There is no doubt that climate change is real. An overwhelming number of scientists agree that climate change is the result of human activities and urgent measure shall be undertaken before the process becomes irreversible.
The Financial Times reports that the shift to clean power has begun to accelerate at a pace that has taken the most experienced experts by surprise. Wind and solar parks are being built at unprecedented rates, threatening the business models of established power companies. Electric cars that were hard to even buy eight years ago are selling at an exponential rate, in the process driving down the price of batteries that hold the key to unleashing new levels of green growth.
Although clean energy disruption has just started many experts who tracked global energy markets for more than 20 years say that it has already caused a significant financial impact on some companies.
Traditional energy companies need to act quickly or they risk being left behind when the world’s appetite for oil has finally peaked.
“Wind and solar are poised to radically reshape energy markets,” analysts at oil and gas consultancy Wood Mackenzie wrote in a report this week, calling it the “biggest shift in strategic direction in a generation.”
Big Oil must spend $350 billion on wind and solar between now and 2035 in order to have their renewable market share match the 12% they currently hold in oil and gas, Wood MacKenzie estimates.
Renewable energy costs have begun to come down, a trend that many expect will accelerate thanks to the billions of dollars being poured into new technologies. Solar costs alone have been roughly halved over the past five years. The growth is backed up by impressive job creation, with solar employment expanding last year 17 times faster than the total U.S. economy.
All of this means there may now be a business case for Big Oil to diversify into cleaner forms of energy, if for no other reason than to protect its own future.
“The growth opportunities in renewables cannot be ignored,” Wood Mackenzie wrote, adding that “renewables pose a threat to legacy oil and gas operations.”
Major oil and gas producers will put more of their capital into wind and solar developments as returns from renewables are poised to exceed some hydrocarbon projects.”
The Economist reports that 2018 is set to be the year the world fully embraces the electric car as electric models start competing with petrol and diesel cars head-to-head.
The rise of electric cars will challenge the world’s thirst for oil. It could spark a global shift of power from countries that have enjoyed the influence that oil has bought. Beyond oil, attention will turn to lithium electric car batteries which rely on the mineral Cobalt. Two-thirds of the world’s cobalt comes from one country, the Democratic Republic of Congo. Demand for cobalt has doubled over the past five years and is set to triple by 2020.
Besides the shift in various industries, climate change has already started to cause real and substantial damage. Over the course of a few weeks, the hurricanes and wildfires left a trail of damage that could add up to nearly $300 billion, according to early estimates from the authors of “The Economic Case for Climate Action in the United States,” a report released by the nonprofit Universal Ecological Fund. It means that the cost of the damage would be equivalent to nearly half Donald Trump’s proposed 2018 budget for the Department of Defense.
The map (below) reflects the uneven distribution of economic impacts of unmitigated climate change based on county-level research. (Graphic by Solomon Hsiang and co-authors of “Estimating economic damage from climate change in the United States” in the journal Science.)
The poorest third of U.S. counties will likely lose up to 20 percent of their incomes, and regions such as the Pacific Northwest and New England will gain economically over the Gulf and Southern states, if climate change continues unmitigated through the end of the century, according to a new study co-led by two UC Berkeley researchers and published today in the journal Science.
The researchers, who examined the economic consequences of climate change for the country, concluded that for every 1-degree Fahrenheit increase in global temperatures, the U.S. economy stands to lose about 0.7% of its Gross Domestic Product, with each degree of warming costing more than the last.
States like California, Massachusetts, New York, and Pennsylvania all have energy efficiency policies that support a strong and growing efficiency workforce. These policies can also keep energy bills low despite claims that investing in clean energy automatically leads to higher costs. But it’s not just good news for energy efficiency. Recent NRDC report shows that clean energy actually costs less than the dirty alternative.
How the current US administration is dealing with the rapid changes? Unfortunately, President Trump has ignored the entire burgeoning clean energy movement in his new so-called “America First” energy plan and is threatening to clamp down on the very agencies, the Environmental Protection Agency and the Department of Energy, that augment this progress.
The impact of Trump’s oil policies look likely to be beneficial for domestic production but cause environmental damage and suppress global oil prices.
Trump’s trade and energy policies are creating uncertainty in oil markets. The President’s bullish strategy for expanding US oil production appears to add further downward pressure to global oil markets and are likely to see an increase in domestic production.
Today, oil and gas industry supports 9.8 million jobs or 5.6% of total U.S. employment. Rapid growth in oil production from shale using advanced hydraulic fracturing and horizontal drilling is creating high-paying jobs and boosting personal incomes in states like North Dakota and Texas.
However, with the rapid development of technology which made renewable sources of energy competitive, it is appropriate to ask whether employment in the oil and gas industry is sustainable.
The solar and wind industries are each creating jobs at a rate 12 times faster than that of the rest of the U.S. economy, according to a new report. The study, published by the Environmental Defense Fund’s (EDF) Climate Corps program, says that solar and wind jobs have grown at rates of about 20% annually in recent years.
The renewable energy sector has seen rapid growth over recent years, driven largely by significant reductions in manufacturing and installation costs. Building developers and owners have been fueled by state and local building efficiency policies and incentives, the report explains.
But, these gains are in contrast to Trump’s support for fossil fuel production, his climate change denial and his belief that renewable energy is a “bad investment”.
“Trump’s current approach is basically ignoring an entire industry that has grown up over the last 10 years or so and is quite robust,” Liz Delaney, program director at EDF
What about Trump’s tax reform plan? Apparently, it would help the wealthy more than the middle class. Once all the deductions and exemptions are factored in, the poorest fifth of the population receives a tax break of 0.5% to 0.2%. They were better off under Trump’s Five-Part Plan, where they received a 0.6% boost.
The tax break improves for each income level. The top 1% would get an 8.5% break. That’s better for them than Trump’s Five-Part plan, which gave a 6.5% break. This favoritism to the wealthy is why Trump’s tax plan increases the debt so much. The most affluent Americans contribute the lion’s share to total tax revenues.
More than a third of taxpayers already have incomes that fall below their standard deduction and personal exemptions. They wouldn’t benefit at all from the Framework plan, according to New York University law professor Lily Batchelder.
The Framework hurts parents of school-age children because they lose the personal exemption for each child. That means almost 10 million parents will see their taxes increase.
The Framework doesn’t mention the head of household filing status. But Trump’s earlier plan eliminated it. That would hurt single-parent families.
It seems that within a period of one year since Donald Trump was elected, his policies affect not only business and environment but also the U.S. role as a global leader.
Former US Defense Secretary Ash Carter said at the Atlantic Council on April 4 that The United States’ role as a global leader in defence is not “automatic,” it must be maintained and improved by building bridges between the technology and security sectors to encourage innovation in military operations. Carter said, “that excellence is not a birthright; it’s not automatic.” He called for the federal government to invest in innovation technology to meet an uncertain future.
Currently, the five largest economies are China, the United States, India, Japan and Germany. However, could these countries maintain their places between now and 2030? Or will see a reshuffling?
Source: The World Bank, 1 July 2017
PricewaterhouseCoopers, one of the world’s largest professional-services firms, (PWC) released its predictions for the most powerful economies in the world by 2030. The report, titled “The long view: how will the global economic order change by 2050?” ranked 32 countries by their projected global gross domestic product by purchasing power parity.
Purchasing Power Parity (PPP) is used by macroeconomists to determine the economic productivity and standards of living among countries across a certain time period.
PWC also released the report, titled “The World in 2050. The long view: how will the global economic order change by 2050?”
Key results of the report (as summarised also in the accompanying video) include:
- The world economy could more than double in size by 2050, far outstripping population growth, due to continued technology-driven productivity improvements
- Emerging markets (E7) could grow around twice as fast as advanced economies (G7) on average
- As a result, six of the seven largest economies in the world are projected to be emerging economies in 2050 led by China (1st), India (2nd) and Indonesia (4th)
- The US could be down to third place in the global GDP rankings while the EU27’s share of world GDP could fall below 10% by 2050
- UK could be down to 10th place by 2050, France out of the top 10 and Italy out of the top 20 as they are overtaken by faster growing emerging economies like Mexico, Turkey and Vietnam respectively
- But emerging economies need to enhance their institutions and their infrastructure significantly if they are to realise their long-term growth potential.
All of the above represent only a part of the damage caused by Donald Trump so far. It is clear that the damage would be much greater if Trump remains in power for the entire term.
It is also clear that his “Make America Great Again” is nothing but another lie. In fact, is it Trump’s way to declare the end of the role of the United States as a global power?