Early Headlines: America in the Way, U.S. Carbon Reduction, Japan Contraction, Saudi Yemen Mistake, EU Economy Slows and More

Early Bird Headlines 17 August 2015

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.

Global

• America in the Way (Joseph Stiglitz, Project Syndicate) Prof. Stiglitz says that the financial structure of the U.S. has created a world where “investment projects with high social returns were being starved of funds“. Most of the investment projects that the emerging world needs are long term, as are much of the available savings – the trillions in retirement accounts, pension funds, and sovereign wealth funds. But our increasingly shortsighted financial markets stand between the two.
• Study Links Meat, Sugar Consumption To Early Death Among Those Who Choose To Be Happy In Life (The Onion) Hat tip to Barry Ritholtz retweet via Twitter.
  
• New Study Finds Earth’s Core Will Be Most Habitable Part Of Planet By 2060 (The Onion) Projecting current trends yields dire predictions.
  

U.S.

• What Caused An Emissions Decline In The United States? (Decline of Empire) Hat tips to John Hemmington and Roger Erickson. This is an excellent review of what has been happening to energy and greenhouse gas emissions in the U.S. Don’t let this deter you from reading the entire article but the author concludes that two things drove the 11% decline in CO2 emissions by the U.S. between 2007 and 2013 were (1) economic slowdown from the Great Recession and (2) displacement of coal by natural gas for electricity production. See following articles.
  

• Hillary Clinton’s Climate Plan Is Rhetorically Grand and Scientifically Unambitious (Slate) This article takes Hillary Clinton to task for not being aggressive in clean energy planning. But after you read the article preceding and the one following this you may come to the same conclusion we have: She has proposed something that will be very hard to achieve.
• Drivers of the US CO2 emissions 1997–2013 (Nature Communications)

Fossil fuel CO2 emissions in the United States decreased by ~11% between 2007 and 2013, from 6,023 to 5,377 Mt. This decline has been widely attributed to a shift from the use of coal to natural gas in US electricity production. However, the factors driving the decline have not been quantitatively evaluated; the role of natural gas in the decline therefore remains speculative. Here we analyze the factors affecting US emissions from 1997 to 2013. Before 2007, rising emissions were primarily driven by economic growth. After 2007, decreasing emissions were largely a result of economic recession with changes in fuel mix (for example, substitution of natural gas for coal) playing a comparatively minor role. Energy-climate policies may, therefore, be necessary to lock-in the recent emissions reductions and drive further decarbonization of the energy system as the US economy recovers and grows.

EU

• The Euro’s future is secure, but it may not be the one that we expect (Süddeutsche Zeitung) Hat tip to Roger Erickson. The author sees a new Europe emerging where the members of the Eurozone will be only those countries which can run current account surpluses. Those that cannot achieve that condition will either run painful “internal devaluations” (Greece, Portugal, Italy, Spain) or abandon the euro. Econintersect: Why can’t all countries be successful following the German exports driven growth model (a number of Eurozone countries are doing that)? Answer: If all countries run trade surpluses, who is doing all the importing?

• Euro zone economy slows as France stalls and China risks loom (Reuters) Economic growth in the euro zone slowed in the second quarter as France stagnated and Italy lost momentum, held back by an uncertain global outlook that is even weakening investment in powerhouse Germany.

Germany

• Merkel fights to contain Greece rebellion (Financial Times) Chancellor Angela Merkel is fighting to contain the largest revolt from her party this week when the German parliament votes on a new, €86bn rescue plan for Greece. The chancellor has rescheduled trips to Italy and Brazil to maximize her time in Berlin and party managers have been mobilized to dissuade potential rebels from voting against the bailout in the Bundestag on Wednesday.

Saudi Arabia

• How Saudi Arabia got its Yemen campaign so wrong (The Conversation) After decades of caution and under-the-radar meddling, Saudi Arabia launched an all-out war in Yemen. Big mistake.

China

• PBOC chief economist says yuan may move both ways (The Business Times) The yuan will probably move in both directions in the future following last week’s devaluation as the economy stabilizes, according to Ma Jun, chief economist at China’s central bank. A more market-oriented pricing mechanism for the yuan will help to avoid excessive deviation from the equilibrium level and significantly reduce the possibility of sudden fluctuations, Mr Ma said in an e-mailed statement on Sunday. The economy will probably grow about 7 per cent this year, he said.

Japan

• Japan economy shrinks in second quarter in setback for ‘Abenomics’ (Reuters) The Japanese economy shrank at an annualized rate of 1.6% in 2Q 2015. Exports slumped and consumers cut back spending, adding pressure on Prime Minister Shinzo Abe to step up his policy drive to lift the economy out of decades of deflation. The slump was actually less than the -1.9% expected by economists and the impact was slightly softened by an upward revision of 1Q growth to 4.5%

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