The Consumer Product Safety Commission (CPSC) has launched an inquiry into natural gas stoves, and critics believe the move could pave the way for their elimination from the market. The move follows a backlash against reports suggesting the CPSC planned to ban gas stoves and has fuelled speculation that the technology will face a growing regulatory challenge as US states and local authorities increasingly seek to reduce carbon emissions. Natural gas stoves are preferred in the US to electric alternatives, according to the Kitchen & Bath Industry Show.
Wei Li, the global chief investment strategist for BlackRock, has attributed her success in the financial sector to maths skills that she honed as a teenager competing in the International Mathematical Olympiad. Li, who is based in London, explained to Bloomberg Markets that she had initially stumbled into finance, attracted by the "fast pace of markets" and the sense that "an individual can soak all of that in and respond". She has also cultivated an awareness of her introverted tendencies and how to play to her strengths in dealing with her more assertive colleagues. Her advice to younger colleagues is to "be replaceable".
In the interview, Li expressed doubts about the effectiveness of central banks over the longer term. She said that although the banking crisis of March 2020 had “stabilized”, the cost of the supply-side tools of central banks, specifically measures to address the impact of Covid-19, was higher than for demand-side tools, leaving economies vulnerable. Growth would slow down and financial “cracks”, such as unfunded tax cuts and funding stress on commercial real estate, could appear.
Although cautioning against a focus on the longer term, Li said she was preoccupied by “building depth and expertise” and “putting in place a very rigorous process for generating views in a whole portfolio context”. Notably, she said that the net-zero transition and the “structural forces like aging demographics” required closer attention. BlackRock is one of the world’s largest asset managers, with over $9tn in assets under active management.
US Republican Congress member John Curtis, chairman of the Conservative Climate Caucus, has been criticised for claiming $10,000 in clean-energy tax credits as part of the Democratic Inflation Reduction Act which every Republican voted against. Curtis revealed that he has used the subsidies to buy 30 rooftop solar panels and a geothermal heat pump for his Utah home. Curtis has said he bought the technology to make climate-friendly upgrades to his home well before President Biden signed the climate legislation into law and that it was not his intention to claim federal tax credits. Conservatives including Benji Backer, president and founder of the American Conservation Coalition, defended Curtis and called for a lower-cost version of the Inflation Reduction Act without liberal priorities unrelated to climate change. The GOP's debt limit bill passed by the House which includes a phase-down of solar energy tax credit has met with strong resistance from the White House and Republicans concerned about the potential impact on their constituents.
UK savers can now invest in the first long-term asset funds (LTAFs) following over six years of research by the UK government and the financial regulator on pension fund diversification into illiquid assets such as roads, bridges, airports, and private equity. With stock market volatility, advocates for the infrastructure sector believe it is a potential alternative to equities offering an inflation hedge, low volatility, higher dividend yields based on inflation-linked revenue streams, and defensive capabilities. The LTAF's launch suggests it is time to invest in infrastructure. Infrastructure investment covers water, energy, roads, airports, education, border security, healthcare, and communication systems. Investments in schools, hospitals, and renewable energy generators can be considered lower risk than assets exposed to the economic cycle, says Gravis' Head of Energy and Infrastructure Ed Simpson. There is also potential to align the sector with environmental, social, and economic considerations, with key types of infrastructure playing a central role in building a greener future. The bullish infrastructure sector is looking to align with Biden's $1.2tn infrastructure law and the EU's Global Gateway investment programme. However, there are also uncertainties and risks associated with these assets; governments can be guided more by politics than economics, fall out with private partners, and change policies with elections.
MIT economics professor Daron Acemoglu has published a book called Power and Progress that examines the past millennium of technological progress, its imbalances and the need for proper incentives and regulatory safeguards to be put into place. While it was assumed neoliberal globalisation would always be beneficial, Acemoglu's research shows that major technological disruption such as the Industrial Revolution can flatten wages for an entire class of working people, involving distributional conflict and power dynamics. He argues capital takes what it wants in the absence of constraints and technology is a tool that can be used for good or ill. Acemoglu says it's not automatic and economists must remember this process as it can create growth but not enrich the masses.
Ford says Ontario will 'put more money on the table' to save Stellantis plant in Windsor
CBC
23-05-19 16:08
Ontario Premier Doug Ford has said the province will increase its offer in a bid to save the planned Stellantis EV battery plant in Windsor. Stellantis is constructing the NextStar plant, which's set to employ 2,500 people and open next year. The announcement follows claims by Stellantis of delays in negotiations with the Canadian government. However, Ottawa maintains the plant's future is secure. Plans for a Volkswagen plant near St. Thomas, Ontario, are also receiving significant incentives, adding to the predicament around the Windsor plant's establishment.
Premier of Ontario, Doug Ford, has stated that Ontario is willing to give additional funds to Stellantis and LG Electronics Canada to keep them in Windsor, Ontario to prevent the halting of construction at their battery plant. The dispute began over funding, with both firms stating that the Canadian government has failed to match billions of dollars in incentives offered in the US through the Inflation Reduction Act. The exact cost of matching the IRA for either factory is unpredictable, due to the US subsidies being tied to how many battery cells and modules will be produced; however, it is likely to cost between CAN7bn and CAN13bn ($5.61bn and $10.45bn). The Canadian government have responded that Ontario needs to pay its “fair share” of the deal. Discussions will continue until a resolution can be made.
The Ontario government has pledged to improve its financial package to Stellantis-LG Energy Solution to keep its $5bn electric vehicle battery factory in Windsor. Ontario Premier, Doug Ford, did not disclose the amount offered to the companies this week, yet this increased financial package will theoretically aid in preventing the plant from being lured away to the US states. Reports suggest this is following President Biden’s Inflation Reduction Act offering automakers huge subsidies. The plant being constructed in Windsor is scheduled to employ up to 2,500 people and was supposed to be opened early next year.
It is believed that Ottawa and Queen’s Park are under pressure to put together a more considerable subsidy for the plant as companies halted construction on Monday to obtain further subsidies that would match those offered to Volkswagen, which has a similar investment plan in St. Thomas. At present, the Canadian government’s production tax credits for Volkswagen in Canada is about $13.2 billion, which is the same amount that the carmaker could’ve received if they went to the United States. It is thought the tax deal for Volkswagen was a significant factor in luring the plant to Canada, which some say has helped secure Canada’s car industry for future production in electric vehicles.
Stellantis, which owns Jeep, Chrysler, Fiat, and Dodge, has declined to comment on the funding arrangement thus far. It should be noted that President Biden plans to provide US automakers a $100 billion overhaul towards electric vehicles to persuade reluctant American drivers to abandon petrol automobiles. This plan includes greater investments in charging stations and robust tax incentives.
Ontario is increasing its financial contribution in order to prevent automaker Stellantis from abandoning the construction of an electric vehicle battery plant in Windsor, Ontario. Although Stellantis and LG Energy Solution publicised a plan to build a $5bn factory last year, recent reports indicate that this plan has been prolonged due to the Canadian federal government failing to comply with bilateral agreements. The CEOs of Stellantis and LG Energy Solution wrote to Prime Minister Justin Trudeau indicating that they have not received subsidies initially agreed on. Canada offered Volkswagen a capital contribution of $700m and a production final offer of $13bn for similar production incentives.
Services exports from the UK have grown by 17.8% from 2016 to 2022, according to data from the Organisation for Economic Co-operation and Development, marking the strongest growth in the G7. While goods exports fell in the last quarter of 2022, leading economist Sophie Hale has labelled the rise in services export as a "boom" and equating the UK's growing ability to provide high-skilled professional and business services. The Bank of England has also revealed that approvals by banks to households for house purchase loans were at the highest in February since April 2015. This activity shows signs of stability for the UK's economy, with market experts stating that the growth reflects the value of the country’s service-based industries, including travel, education and banking.
John Podesta, adviser to President Joe Biden and ex-adviser to President Barack Obama, is tasked with unravelling an obstacle to the US's transition to carbon-free electricity – a bureaucratic permitting process for renewable energy projects. Podesta argues that environmentalists will have to accept the need for oil and gas production in the short term, or risk slowing the pace of change. A recent Brookings Institution analysis of federal data found that transmission lines can take up to seven years to be permitted, while natural gas pipelines can take less than half that time. Biden's proposed $1tn infrastructure bill, which has yet to pass through the Senate, includes measures to shorten federal permitting times.
Services exports from the UK have grown by 17.8% from 2016 to 2022, according to data from the Organisation for Economic Co-operation and Development, marking the strongest growth in the G7. While goods exports fell in the last quarter of 2022, leading economist Sophie Hale has labelled the rise in services export as a "boom" and equating the UK's growing ability to provide high-skilled professional and business services. The Bank of England has also revealed that approvals by banks to households for house purchase loans were at the highest in February since April 2015. This activity shows signs of stability for the UK's economy, with market experts stating that the growth reflects the value of the country’s service-based industries, including travel, education and banking.
UK carmakers warn that they are not ready for the "rules of origin" requirements for electric vehicles set out in post-Brexit trade agreements between the UK and the EU. From 2024, EVs traded between the UK and the EU must have 45% of their parts sourced from either region or face 10% tariffs. Carmakers may not be able to meet this requirement due to problems caused by the domestic supply chain and market competition. The UK currently lags behind Europe's 30 planned battery gigafactories and its electric automakers cannot rely on political help from Westminster.
Carbon removal, the process of transferring carbon dioxide from the Earth's atmosphere and storing it indefinitely in a safe location, is an emerging industry gaining interest from investors, buyers and policymakers. Unlike carbon stored in biological plants, which can be released when they are burned or cut down, CO2 that is artificially sequestered may stay sequestered indefinitely. This has led to the establishment of carbon removal projects such as Carbon Engineering and ClimeWorks which are attracting private capital. Carbon Engineering's direct air capture system can capture CO2 for between $94 and $232 per tonne when operating at scale, a significantly lower rate than previous estimates of $600 per tonne.
The boom in carbon removal practices is driven by technological advancements and government actions to reduce carbon emissions. A reasonable carbon price may make carbon capture and storage viable, though, for DAC to be profitable, the tax would need to be higher. As hydrocarbon-dependent economies still exist, government support is needed to bridge the gap between current and required carbon prices. Several billion dollars of America’s recently approved climate handouts fund the establishment of carbon capture programs, while an enhanced tax credit provides up to $85 per tonne of CO2 that is permanently stored.
Big tech companies, with deep pockets and a progressive image, are some of the early buyers of carbon removal, like Microsoft’s recent purchase of more than 2.7m tonnes of carbon captured from combustion and stored underground for 10 years with Equinor, Shell, and TotalEnergies. Carbon middlemen are also emerging, who act as a connector between projects and the buyers. Carbon removal projects are emerging as a necessary expenditure that requires public support to become a more profitable industry.
Foreign investment in Germany remained steady in 2022 despite the challenging economic situation, according to Germany Trade and Invest. The organisation revealed that 1,783 new settlements were established in 2022 — slightly fewer than 2021 but 101 more than in 2020. GTAI managing director Robert Hermann said the total is a “success” given the “adverse circumstances” and revealed the US was the largest investor with 279 projects. Switzerland took second place with 208 projects, followed by the UK with 170. China, which deployed 141 projects, fell to fourth place, while Turkey rounded out the top five places with a record 139 projects.
The Biden administration used the G7 summit in Japan to push the details of a US-led industrial policy around climate, particularly in the global south. This is a new approach, as the traditional Washington consensus model has focused on unfettered growth via deregulation and trade liberalisation. The administration aims to bring a greater coalition of nations into a new economic order, prioritising sustainability and equitable GDP growth, value incentive over capital and limit dangerous concentrations of power in any nation or company. This message was well received by the G7 nations and many others.
Australia could achieve carbon neutrality through a collaboration with the US on critical minerals mining. Iluka Resources is hoping to boost Australia’s refining capacity and expand mineral supply to the US through a government loan for building the Eneabba refinery in Western Australia. The facility will produce rare earth oxides, a vital element in adding strength to electric vehicle motors, wind turbines and defence applications. Erwin Jackson, policy director for the Investor Group on Climate Change stated that subsidies for renewable energy in the US are substantial, and so Australian investors are already prioritising clean energy projects there rather than in Australia.
The Centre for Strategic and International Studies has examined the path that the US will take in the growing clean hydrogen industry. The US government is currently in the early stages of its clean hydrogen development strategy and is already facing a critical decision juncture. The Inflation Reduction Act (IRA) introduced the 45V Hydrogen Production Tax Credit, which awards up to $3 per kg of hydrogen produced to projects with a lifecycle greenhouse gas emissions intensity of less than 0.45 kilograms per kilogram of hydrogen. Upcoming Treasury Department guidance will determine how emissions intensity of electrolysis-based hydrogen is calculated. Climate goals depend on clean hydrogen to eliminate the sector’s 100 million metric tons of CO2 emissions per year.
A coalition of academics, energy companies, and environmental organisations have presented a case for the strict implementation of the clean hydrogen tax credit, arguing that weak guidelines would lead to an increase in net emissions and result in the subsidisation of hydrogen with higher emissions intensity than current unabated natural gas-derived production methods. Deliverability would require electrolyzers to source clean electricity from within their same operating region. This limits the extent to which grid congestion might curtail the clean generation resource and drive a ramp up of a local fossil fuel resource to meet the electrolyzer demand. Lastly, hourly time-matching requires electrolyzers’ electric consumption to match clean energy production down to the hour.
Set against the international perspective, there is again a strong case for a phased-in tightening of standards. It has become increasingly clear that the short-term priority is to ramp up electrolyzer deployment in order to move down the electrolytic hydrogen cost curve. The long-term and ultimate priority is ensuring that hydrogen is truly clean via hourly matching of hydrogen production with clean electricity resources from the same market. If electrolytic hydrogen does not scale, the effectiveness of hydrogen as a decarbonisation pathway will be stifled, delaying emissions reduction for harder to abate industrial sectors.
The volume of foreign direct investment (FDI) into Germany is expected to drop this year due to the Biden administration’s Inflation Reduction Act. Record levels of FDI were seen in Germany in 2021, largely due to a rise in UK companies setting up operations in Europe’s largest economy to retain ties with the EU following Britain’s departure. Last year US, Swiss and UK investors led inward investments as China’s projects declined. The proposed IRA, which is designed to lure investment in clean technology towards the US, could affect investment in Germany and Europe.
The US government reports of improved relationships were made at trade meetings "when we don’t know what to do," as concrete deliverables seem to be fading, writes William Reinsch in Forbes. European Union (EU), Asia-Pacific Economic Cooperation (APEC) and Indo-Pacific Economic Framework for Prosperity (IPEF) trade meetings have lately focused heavily on relationship building, whereas we should look for more concrete achievement in a world where competing priorities are becoming increasingly complex, he suggests. Reinsch recommends full transparency from leaders discussing these issues if the US is to be best served.
