Limiting global warming and climate change requires a substantial reduction of CO2 emissions. Industrialized countries and oil-producing states have a special responsibility and importance in this regard due to their longstanding high per capita emissions.

However, an effective and efficient climate policy also requires these countries to include newly industrializing and developing countries in their emission reduction strategies.

International climate targets

At the Rio Conference in 1992, the principle of “common but differentiated responsibilities” of states in protecting the climate was established for the first time.

The United Nations Framework Convention on Climate Change adopted there stated that industrialization is the central driver…

Part 5 in our Putting a price on carbon series

In this installment of our series on carbon pricing, we take a closer look at carbon leakage — an issue that emerges from differences in carbon prices in an integrated global economy.

1 What is carbon leakage?

Carbon leakage is a term to describe the escape of emissions from one production or consumption site to another. It results from the differences in climate regulation or carbon prices between different jurisdictions — cities, states, countries, or regions.

It stems from consumers’ and producers’ inclination to prefer goods from locations or production in places with less strict rules or smaller carbon prices, making them cheaper. …

For quite some time, Turkey’s debt has been rising, its currency has been losing value, and inflation has been picking up. When I wrote about the Turkish economy in Q3 2017, the figures suggested the possibility of a boom.

But I also identified some challenges, including fighting inflation and restoring investor confidence. But like most prognosticators, I did not predict the COVID-19 pandemic, which now threatens to send the country over the edge into economic crisis.

Turkish lira loses value rapidly

The value of the Turkish currency has fallen sharply against the euro since 2018 and now is half of what it was at the…

In March 2021, the world’s largest economic stimulus package EVER was passed in the USA. The American Rescue Plan Act of 2021 provides $1.9 trillion to stimulate the U.S. economy.

Shortly after, Joe Biden presented an eight-year infrastructure program worth two trillion dollars. Added to this are the economic stimulus packages already deployed in 2020. All these measures will help not only the USA but the entire global economy. But they also entail risks for global economic development.

U.S. stimulus package boosts U.S. economy

The Spring 2021 economic stimulus packages include numerous measures. Included is a one-time payment of $1,400 for many citizens, an increase in…

In February, the EU published the “Trade Policy Review,” its new trade strategy. A month later, the “Integrated Review” by the UK was put forward, sketching what “Global Britain” means post-Brexit. The two strategies are similar in their diagnosis of what is going on in the world — yet differ when it comes to what to prioritize.

How to strategize — comparing apples with pears.

Comparing the “Integrated Review” and the “Trade Policy Review” is not entirely fair. They are two different documents with different levels of ambition. The Trade Policy Review is a 23-page document outlining the EU’s trade strategy (which we discussed here).

The Integrated Review…

Major events in 2021: Last year around this time, we wrote a blog post with the 11 events likely to change the world economy in 2020. Like everyone else, we missed the most important one: the COVID-pandemic. But we also got some stuff right: something was in the works with RCEP, the US election (OK, that wasn’t too difficult), and that the German EU-Council presidency would face a few challenging issues. So, we decided not to be discouraged and have another shot at prognosticating which events might shape 2021 — drumroll, please:

12 Major events in 2021

1) January 20: President-elect Biden takes office

Trump’s erratic presidency is almost over. On January…

In Europe and the US, the economy slumped massively across all sectors in March and April 2020. After that, a rapid recovery set in, suggesting a v-shaped economic cycle.

K shaped recovery: There was another economic slump with the onset of a second wave of infection starting in October 2020. This time, however, it hit different sectors with varying degrees of severity. Using Germany as an example, we describe the resulting K shaped recovery.

The service sector in the corona crisis — this time, it’s different

In previous major economic crises, the service sector came through the economic downturn relatively unhurt. This was also true in the financial and economic crisis of…

New EU trade strategy: On February 18, the European Commission launched its new trade strategy: “Trade Policy Review — An Open, Sustainable and Assertive Trade Policy.”

This is the first overall trade strategy since 2015. So, what is new in this new trade strategy? And is it really fit for the challenges that lie ahead?

Christian Bluth, author of Europe’s Trade Strategy for the Age of Geo-economic Globalization shares some thoughts, concerns, and a few suggestions.

A New Trade Strategy For A New World

The last EU trade strategy — “Trade for all” was published in 2015. Since then, the global economy has seen Brexit, Trump’s protectionist populism…