G20 backs Saudi Arabia’s circular carbon economy strategy

Prince Abdul Aziz bin Salman, the Saudi energy minister. (File/AFP)
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Updated 29 September 2020

G20 backs Saudi Arabia’s circular carbon economy strategy

  • Energy ministers from world’s leading economies endorse ‘holistic, integrated, inclusive and pragmatic approach to managing emissions’ 


DUBAI: Energy ministers from the G20 group of leading economies have endorsed Saudi Arabia’s approach to managing harmful greenhouse-gas emissions in the global campaign against climate change.

At the end of a two-day meeting organized by the Saudi G20 presidency in Riyadh, the ministers issued a communique acknowledging that the Circular Carbon Economy (CCE), the Kingdom’s contribution to the global environmental debate, offers “a holistic, integrated, inclusive and pragmatic approach to managing emissions that can be applied reflecting a country’s priorities and circumstances.”

They added that “by encompassing the broad range of pathways and options available, CCE takes into account different national circumstances, while striving to meet our shared global aspirations.”

CCE is an energy strategy that advocates the “three Rs” of environmentalism: reduce, reuse and recycle carbon products. Crucially, however, it adds a fourth R: remove, in an effort to eliminate harmful pollutants from the atmosphere.

The wording of the communique was debated by ministers during a lengthy closed session on Monday, under the chairmanship of Prince Abdul Aziz bin Salman, the Saudi energy minister. It is believed that some countries argued that more emphasis should be put on a general global reduction in the use of hydrocarbon fuels.

The final communique represents a success for the Kingdom’s stance that all energy sources, and technology solutions, should be deployed in the efforts to implement a “green” recovery from the economic ravages of the COVID-19 pandemic.

The energy ministers recognized “the key importance of reducing greenhouse-gas emissions, taking into account system efficiency and national circumstances, including its specific resources endowment and its political, economic, environmental, social and risk-informed development contexts,” they said.

During the virtual meeting, their second this year, they also highlighted the importance of energy security and market stability as part of the economic recovery strategy. The Energy Focus Group of the G20 “discussed a range of measures, including the adjustment of energy production, monitoring of consumption and supply reserves, and data transparency.”

Its work highlighted the importance of sustained capital investments to support short- and long-term global energy security and stability. Some experts fear that investment in new energy sources could be affected by low energy prices.

“We emphasize the need to prevent supply disruptions and promote open, free, flexible, transparent, competitive, stable and reliable international energy markets, and stress the importance of diversification of energy sources, suppliers and routes,” the ministers said.

They also noted that “the world is not on track to meet universal energy access and eradicate the impacts on vulnerable communities and meet our sustainable-development goals.”

In 2018, about 2.8 billion people still lacked access to clean cooking facilities, and nearly 800 million people had no electricity, while many more had limited or unreliable access, the ministers noted.

Saudi Arabia holds the presidency of the G20 this year. The group’s annual Leaders’ Summit is due to be held in Riyadh in November.
 


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.