Governments grapple with energy challenges ahead of climate summit
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When the Paris Climate Change Treaty was adopted in 2015, the idea that the five-year check – at the COP26 summit delayed next month in Glasgow – would take place amid the wreckage of a global pandemic was rather fanciful.
The combination of large economies causing increased demand for energy as they come back to life, along with supply chain issues, labor shortages and rising inflation have all combined to form a “Perfect storm” (according to all media), threatening the economy recovering from the coronavirus.
The latest rebound today comes from Russia, where energy giant Gazprom – which supplies nearly a third of mainland Europe’s gas – has lowered hopes for increased supplies next month, pushing up prices 18% price.
In addition to attempts to mitigate skyrocketing costs to consumers, such as ‘fuel vouchers’ in France or a possible reduction in value added tax on household bills in the UK, the crisis has also highlighted strong differences in national energy policies.
In the UK, where a green energy investment summit will be held tomorrow, nuclear power is at the heart of its strategy to achieve net zero carbon emissions by 2050.
On the other hand, EU policy is complicated by the fact that member states are moving in two different directions. France, the biggest proponent of nuclear power, promises to invest € 1 billion in the sector by the end of this decade, while Germany has decided to phase it out entirely by next year . Belgium is also determined to abandon nuclear power and increase its dependence on gas.
In the United States, Democrats in coal-rich states are delaying President Joe Biden’s green energy plans. And in China, the government is trying to fix power outages at factories – a contributing factor to the country’s slowing growth shown in today’s GDP data – by switching back to dirtier fuels, ordering rapid expansion of coal mining despite commitments last year to reduce carbon dioxide emissions.
The magnitude of the challenges ahead in Glasgow was highlighted last week by the International Energy Agency. Global emissions fell sharply in 2020 due to the pandemic, the IEA said, but the speed of the global recovery means they are now on track for their second-largest annual increase on record.
You can find all our reports on the preparation of COP26 on our Climate capital hub
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Good to know: the economy
Long-awaited GDP figures from China posted 4.9% growth in the third quarter, with quarterly growth of just 0.2%, confirming the country’s slowing recovery. The new data adds to the pressure on President Xi Jinping as he enters the last year of his second term and continues his “common prosperity” strategy with an emphasis on the redistribution of wealth.
Latest for UK and Europe
Traders are now betting on an increase in interest rate of the Bank of England in November after the Governor of the BoE Andrew Bailey warned the bank “should act” to curb inflation. Chief Economic Commentator Martin Loup is scathing at government policy, arguing that it was impossible to build a high-wage, high-skill, high-productivity economy based on the ‘Brexit dividend’ of restricting the immigration of people poorly qualified. New UK inflation figures will be released on Wednesday.
UK house prices continue to rise, with new data from the Rightmove real estate portal showing increases across all sections and regions for the first time in 15 years. Demand always exceeds supply, and buyers are scrambling for mortgages before interest rates rise.
The congestion at the ports of the world tells us a lot about the pre-pandemic problems in the global economy, writes columnist Rana Foroohar, from the skills-job mismatch to over-reliance on China for manufactured goods. One solution might be to institute a “rule of four” – that no more than 25% of any critical supply should come from one place or enter one port.
Seasoned investor Mohamed El-Erian warns of dangers of rising inflation and supply chain issues for Developing countries. Higher import costs fuel food insecurity and soaring energy costs cripple industrial production, while ultra-accommodative monetary policies in the US and Europe have diverted capital to richer countries looking for higher returns.
Actions in Valneva, the French vaccine maker, jumped 43% today after test results showed its Covid-19 jab produced a stronger immune response with far fewer side effects than the comparable Oxford jab / AstraZeneca. Its shares had fallen by a similar amount last month after the UK government ended its deal to buy at least 100 million doses.
Philips become the latest company to cut its annual forecast due to supply chain issues. The Dutch manufacturer’s revenues were also affected by the recall of defective sleep apnea devices.
DIY stock trading exploded during the lockdown, with more than 7 million people in the UK and 30 million in the US opening investment accounts in the first 12 months of the pandemic. Users have flocked to platforms such as Robinhood and ETrade in the US, or CMC Markets in London. But is this new army of traders here to stay?
The world of work
Some say: after a crisis, you have to be able to return to the current situation. Others say: the the essence of a crisis is that you change fundamentally. Psychotherapist Esther Perel offers some tips on how to navigate the “next normal” at work.
One path to this change is a Executive MBA, where, unsurprisingly, business schools and students are once again focusing on resilience and managing disruption. Browse our latest guide, including rankings for the best courses in the world.
For those of us who started working before the iPhone came in 2007, writes columnist Pilita Clark, break time was much easier to find. But young workers seem much more daring in telling their bosses they won’t work on demand, she writes, no matter how badly they are needed.
Covid cases and vaccinations
Total global cases: 240.6 m
Get the latest global image with our vaccine tracker
How do you know if that diamond brooch you are looking at is ethically sourced? Our Good Gemstone Guide examines traceability and sustainability in the “Wild West” of the jewelry industry.
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