“The world is set to see global GDP plummet by a catastrophic 15% by 2050 if current emissions trends are not reined in and global warming reaches 2.2°C by 2050.
[An unwarrantedly optimistic conclusion drawn from an artificially narrow analysis. Factor in some of our other converging crises, like biodiversity loss, pollution, financial limits, geopolitical friction and energy constraints; and it seems unlikely to me there will even be a globalised economy by 2050.
Even if a rise to 2.2C were the full scope of our problems, I can well imagine that knocking out enough systemically critical inputs/hubs/infrastructure to collapse the global economy in its entirety. We can see how close major rivers like the Yangtze the Rhine came to drying up this year at 1.2C. And in all likelihood a rise in temps to 2.2 would have further warming “baked in” via self-reinforcing feedbacks.]
“Oxford Economics warned in the latest report of its Global Climate Service that climate catastrophe was a major threat to the global economy, with cooler countries no longer benefiting from modest warming.”
https://www.intellinews.com/apocalypse-2050-world-on-course-for-15-gdp-fall-265434/
“Global coal use to hit all-time high amid energy crisis…
“Heat waves and droughts in some regions have also driven up electricity demand and reduced hydropower, while nuclear generation has also been weak, especially in Europe, where France had to shut down nuclear reactors for maintenance.”
https://www.dailysabah.com/business/energy/global-coal-use-to-hit-all-time-high-amid-energy-crisis
“Global Recession Risks Rise as Central Banks Raise Rates…
“Major central banks this week signaled their willingness to countenance a global recession in 2023 as they promised to raise borrowing costs further in their ongoing battle against sky-high inflation.”
“Central banks should beware the dangers of over-tightening…
“If either the US or eurozone enters recession in 2023, the scope for fiscal policy relief will be limited at best. The result would be pressure on central banks to reverse their tightening — though ironically the impact of such a reversal would come too late to do much good. Rather than going up and then down, isn’t it better to pause and see what is necessary?”
https://www.ft.com/content/78472051-e2f3-4341-9eb5-7a43ce194236
“World shares extend rout, oil prices drop on recession worries. A rout in global equities extended on Friday and government bond markets came under fresh selling pressure as hawkish tone from central bankers and weak data stoked recession fears. The selling spilled over into commodities markets…”
https://www.reuters.com/markets/global-markets-wrapup-1-tv-2022-12-16/
“South Korea trade deficit heralds coming global crisis… Previous two Korean trade deficit peaks presaged major economic and financial crises in 1997 and 2008…
“The previous two peaks of South Korean trade deficit occurred during major economic and financial crises. South Korea’s trade deficit peaked at $20.6 billion in 1996. In 2008, South Korea had an annual trade deficit of $13.3 billion.”
https://asiatimes.com/2022/12/south-korea-trade-deficit-heralds-coming-global-crisis/
“Why recession fears are back: Americans are losing faith…
““At the end of the day, a recession is a loss of faith,” said Mark Zandi, chief economist at Moody’s Analytics. Consumers worry about losing a job and so pull back on spending, and business leaders worry their sales will decline and start laying off workers.”
https://edition.cnn.com/2022/12/16/economy/talking-ourselves-into-recession/index.html
“UK retail sales unexpectedly fell in November as Black Friday failed to deliver its usual boost, deepening the cost of the living crisis engulfing the sector…
“The data underscore concerns that the UK is already in recession, as the Bank of England believes. Consumer spending accounts for two thirds of national output and is key for growth.”
“Winter blackouts: Disabled people must draw up their own back-up plans, say ministers..
“Both the government and the energy regulator Ofgem have confirmed to Disability News Service that people who use ventilators, dialysis machines or other equipment must make their own contingency plans rather than expect anything more than basic support from the government or industry in the event of planned power-cuts this winter.”
“Biggest North Sea producer refuses to drill new oil wells because of windfall tax…
“Harbour Energy said it had decided not to bid for new blocks in the ongoing North Sea licensing round, the first since 2019, after the Government imposed a windfall tax on oil and gas producers earlier in the year.”
“EU Races To Replace Russian Oil Products.
“Oil flows and global oil trade routes have changed materially in the past months as Russia pivots to Asia while Europe seeks to import more crude and products from producers other than Russia… One thing is certain: the EU needs around 1 million barrels per day (bpd) of Russian products – diesel and naphtha – replaced by February.”
https://oilprice.com/Energy/Crude-Oil/EU-Races-To-Replace-Russian-Oil-Products.html
“The Kremlin said on Friday it was finalising the last details of how it would respond to the West’s imposition of a price cap on Russia’s oil exports.
“Moscow has repeatedly said it will not sell oil to countries that comply with the cap and has promised to publish a presidential decree outlining Russia’s full response this week.”
“Japan confirmed a major nuclear power policy shift on Friday to tackle an energy crisis more than a decade after the 2011 Fukushima disaster prompted it to idle most of its reactors.
“Public opinion has been hostile towards nuclear energy since a massive earthquake and tsunami triggered a meltdown at the Fukushima Daiichi power plant, but the mood has shifted due to soaring energy costs…”
“China’s Home Price Slump Persists as Buyer Demand Remains Weak.
“China’s housing market slump persisted in November as prices and sales fell, underscoring the challenge for authorities as they seek to revive the beleaguered property market… The declines came in a month when policy makers unveiled a sweeping plan to rescue the sector…”
“US adds 36 Chinese companies to trade blacklist…
“The dramatic action comes after Washington in October unveiled severe export controls designed to prevent China from developing high-end chips or producing the tools required to manufacture the chips domestically, as part of a growing effort to slow its military modernisation.”
https://www.ft.com/content/2ddb2288-6bae-4672-8bf6-e51d79ca29c3
“China calls US ‘destroyer’ of global trading system at WTO… China accused Washington on Wednesday of using subsidies to prop up national industries and refusing to abide by the rules of the WTO…
“China’s ambassador to the WTO Li Chenggang said in a speech that he was disappointed in the U.S. trading record, saying it had not lived up to President Joe Biden’s inaugural pledge to lead “by the power of our example”.
https://www.euronews.com/2022/12/15/trade-wto-china-usa
“China’s Protests Spill Into the US. FBI Arrests a Chinese Student For Stalking.
“A 25-year-old Chinese student was arrested and charged in U.S. federal court in Boston on Wednesday accused of harassing a Chinese pro-democracy activist. Xiaolei Wu, a student at the Berklee College of Music, was charged with one count of stalking.”
“Thousands of tourists stranded near Machu Picchu amid unrest in Peru.
“The December arrest of the country’s former president Pedro Castillo spurred chaos in Peru and triggered ongoing political protests. As a result, rail lines, roads and airports have been closed, preventing tourists of varying nationalities from leaving the area around Machu Picchu…”
“Peru protests: Ministers quit as death toll mounts… Two government ministers have quit their posts in Peru…
“Officials say eight more people died on Thursday during clashes between the army and supporters of Pedro Castillo. Meanwhile, thousands of tourists are trapped in the city of Cusco after protesters forced the airport to close.”
https://www.bbc.co.uk/news/world-latin-america-64005820
“Peru Political Crisis Threatens to Widen Latin America Rifts.
“Peru’s political crisis is threatening to widen rifts in Latin America, with the administration of President Dina Boluarte saying late Wednesday that it had received the backing of governments in Chile, Ecuador, Uruguay and Costa Rica… Mexico, Argentina, Colombia had backed Pedro Castillo.”
“Chile’s Capital Chokes on Smoke From Forest Fires Amid Heat Wave… Authorities cancel classes, tell at-risk groups to stay home…
“Chile has been walloped by climate change and is in the grips of a 14-year drought that has prompted talk of water rationing in the Santiago Metropolitan Region, which is home to about 40% of the nation’s 19 million people.”
“Kenya will face ‘elevated’ external debt service obligations in 2023, 2024.
“Kenya faces elevated external debt service obligations in 2023-2024, including the maturity of a $2 billion Eurobond in June 2024 and high current account deficits, which will lead to sustained pressure on international reserves, global ratings agency Fitch Ratings said in a new report.”
“Egypt has dug itself a massive hole of debt. On Friday, the International Monetary Fund (IMF) will extend a $3 billion loan to the country, a fourth aid package in six years, as its financial tailspin continues.
“The loan, along with billions of dollars in cash inflows from Abu Dhabi and Riyadh, are Band-Aids, experts say, designed to keep the Arab world’s most populous country afloat.”
https://edition.cnn.com/2022/12/16/business/egypt-debt-crisis-mime-intl/index.html
“Jordanians continue fuel protests day after ‘rioting’…
“Jordanians staged sit-ins on Friday and activists called for more protests against fuel price increases that have caused the cost of living to rise, a day after riots in the southern city of Maan left one police officer dead, witnesses and security sources have said.”
https://www.aljazeera.com/news/2022/12/16/jordan-protests-spread-over-rising-fuel-price
“Floods in Lebanon leave Syrian refugees counting their losses.
“Heavy rains, flooding and landslides along the Lebanese coast last month took a heavy toll on low-lying slum areas where many Syrians live, displacing hundreds of refugees and causing extensive damage to their often-precarious shelters.”
“Starved of electricity, some Syrians turn to solar power…
“Those still relying on the public grid or private generators have been hit particularly hard in recent weeks as severe fuel shortages forced the state to ration fuel distribution, telecoms towers to cut network access and public institutions to shorten their work weeks.”
“Iranians hit streets again as anti-regime protests enter fourth month…
“Hundreds took to the streets on Friday in Iran’s restive southeast, footage shared by human rights groups showed, beginning the fourth month of protests sparked by Mahsa Amini’s death. Protesters in Zahedan, the Sistan-Baluchistan provincial capital, chanted “death to the dictator,” taking aim at supreme leader Ayatollah Ali Khamenei…”
“Sri Lanka drug, fuel shortages hit treatment of animals hit by cyclone cold shock.
“Treatment of animals who had fallen sick in Sri Lanka following a cold wave from Cyclone “Mandous” last week was hampered by shortages of drugs and fuel for veterinarians and, Livestock development instructors, an official said. By December 14th 1,272 animals had died.”
“Only 2% of cryptocurrencies have ‘healthy’ liquidity, says BitStacker.
“As major crypto exchanges like FTX go bankrupt amid high volatility, almost 90 per cent of cryptocurrencies have a low trading volume, with just 2 per cent of crypto coins having a healthy liquidity, a new study has found.”
“The great crypto crisis is upon us.
“There is a bitter irony in the turmoil currently gripping the crypto universe. Crypto was born in the depths of the great financial crisis of 2008 as a backlash against the failings of the conventional financial system, with its overleveraged shadow banks and daisy chain of leverage and maturity mismatch…
“However, today’s upheaval bears all the hallmarks of precisely the failings that the industry’s early proponents railed against. As firms collapse and coin prices crash, the unravelling of this new daisy chain of over-leveraged shadow crypto banks is now in full flow.”
https://www.ft.com/content/76234c49-cb11-4c2a-9a80-49da4f0ad7dd
You can read the previous “Economic” thread here. I’ll be back on Monday with a “Climate” thread.
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Feel urged to comment, the dire 15% reduction in global GDP forecasted by 2050 is exactly the sort of thing that has to happen, albeit designed and managed, if we have any hope of stabilizing runaway climate change. Potsdam Institute says reduce GHG, ergo FF consumption, ergo spending, by 6% per year from now till 2030. That is way more than 15% cummulative.
No doubt about it, train wreck dead ahead.
Thanks, Ian, for pointing this out. Of course, from the climate change perspective, de-growth is exactly what the doctor ordered. It is the obvious “solution” to that problem. I’ll quote Paul Chefurka here, the better to express myself:
“The realization that a solution in one domain may worsen a problem in another marks the beginning of large-scale system-level thinking. It also marks the transition from thinking of the situation in terms of a set of problems to thinking of it in terms of a predicament. At this point the possibility that there may not be a solution begins to raise its head.”
http://www.paulchefurka.ca/LadderOfAwareness.html
JP – I literally laughed out loud at not just the drop in GDP figures, but the rest of the colourful rhetoric in your headline post. Mainly because I had just finished reading Tim Morgan’s blog about how GDP is an inaccurate measure of ‘growth’ in the first place, and hence somewhat meaningless.
My understanding now, is that global ‘degrowth’, or global economic contraction will happen anyway, (and is already starting) due to diminishing resources and related infrastructure that underpin the economy. Continuing climate disasters will only add additional impacts to increase the speed of that degrowth. The degrowth will probably be chaotic and unfairly distributed within and between countries – as it isn’t likely to be “designed and managed”.
Perhaps some economic genii will come up with clever ‘bandaids’ that keeps it ticking along for a few more years, or even a decade or two – but methinx it would be just a last kick of the can before hitting the ‘wall’.
An alternative to degrowth happening as it will, there is the old axiom that whenever capitalism is in crisis, and the angry masses start rumbling – the default action of the PTBs to keep it all afloat, is a war economy – keeps the populations under control to become quickly accustomed to rationing, shortages, curfews, restrictions etc. I read recently, that most OECD countries are now increasing spending more on defence capability than climate mitigation.
Rain, your second para is a perfect summary.