DGI Brief - Nov 14, 2016
- WORLD: The annual Global Carbon Project analysis shows almost no rise in CO2 emissions for the world despite an overall rise in global economic growth. This is attributed mostly to declining US coal consumption & Chinese economic slowdown – China’s expansion saw the addition of 2 new coal-fired power stations ever week driving carbon emissions up rapidly over the past 16 years, which has now sharply slowed down. However India, which is growing around 6% per year expects to double its domestic coal production by 2020. Why it matters: The global use of fossil fuels has been instrumental to economic growth in the 20th century, but improved pricing of wind, solar & gas are displacing coal as a viable source of electricity production – esp. in the US. The existing market forces are simply saying no to the coal industry. Given they are the world’s biggest polluters, both the US & China have great opportunity to deliver even more ambitious carbon emission reductions if they listen to the markets & focus on renewables. People, profits & the planet will thank them for it. That doesn’t mean however that the battle is won. According to data, 2016 will be the hottest year on record, increasingly highest for 17 years in a row. ‘Our home is on fire…’
- EUROPEAN UNION Foreign Ministers met in Brussels to sign off on a robust defense & security plan to better respond to external threats, enhance the capacity to protect the EU bloc & improve the security resilience of EU partners. They also reaffirmed EU’s commitment to the Iran nuclear agreement & called for a greater role of the bloc in world affairs. Why it matters: The security & defense plans were not calls for an “EU army” that is opposed by many NATO partners. But the meeting & its action points are an obvious sign of European uncertainty & nervousness about the specifics-lacking policies of the next US administration. A unified front on foreign affairs is the best – and only – position EU can present at this time. It is good time to carve a larger leadership role for itself, projecting stability, vision & direction. Projecting, being the operative word for there are serious divisions & populist movements throughout. See it an opportunity to address these internal threats.
- CHINA’s state-run/Communist party-controlled newspaper asserted President-elect Trump would be “naïve” to pursue trade war with China & outlined a number of serious economic countermeasures should Trump follow up on his accusatory & threatening rhetoric. These would include freeze on imports of US soybean & maize (significant!), halting the sale of US automobiles & iPhones & turning to non-US industries. Why it matters: Despite these countermeasures being difficult for China to implement, they are not implausible & would definitely create a very toxic bilateral environment. The editorial was published after Trump & president Xi’s phone call. The collective belief is that it will not come to these extremes & Trump’s administration will be pragmatic, but China is sending an important message not to be messed with. Just like the EU, it is taking a stance in this time of uncertainty.
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