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Recession, climate and energy
The impact of the global economic crisis, which would probably not be fully behind us for another four to five years, combined with factors like global warming and dwindling fossil fuel reserves is already busy transforming the world as we know it.
Well known and respected futurist and strategic planner Clem Sunter recently said that when the recovery comes the “game would have changed in several critical ways”.
A recent report in the New York Times recorded how American military and intelligence agencies are increasingly coming to the conclusion that “the changing global climate will pose profound strategic challenges to the United States in coming decades, raising the prospect of a military intervention to deal with the effects of violent storms, drought, mass migration and pandemics”.
In many parts of the globe, a new energy regime and the face of sectors like public transport is in the process of fundamental change, not only driven by the need to cut back on the emission of global warming gasses, but also to reduce dependence on dwindling fossil fuel recourses.
Evidence is also mounting that the world is moving away from the American dominated world that emerged after the collapse of the Soviet Union and the bi-polar world of international relationships that the Cold War represented. Increasingly, China, also in some respects in conjunction with other so-called emerging nations, is stepping to the fore as a power to be reckoned with.
This is especially true on the economic front, where it has become common knowledge that the world’s economy, including America, has to be saved firstly by China, or with countries like India and others in it’s slipstream.
On the business/economic front, governments have become so deeply involved with rescue packages and the like that it will take many years, if ever, that they would again leave it to market forces to take care of the economic development. We are clearly heading for a world where there is going to be much more regulation and control, while the role played by speculators in world markets are also set to come under closer scrutiny.
It is also unlikely that the days of carefree credit and the belief that eternal growth will take care of things will return for many years to come. It can also be expected that there will be much stronger control over the captains of business and industry and especially over financial institutions.
In July, as top level representatives of China and America met for talks in Washington on the economic crisis, President Barack Obama brought the new importance of China to light when he said that the United States sought a new era of “co-operation, non confrontation with China” and that management of the US-China relationship would be a major factor in defining the history of the 21st century.
Some commentators describe China as already the second largest economy in the world, while others put the country in third spot. The fact is that China has the largest foreign holdings in the US, standing at a more than massive $801 billion.
To what extent the American economy has become vulnerable to how the Chinese manage their economy, was also well illustrated in July when American stocks declined sharply on the back of the news that major Chinese banks planned on cutting back on lending.
China is also by far not the only new kid on the block making its presence felt. South Korea’s Hyundai car brand has just replaced Ford as the forth largest manufacturer of automobiles in the world.
Increasingly, and from a wider circle, questions are being raised on the dominance of the U.S. dollar in the world economy.
A top adviser to the Indian government added his voice to China and Russia in calling for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations.
It is also not only on the economic front that there are signs of the changing power relationships in the world. Forty years after the US landed a man on the moon, China is racing ahead to put a human on the moon before the Americans can repeat the feat. Both nations are aiming for 2020 as the year for another manned moon landing.
In his recent presentation to business leaders Sunter said, “Energy saving will be the next big thing”. On 2 August, Nissan unveiled its first mass-produced electric car, the Leaf. The car is due for release in Japan and the US next year, with Europe to follow in 2011 and other markets the following year.
More and more major cities throughout the world are rolling out initiatives to utilise bicycles as part of their public transport system. The schemes launched in Lyon and Paris in France, Brussels, Vienna, Cordoba and Girona in Spain, London, Dublin, Sydney and Melbourne in Australia and in a number of US cities, are not without problems, of which theft and vandalism is the most important.
Figures coming out of Paris show that bicycles are becoming much more than just a tourist novelty. Since the launch of the scheme as a private/public partnership some 18 months ago, the 20 000 specially designed bicycles have been used 42 million times and while the average trip lasts only 30 minutes, each bike travels about 10 000 km per year.
In South Africa, the focus on bicycles at this stage is aimed mainly at the rural and peri-urban areas as a means of providing affordable transport under the Departments of Trade and Industry and Transport’s Shova Kalula or Ride Easy programme. The idea was first mooted in 2001, but in July of this year the departments were still in discussions regarding the “market and viability of establishing a bicycle manufacturing or assembly plant”.
The need to find alternative sources of energy to generate electricity is also a popular topic regarding international relations – from plans to setup wind farms in the Egyptian desert that would feed into electricity networks in Europe to joint electricity generation projects in southern Africa.
There was also news about the possible up-scaling of co-operation between South Africa and Germany in the fields of energy efficiency and renewable energy.
It is also becoming increasingly clear that economic measures like steeply escalating electricity tariffs from Eskom will force South Africans in the direction of alternative energy sources like solar water heaters.
In line with the view expressed by Clem Sunter, Dr. Bob Scholes of the Council for Scientific and Industrial Research (CSIR) recently said that the big drivers of the global economy in the first half of this century would be energy efficiency and low energy intensity products.
