Thread by @DurRobert

Shocking paper about the industry that handles over 80% of global goods trade: the maritime shipping industry: papers.ssrn.com/sol3/papers.cf… by Guillaume Vuillemey

The paper documents what happens to "end-of-life ships"...

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"almost all ships globally are dismantled in poor environmental conditions after being “beached” on the shores of Bangladesh, India or Pakistan"

Moreover, "a fast-growing number of shipping companies use “last-voyage flags”...

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... most likely in an attempt to hide such dirty practices: ships are sold to a third party just for the last voyage to a beaching yard.

In doing so, shipping companies get paid for the value of a ship’s raw materials ...

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...but do not assume any of the responsibilities associated with toxic wastes or oil residuals (which end up at sea).

While last-voyage flags were close to non-existent in the early 2000s, they represented 55.2% of all end-of-life ships globally in 2019"

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"the six most-popular last-voyage flags are primarily flags that did not exist in the early 2000.

The most striking example is the one of Palau, an island with a population below 20,000 inhabitants and a capital city below 300 inhabitants...

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... Its ship registry represents less than 0.001% of the world fleet, but 59.5% of last-voyage flags in 2019.

In other terms, it is likely that this registry has been created specifically with the purpose of allowing shipping companies to evade end-of-life responsibilities"

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The paper points to a dark side of globalization:

"the drop in transportation costs [that facilitated globalization] was partly achieved via the evasion of shipowners’ responsibilities, including environmental liabilities"

As a result, "globalization may have gone “too far“

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Read the full paper here:

Evading Corporate Responsibilities: Evidence from the Shipping Industry papers.ssrn.com/sol3/papers.cf…

A very important work by Guillaume Vuillemey @HECParis (and a great example of #whateconomistsreallydo)

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