As the West and China/Russia drift apart economically, both the US and the EU try to decouple their supply chains from China, Russia, and their allies.
I fear that the continued de-coupling plus a scramble for "transition metals" will likely lead to some very brutal proxy wars (just like the 70s). Just my 2c.
I am quite optimistic, actually, precisely because the climate damage is already made. CO2 represents a factor that acts as a catalyst, like in an enzymatic reaction. It has been seen that even if we stopped emitting greenhouse gases tomorrow, we could witness an increase for another 100 years. The transition has more of an economic than ecological meaning, in the sense that it decisively diversifies the sources, finally freeing us from "rogue" nations; it improves health and reduces healthcare costs and in the long run (not even that long) will have a fundamental deflationary effect. In the end, the transition will follow the times of convenience. When renewable sources, nuclear fusion, and even more markedly a service-based economy prevail, the whole world will be forced to adapt or risk exclusion from the global market due to lack of competitiveness. That same competitiveness that allowed China and India to enter the club of the rich by exploiting the advantage on production costs. While beforehand the advantageous production costs were linked to polluting technologies, in the future they will be linked to zero-emission ones. In all this, the only real ‘mysterious’ object is China. I believe that once the war in Ukraine will come to an end, Russia will find its place again in the international community, and the reason can be seen from the first graph: in the new extended market of commodities, Russia becomes a supplier like any other. It is China that have the upper hand. Will it be war or will the reasons for real economic convenience prevail? China is not Russia; if things were to go really badly, its ruling class would be hung in the square. As an Italian, I know something about it. IMVHO.
To paraphrase myself from above: I hope you are right, but I fear you could be wrong.
I love your optimism, but the problem in my view is that we will still need stuff to be produced and that the manufacturing will move to wherever it is easiest. That has been China, and n ow South East Asia. Who knows whether it will go to South Asia, Africa or Eastern Europe next. But it is that manufacturing base that worries me about climate change. Even if it is shrinking, it is still going to emit too much for too long.
(1) I have read there is a limit on (some of?) the minerals not yet extracted from mines, and already it is increasingly expensive as ores quality declines - if yes, what do we do in 2050s?
(2) The environmental damage done by mines, and the use of slave & child labour seem to be breach of the Greens ESG measures, or just humanity.
Meanwhile governments encourage EVs which use multiples more minerals to make and whose batteries will need replacement in time.
Well yes, EV use more minerals to produce, but over the lifecycle of a car, the emissions are still lower than for a regular car. It's just that the emissions of an EV are made before the car has driven a single mile and the emissions for a regular car are made both during production and while it is driving. This is why you need to drive an EV for about 2-3 years before it is less polluting than a regular car.
As for the batteries, they are increasingly being g recycled with Umicore at the forefront of battery recycling technology. So we need less and less metals from mines (and as far as I know, these metals in the ground will last until 2100 at least and we people are working on replacing the scarcest ones like cobalt). It's a little bit like gold. Gold supply from mines today is only about 3% of the demand of the metal, the rest comes from recycling.
Also, the battery technology is changing. A Chinese manufacturer (I think it is Neo, but it could be another one), is already rolling out cobalt-free batteries and VW has last week claimed they could make the first large scale solid-state battery (which would be a major breakthrough because these batteries last much longer and need far fewer metals).
Thanks Mr K. Your facts point to a more optimistic path. As always informative. Never ignore the potential for our wonderful scientists & engineers to find a solution.
However, I suggest there are still harms caused by pollution etc, in particular burying solar panels & windmills on obsolescence (but recycling may help?).
By 2100 AD I suspect we shall have devised radically new means of transport - if the damage of climate change has not been too harmful …..
At some time, can you please give us an article about your views on Jeremy Grantham’s predictions? Thanks.
WTF is this hydrogen justice nonsense? This is embarrassing...
I fear that the continued de-coupling plus a scramble for "transition metals" will likely lead to some very brutal proxy wars (just like the 70s). Just my 2c.
I hope you are wrong, but I fear you re right.
I am quite optimistic, actually, precisely because the climate damage is already made. CO2 represents a factor that acts as a catalyst, like in an enzymatic reaction. It has been seen that even if we stopped emitting greenhouse gases tomorrow, we could witness an increase for another 100 years. The transition has more of an economic than ecological meaning, in the sense that it decisively diversifies the sources, finally freeing us from "rogue" nations; it improves health and reduces healthcare costs and in the long run (not even that long) will have a fundamental deflationary effect. In the end, the transition will follow the times of convenience. When renewable sources, nuclear fusion, and even more markedly a service-based economy prevail, the whole world will be forced to adapt or risk exclusion from the global market due to lack of competitiveness. That same competitiveness that allowed China and India to enter the club of the rich by exploiting the advantage on production costs. While beforehand the advantageous production costs were linked to polluting technologies, in the future they will be linked to zero-emission ones. In all this, the only real ‘mysterious’ object is China. I believe that once the war in Ukraine will come to an end, Russia will find its place again in the international community, and the reason can be seen from the first graph: in the new extended market of commodities, Russia becomes a supplier like any other. It is China that have the upper hand. Will it be war or will the reasons for real economic convenience prevail? China is not Russia; if things were to go really badly, its ruling class would be hung in the square. As an Italian, I know something about it. IMVHO.
To paraphrase myself from above: I hope you are right, but I fear you could be wrong.
I love your optimism, but the problem in my view is that we will still need stuff to be produced and that the manufacturing will move to wherever it is easiest. That has been China, and n ow South East Asia. Who knows whether it will go to South Asia, Africa or Eastern Europe next. But it is that manufacturing base that worries me about climate change. Even if it is shrinking, it is still going to emit too much for too long.
A helpful measure for geopolitical risk beyond headline sentiment analysis.
Great work by the IMF and appreciate you sharing the insights.
A hopeful argument that trade will continue; but:
(1) I have read there is a limit on (some of?) the minerals not yet extracted from mines, and already it is increasingly expensive as ores quality declines - if yes, what do we do in 2050s?
(2) The environmental damage done by mines, and the use of slave & child labour seem to be breach of the Greens ESG measures, or just humanity.
Meanwhile governments encourage EVs which use multiples more minerals to make and whose batteries will need replacement in time.
Is it they or I who is mad?
Well yes, EV use more minerals to produce, but over the lifecycle of a car, the emissions are still lower than for a regular car. It's just that the emissions of an EV are made before the car has driven a single mile and the emissions for a regular car are made both during production and while it is driving. This is why you need to drive an EV for about 2-3 years before it is less polluting than a regular car.
As for the batteries, they are increasingly being g recycled with Umicore at the forefront of battery recycling technology. So we need less and less metals from mines (and as far as I know, these metals in the ground will last until 2100 at least and we people are working on replacing the scarcest ones like cobalt). It's a little bit like gold. Gold supply from mines today is only about 3% of the demand of the metal, the rest comes from recycling.
Also, the battery technology is changing. A Chinese manufacturer (I think it is Neo, but it could be another one), is already rolling out cobalt-free batteries and VW has last week claimed they could make the first large scale solid-state battery (which would be a major breakthrough because these batteries last much longer and need far fewer metals).
So, we are getting there.
Thanks Mr K. Your facts point to a more optimistic path. As always informative. Never ignore the potential for our wonderful scientists & engineers to find a solution.
However, I suggest there are still harms caused by pollution etc, in particular burying solar panels & windmills on obsolescence (but recycling may help?).
By 2100 AD I suspect we shall have devised radically new means of transport - if the damage of climate change has not been too harmful …..
At some time, can you please give us an article about your views on Jeremy Grantham’s predictions? Thanks.