’s role in targeting was limited.

The supporters of Aadhaar argued that, apart from the duplicates and the non-existent, it could provide the accurate unique identifier that can help link multiple databases on employment, vehicle registration, tax payments, electricity consumption, bank loans and so on. This, it was claimed, could be a game changer in targeting social benefits. 

The problem with this argument/claim lies in the quality of the validating databases. Apart from 10-20% of Indians who are either employed, or own vehicles, or have taken loans, or purchased property, the vast majority have no formal signatures of their existence. In other words, at least 80% of Indians have no formal database on which they exist reliably so as to be used for Aadhaar-based validation. 

In this scenario, the government ends up using various questionable datasets for Aadhaar screening. Governments also force people into various formal database inclusion requirements so as to generate digital trails for subsequent Aadhaar validation. 

Most importantly, since their primary objective is to eliminate inclusion errors, none of the various software applications of state and central governments to enrol and process welfare schemes do not have  the requisite safeguards to prevent egregious exclusion errors. This is a manifestation of the inclusion errors elimination bias within governments. I blogged about it here. 

Finally, and surprisingly, technology itself has not held up well and has been a major contributor to the problems with Aadhaar implementation. The apparently simple activity of biometric validation – biometric capture, validation with Aadhaar database, and the data communication – has its struggles, especially but not only in the rural areas of the country.

The consequences of all these efforts to use Aadhaar in welfare services delivery end up doing great damage, often more than offsetting their beneficial effects. 

A recent article in the Indian Express points to the problems with Aadhaar-linked validation on accessing PDS and other welfare schemes benefits. It reproduces the salient findings of a Lokniti-CSDS Survey conducted during the 2019 LS elections.

And the denials rates were very bad in the Bimaru states,

The global economy is facing both COVID-19 and major power geopolitical competition. US–China rivalry could split the global market in two. The Biden administration is reigniting hopes of the future of multilateralism and a resumption of US leadership in the rules-based trade order.

But Trump’s four years in office changed the political underpinnings of US foreign economic policy. The rise of populism and protectionism alongside partisan politics may have undermined the base for a return to the free trade policy approach of previous administrations.

Biden has declared his government will focus on a middle class-centred foreign policy and a trade policy that will serve the American workers’ interests by promoting equitable growth. Though the Trump administration planned a ‘new Cold War’ with China, the Biden administration won’t necessarily follow the same approach, instead concentrating on trying to compete with China by outperforming it.

China has chosen a different trade strategy from the increasingly inward-looking economic policies of the United States. In response to Trump’s trade war, China announced a succession of unilateral measures to open up trade and investment. Foreign investment in China has subsequently increased significantly.

China and 14 other countries in the Asia Pacific successfully negotiated the Regional Comprehensive Economic Partnership (RCEP) in November 2020. With its ratification and implementation, intra-regional trade will grow and the region is likely to become the world’s largest free trade area. In December 2020, Chinese and EU leaders announced the completion of negotiations on the EU–China Comprehensive Investment Agreement, that they expect sign this year. Chinese leaders have also declared their active intent to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

In the midst of US–China geopolitical competition, China has continued to accelerate trade and investment liberalisation, driven by both security considerations and its domestic reform agenda. The question is whether these Chinese strategies can help revitalise the rules-based international trading system and push back against global economic fragmentation.

China has opted for strategies that continue to open up its markets and to integrate its economy with those in Asia and the Pacific and Europe, despite the momentum there has been against globalisation in the United States. China’s commitment to RCEP, the European investment agreement and to seeking higher standard agreements opens a path for progress with partners including the United States to strengthen the global trade regime.

China is now the largest trading partner of almost all Asia Pacific countries. Trade between China and Europe has surpassed that between the United States and Europe. This economic interdependence helps to alleviate global tensions and potentially buttresses the open international trading system.

RCEP will facilitate more open, free and transparent trade in the region. The total number of goods traded under zero tariffs will exceed 90 per cent. Commitments to liberalising trade in services covers most service sectors and are more significant than previous agreements between ASEAN and other parties. The participants have adopted negative list approach to foreign investment in manufacturing, agriculture, forestry, fisheries, mining and other sectors, and the transparency of policies has significantly improved.

The EU–China Comprehensive Investment Agreement will promote China’s institutional opening-up. It marks the first time that China has made commitments in the form of a negative list in all sectors — in both services and non-services — and also requires full implementation of the negative list system for foreign investment under China’s Foreign Investment Law.

China and the European Union have reached consensus on competition issues related to business operations, including state-owned enterprises, subsidies, technology transfers, standards-setting, administrative law enforcement and financial regulation. The agreement has special provisions on environmental and labour issues related to investment, contributing to the effort to achieve the UN Sustainable Development Goals and protecting the environmental and labour rights. These commitments make China a more attractive business destination and international partner.

Together these two agreements signal significant change to China’s business environment and investment and trade management system. They bring domestic standards closer to the international bar and deliver more openness in the global economy. They serve as a model to some extent for negotiations for other emerging economies in the multilateral system, making compromise and progress more likely in future WTO reform.

In China, this is all part of a strategy to promote ‘dual circulation’, which stresses the domestic market for economic growth but also builds in international openness and connection to global markets. This model is a defensive response to growing uncertainties in the trade regime.

As a force for economic globalisation and an active contributor to the global trade system, Beijing is looking to the Biden administration for a positive response. As the world’s two largest economies, China and the United States share a common responsibility to build and strengthen the international trade rules.

Wang Yong is Professor in the School of the School of International Studies, Director of the Center for American Studies and Director of the Center for International Political Economy at Peking University.

The post Can China’s new trade strategy hit the right buttons in Washington? first appeared on East Asia Forum.

Black-owned and bartender-owned, Equiano is a nuanced and dynamic spirit in more ways than one—we spoke to founders Ian Burrell and Aaisha Dadral.

A report by DAN Q. DAO for Saveur.

“We wanted to get some conversation flowing. We wanted people to start asking: Why shouldn’t a rum sit side-by-side with a top bourbon, a single malt whiskey, an amazing rye, some really good aged tequila, or Cognac?” Ian Burrell says, with a sense of confidence. “Because that’s what I want people to look at—the rum category. For me, it’s bigger than any one brand. Equiano meant to elevate the whole category.”

Burrell should know a thing or two about this mission: He’s a household name in the spirits industry, founder of the world’s first-ever rum festival (which started way back in 2003), and a multi-award-winning global rum ambassador. And though Equiano only launched in 2020, it’s fair to say Burrell hasn’t just elevated the category—he’s reimagined it entirely in his own image. “My ethnicity here in the United Kingdom is African Caribbean,” he explains. Equiano Rum, as such, is the first African Caribbean rum.

Equiano starts in Mauritius, a small island nation in the Indian Ocean, at the pioneering Grays Distillery, which produces a traditional molasses rum aged in French Limousin oak barrels—including ex-Cognac barrels—for a minimum of 10 years. That liquid is then sent halfway around the world to Barbados’ Foursquare Distillery, where it’s blended with a Caribbean counterpart that’s been aged in American oak ex-bourbon casks.

The result? A rocks-friendly, chestnut-colored spirit that nods to its transatlantic origins, boasting aromas of baking spice and notes of stone fruit and familiar toasted oak, along with Foursquare’s signature buttery quality.

The release comes at an opportune time for rum—industry publication The Spirits Business reports that “rum has shown a certain level of resilience during the pandemic,” noting that sales of the cane spirit actually increased 38 percent between April and June 2020 compared to the same three-month period the previous year. At a little less than $60 a bottle, Equiano falls squarely into rum’s premium segment, which has seen exciting developments in recent years with releases ranging from Nicaragua’s Flor de Caña 25 Year and San Diego’s Cutwater Barrel-Aged Rum to the Bacardí Group’s Gran Reserva line and the Facundo brand.

“Premium, super-premium; these have always been marketing terms to me,” Ian Burrell asserts. “I always like to flip it and say that any rum can be premium if it’s made at a premium. The unfortunate thing with the rum category is that some [producers] feel that they have to add loads of sugar and spices and flavors to their products to make them more sippable. That doesn’t mean there aren’t amazing spiced rums. But we just wanted to create a rum that was still all-natural, that you could sip by itself, with a couple pieces of ice.”

Burrell is joined on the project by several co-creators, including Foursquare’s Richard Seale, Oli Bartlam, Amanda Kakembo, and Aaisha Dadral, founder of the branding studio crave. Indeed, Equiano isn’t significant just for its boundary-defying liquid, but also for its message and packaging, which eschew kitsch and reflect the team’s nuanced understanding of cultural representation. In an era where thoughtful branding should be a given—not an afterthought—it’s refreshing to see.

“Everything we do is really quite different from how most people approach not just the rum category, but spirits in general,” Dadral says. “[Equiano] feels different from other rum bottles—we don’t have a paper label, we don’t say we’re tropical, and we don’t have ships and sea beasts on our bottle.”

But Equiano Rum has no need to loudly proclaim its provenance or island bona fides. The story is right there in its name. Born in 1745 in Nigeria, the brand’s namesake, Olaudah Equiano was sold into slavery at just 11 years old—eventually landing in the Caribbean and then the United Kingdom, where he sold rum to save up for his liberation. Traveling the world as a free man and abolitionist, he would later pen a highly influential autobiography as one of the first published African writers in British history.

Olaudah Equiano’s personal history is intertwined with the very origin of rum, which is believed to have been popularized during the British maritime colonial period. Yet, Burrell says, the effects of this colonial past still linger today in the production of sugarcane—and thus rum—in the Caribbean’s former British colonies. During the 1800s, ongoing Anglo-French wars disrupted much of the sugar trade, spelling disaster for local refineries.

“Barbados has always been part of this colonial tug-of-war,” says Burrell, explaining that European politics frequently crippled colonial industries. “Just to put it in perspective, there were 200 sugar refineries in Guyana at the turn of the 19th century; now there are four. In Jamaica, there were nearly 100 or so sugar refineries. Now there are three. There’s only one in Barbados.”

Yet, Equiano Rum is a model for how rum brands can give back and work with distillers who are invested in local communities. Burrell notes that Foursquare, one of the fastest growing spirits companies in the world, has only been able to start growing its own sugarcane because of the brand’s success.

“We’re seeing a change. Distilleries and owners in Barbados, and in Jamaica, are starting to grow [sugarcane] again, but it’s slightly different from mezcal or tequila, where you can grow everything in a particular area,” Burrell says. Rum’s commercial success will be integral in reintroducing sugarcane production to the Caribbean. “We need to sell more rum to go back to growing sugarcane to make more rum to invest back into the community.”

In the spirit of giving back, Equiano donates 5 percent of its global profits, plus $2 from every bottle sold through the company’s website, to an organization dedicated to freedom and equality. This year, the choice is Anti-Slavery International—the oldest international human rights organization in the world.

“We can help generate funding and income for an organization like Anti-Slavery International, and we’ll benefit from them by learning about what they do, so we can actually help make the world better,” Burrell says. “It’s one of the first things I said: If I get involved with a brand, I want to be able to use my position to actually help out. That’s something we all agreed on even before we had the name, even before we had the liquid.”

In March 2021, Japan marked ten years since the 3/11 Great East Japan Earthquake and the Fukushima nuclear disaster. All nuclear power plants in Japan were stopped and only a handful have been restarted after meeting new and more stringent nuclear safety standards. This has led to a significant loss of baseload power, which has largely been compensated by natural gas and coal. Since Japan has no domestic fossil fuel resources, its energy self-sufficiency ratio dropped to the lowest among OECD economies. As an island nation, Japan does not have pipeline or grid connections with neighbouring countries. All of this exposes Japan to higher geopolitical risk.

At the same time, addressing climate change is becoming increasingly urgent. But due to its already high energy efficiency performance, Japan’s marginal abatement cost for reducing greenhouse gas (GHG) emissions is much higher compared to other countries. Japan’s industrial electricity tariff is already very high, with rates 1.5–2 times larger than the United States, China and South Korea.

Taken together, Japan is the only country facing the so-called fourfold challenges: a lack of domestic resources, high dependence on the Middle East, high energy costs and high costs to further cut its GHG emissions.

In 2015, Japan put forward its nationally determined contribution (NDC) under the Paris Agreement, aiming at a 26 per cent reduction of GHG emissions from 2013 levels by 2020. This target was underpinned by an energy mix of 44 per cent non-fossil fuels (22–24 per cent from renewable, 20–22 per cent from nuclear) out of total power generation.

This energy mix was worked out to fulfil three requirements: restoring energy self-sufficiency to the pre-3/11 level of around 25 per cent, lowering electricity costs and setting a GHG reduction goal comparable with other developed countries. Japan’s NDC was designed so that fossil fuel import costs could be reduced by restarting nuclear power plants and increasing renewable energy, thus absorbing the expansion of FIT (feed-in-tariff) costs.

Progress towards these targets is mixed. On the one hand, the share of renewable energy has substantially expanded thanks to generous FITs, but subsidy costs have mushroomed as well. On the other hand, restarting nuclear power plants has been slow. Out of 50 nuclear reactors, only nine have been restarted. If nuclear power stagnates and Japan still intends to achieve its NDC, its share of renewables needs to be further expanded, which will inevitably increase the already heavy FIT costs. Higher electricity prices would also reduce the international competitiveness of Japanese manufacturing.

In October, Prime Minister Yoshihide Suga announced Japan’s 2050 carbon neutrality goal, joining more than a hundred countries that have done so as of March 2021. Under the Paris Agreement, countries are increasingly under pressure to announce their 2050 carbon neutrality goals and upgrade their NDCs for 2030. Japan’s Ministry of Economy, Trade and Industry (METI) put forward the Green Growth Strategy as a blueprint for achieving the above goals. The strategy suggests decarbonisation of the power sector through a mix of renewables (50–60 per cent), nuclear and thermal plus carbon capture (30–40 per cent) and hydrogen (10 per cent).

It also emphasises the role of offshore wind, with introductory generation targets of 10GW by 2030 and 30–45 GW by 2040. Offshore wind looks promising and should certainly be explored, but Japan’s wind geography is not as fortuitous as some regions, such as the North Sea which has a 20 per cent higher annual utilisation ratio. Upward revisions of the NDC counting on offshore wind will inevitably lead to even higher electricity prices. While Japan has abundant geothermal resources, not all can be utilised since many are located in national parks under stringent restrictions on development.

Japan is now in the process of formulating its 6th Strategic Energy Plan. All of the above will inevitably influence this process and lead to revisions of the current NDC. Japan will likely refine its plan further as a participant at a US-hosted climate summit this month.

Japanese energy policy debates after 3/11 have been distorted by a dichotomous argument between renewables or nuclear. Reality calls for a more pragmatic approach that incorporates both and makes use of their respective advantages. Together with renewables, Japan should accelerate the restart of nuclear power plants in the short- to mid-term. Construction of new and more advanced nuclear plants should be an option for the 2050 carbon neutrality plan. It is also crucial to preserve and develop Japan’s nuclear power technologies and respective human resources.

There is no doubt that stricter safety regulations increase the costs of nuclear energy. Still, a significant volume of stable zero-emission power supply is a powerful tool to achieve decarbonisation. Nuclear energy also does not face the same system integration costs as renewables.

There is no perfect energy setup. Japan’s reality does not allow it to count on one or another energy source while ruling out other options. Seeking the best diversified mix is the right answer, and it is time for Japan to return to this pragmatism in its energy debate.

Jun Arima is Professor at the Graduate School of Public Policy, the University of Tokyo. He is a former Japanese official and chief negotiator to the United Nations Framework Convention on Climate Change.

The post Reclaiming pragmatism in Japan’s energy policy first appeared on East Asia Forum.