Energy and Climate Change
We are heading toward the merger of energy and finance instead of the substitution of one energy for another.
COP26 ended in overtime after more than two weeks in Glasgow. As with the Paris Agreement, a joint statement outlined measures to counter adverse climate effects, with no guarantee they will be more effective or enforceable than they were in 2015. For when we talk about climate change, we are really talking about energy. During the Covid recovery, rising energy costs have been the primary input stoking inflation, and they will in large part determine if current inflation is transitory.
Despite noble pronouncements of cooperation, we can reasonably expect that individual nations will continue to act in their own best interests when it comes to critical resources that allow their economies to grow and to prosper. The biggest emitters of greenhouse gases are the two largest developing economies, China and India. The targets they have set for themselves are distant in time, beyond the lifespans of many who attended COP26 except, perhaps, Greta Thunberg.
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