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Tag Archives: Climate Change

Steven Koonin’s “Unsettled”

Goodreads rating: 4.39. The book offers a brief tour of the physics behind climate change and the role played by human activity; a skeptical discussion of climate models; some stronger, some weaker examples of distorted reports, by scientists and the media, regarding causal links between human activity, climate change, and extreme weather events, sea level change, or production (opponents claim that these examples are cherry-picked; Koonin retorts that scientific reports should be...

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Climate Change and Cheap Clean Energy

John Cochrane on the role of cheap clean energy which by itself will not reduce CO2 in the long run: The standard vision in policy discussions assumes infinite substitutability. As soon as the cost of clean energy is lower than the cost of carbon-emitting energy, everyone substitutes completely to the latter and the oil and coal stay in the ground. … But as long as the elasticity of substitution is finite … then the carbon comes out of the ground. As you use less and less, the...

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Climate Change and Financial Stability

John Cochrane on climate change and financial stability: Climate change and financial stability are pressing problems. They require coherent, intelligent, scientifically valid policy responses, and promptly. But climate financial regulation will not help the climate, will further politicize central banks, and will destroy their precious independence, while forcing financial companies to devise absurdly fictitious climate-risk assessments will ruin financial regulation. The next...

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Green Returns

In the NBER working paper “Dissecting Green Returns,” Lubos Pastor, Robert Stambaugh, and Lucian Taylor argue that excess returns on green assets during recent years are unlikely to predict expected excess returns. At least that’s what theory suggests: … green assets have lower expected returns than brown, due to investors’ tastes for green assets, yet green assets can have higher realized returns while agents’ tastes shift unexpectedly in the green direction. … green tastes can...

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FX Daily, May 24: China Action on Commodities and Crypto Featured

FX Rates Overview: The US dollar is firmer in the European morning after starting out with a softer bias in Asia Pacific turnover. The dollar-bloc currencies, sterling, and the Swiss franc are heavy, but ranges are narrow, and consolidation seems to be the flavor of the day. Central and Eastern European currencies are faring best among emerging markets, but the JP Morgan Emerging Market Currency Index is little changed. Benchmark 10-year yields are also hovering...

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Godfrey Bloom: “The great central banking experiment has failed.”

These days, most mainstream news reports are being monopolized by the pandemic, the covid vaccine and all the new rules and lockdowns that are being enforced across the Western world, and this near-obsessive focus comes at the expense of a lot other important developments. The last story that managed to “dethrone” covid from the headlines was the US Presidential election, and even that reporting was largely through the prism of the pandemic. And yet, the earth hasn’t actually stopped...

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US election: Red flags for investors

Part II of II Outlook and wider impact As showcased during the debates and in the entire campaign rhetoric, politicians in the US but also in Europe, are solely focused on promoting solutions that only serve to paper over the problems and address the symptoms of the disease. From “covid checks” to rent relief, and everything in between, all their proposed “fixes” are only providing some temporary breathing room to those millions of citizens affected by the economic...

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US election: Red flags for investors

Part II of II Outlook and wider impact As showcased during the debates and in the entire campaign rhetoric, politicians in the US but also in Europe, are solely focused on promoting solutions that only serve to paper over the problems and address the symptoms of the disease. From “covid checks” to rent relief, and everything in between, all their proposed “fixes” are only providing some temporary breathing room to those millions of citizens affected by the economic shutdown and...

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Economic Aspects of the Energy Transition

In an NBER working paper, Geoffrey Heal discusses some aspects of the energy transition to come. On infrastructure investments: the likely net investment required to go carbon-free is now as little as $0.179 trillion renewable power from wind and solar PV plants is now less expensive than power from gas, coal or nuclear plants … If it were not for the intermittency of renewables, we would save money by converting to clean power. the social benefits from stopping the CO2 emissions...

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Nordhaus on Climate Change

In his Nobel lecture (reprinted in the June issue of the American Economic Review), William Nordhaus concludes that we should focus on four goals: First, people around the world need to understand and accept … Those who understand the issue must speak up and debate contrarians who spread false and tendentious reasoning. … Second, nations must establish policies that raise the price of CO2 and other greenhouse-gas emissions. … Moreover, we need to ensure that actions are global and not...

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