Connect with us

Economy

COVID-19 has sucked the oxygen out of the room on the climate economy – CBC.ca

Published

 on


The Niagara Falls of news releases into any journalist’s in-box attest that there is always plenty of contention for the moving spotlight of media attention.

As early as March of this year, the Pew Research Institute, a think-tank that studies media trends, observed that people had become “immersed in COVID-19 news.”

And while other issues have occasionally nudged the pandemic and its economic impact off centre stage, it is hard to think of many subjects that have so consistently hogged the limelight for so many months in a row.

According to one of Canada’s leading environmental economists, that single-minded focus has both diverted and delayed attention on a subject that he expected in 2020 would finally get its moment in the sun: climate change.

Shut out by pandemic

“For two months or even three, people like me were shut right out because ministers were dealing with aspects of COVID in cabinet,” said Mark Jaccard, one of Canada’s foremost climate scientists who is often described as an architect of the pioneering carbon-pricing scheme introduced by the B.C. Liberals back in 2008.

With what may have turned out to be bad timing, the Simon Fraser University professor’s political manual, The Citizen’s Guide to Climate Success, finally hit bookstores in February — just before the pandemic began to dominate the news agenda.

While inevitably disappointed, the longtime adviser to governments on practical climate economic policy remains philosophical. Jaccard’s biggest idea — one that some climate activists may find frustrating — is that the only realistic path to defeating climate change is political action to install “climate-sincere” politicians and governments and then hold their feet to the fire.

This was supposed to be a year of climate action in Canada, but Chief Public Health Officer Dr. Theresa Tam, left, gets more recognition points than Minister of Environment and Climate Change Jonathan Wilkinson. (Blair Gable/Reuters)

While personal attempts to eat less meat, say, or buy an electric car make individuals feel good about themselves and may influence a few others, Jaccard insists that the short-term economic advantages of adding carbon to the atmosphere are so lucrative that they require concerted government action to push things the other way.

And putting political pressure on governments means garnering media and public attention, something harder to do when the whole world is worried about something that seems far more pressing — namely a deep economic recession caused by a deadly health crisis that just won’t go away.

“You have policy windows,” Jaccard said, referring to those moments such as after Hurricane Katrina, which struck New Orleans and the surrounding area in 2005, or following the past year’s devastating forest fires in Australia and the U.S. west, when the public and politicians are forced to take climate issues seriously.

He said COVID-19 is just the 2020 version of a series of global events that have redirected attention away from the climate change issue just as it was beginning to take off.

‘We got really excited’

“We got really excited about the Kyoto Protocol in the late 1990s, and then along came 9/11 — and everyone got diverted with the U.S. wanting to invade countries in the Middle East,” Jaccard said, referring to terrorist attacks on the United States on Sept. 11, 2001.

“And then you could say the same thing when we got excited about Hurricane Katrina, and you had Republicans and Democrats in the mid-2000s putting together policy … and China started to say, ‘Uh-oh we better get going.’ And then along came the [2008] financial crisis.”

As the world, and especially Canada, seemed to be getting the pandemic under control during the summer, climate advocates were hoping their issue would come to the top of the agenda. But subsequent waves of the disease once again pushed COVID-19 stories to the top of the “most read” columns, narrowing the news hole for climate coverage.

While political analysts were expecting a nod to green spending in Monday’s fiscal update, they say short-term allocations will mostly be diverted, quite reasonably, to bailing out parts of the Canadian economy devastated by a new round of pandemic lockdowns.

Farmers use fire to clear land in the Amazon basin. Economist Mark Jaccard says schemes to lock carbon in biological systems does not guarantee it will stay there for the long term. (Rickey Rogers/Reuters)

Jaccard says that has added to delays, as the latest government plan — to use post-pandemic economic recovery spending to advance the green agenda in a way that will finally put Canada on a path to Paris 2030 — has meant previous policy plans and spending have been deferred.

Despite the latest postponement, Jaccard remains hopeful. Conversations with conservatives have left him with the impression that even a change of government would not prevent Canada from moving forward on the climate change agenda.

And while he thinks the Trudeau government remains “climate-sincere,” he says media attention is essential to keep pressure on the Liberals not to spend too much money on political feel-good plans, such as tree planting, at the expense of real measures to cut carbon output. As The Economist reported recently, growing trees in one place doesn’t mean they aren’t being cut down elsewhere, and natural systems tend to return their carbon back to the atmosphere.

“If you’re allowing someone to keep polluting and then you’re sort of convincing yourself that you have offset that or compensated it,” Jaccard said, “the careful evidence doesn’t support that.”

Part of Jaccard’s continued optimism is due to the election of what looks like a climate-sincere Democratic government south of the border that — even without the support of a Republican Senate — can begin to make greenhouse gas-limiting regulations.

The election of a Joe Biden presidency may have created a new “policy window,” he said, as the U.S. moves toward existing Canadian schemes such as the coal phaseout regulation, where Canada is a leader. Meanwhile, Jaccard expects a U.S. push toward such things as the clean fuel standard, which will coax Canada into following suit as manufacturers insist on one set of rules for all of North America.

Follow Don Pittis on Twitter: @don_pittis

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Canadian retail sales jump in November, but December looks gloomier

Published

 on

december retail sales

By David Ljunggren

OTTAWA (Reuters) – Canadian retail sales jumped by much more than expected in November, but preliminary figures for December suggest a sharp drop as novel coronavirus restrictions were re-imposed, Statistics Canada said on Friday.

Food and drink sales rose by 5.9% and helped push overall retail trade up by 1.3%, its seventh consecutive monthly gain and significantly greater than the 0.1% increase predicted by analysts in a Reuters poll.

Most retail businesses were open in November but as the second wave of the coronavirus spread, many provinces imposed clamp downs. Statscan said December retail sales looked set to drop by 2.6% but stressed this was a preliminary estimate.

“The expected tumble in December retail sales following the pop in November conforms to the Bank of Canada‘s outlook, which sees weakness at the turn of the year,” said Ryan Brecht, a senior economist at Action Economics.

The Bank of Canada forecast on Wednesday that the economy would shrink in the first quarter of 2021 due to the impact of temporary business closures.

Shortly after the data were released the Canadian dollar was trading 0.5% lower at 1.27 to the greenback, or 78.74 U.S. cents, with the currency giving back some of this week’s gains as oil and global shares fell.

Statscan is due to issue November GDP data on Jan. 29 and Royce Mendes, a senior economist at CIBC Capital Markets, said the agency’s flash estimate of 0.4% growth still seemed reasonable. The estimate was released on Dec. 23.

Overall November sales were up in 7 of 11 sub-sectors, representing 53.4% of retail trade, while in volume terms, retail sales rose 1.2%.

 

(Reporting by David Ljunggren in Ottawa and Fergal Smith in Toronto; Editing by Ken Ferris)

Continue Reading

Economy

Biden's rescue plan will give U.S. economy significant boost: Reuters poll – TheChronicleHerald.ca

Published

 on


By Indradip Ghosh and Richa Rebello

BENGALURU (Reuters) – U.S. President Joe Biden’s proposed fiscal package will boost the coronavirus-hit economy significantly, according to a majority of economists in a Reuters poll, and they expect it to return to its pre-COVID-19 size within a year.

Biden has outlined a $1.9 trillion stimulus package proposal to jump-start the world’s largest economy, which has been at the epicenter of the COVID-19 pandemic having lost over 400,000 lives, fueling optimism and sending Wall Street stocks to record highs on Thursday.

Hopes for an upswing in U.S. economic growth, helped by the huge stimulus plan, was reflected in the Jan. 19-22 Reuters poll of more 100 economists.

In response to an additional question, over 90%, or 42 of 46 economists, said the planned fiscal stimulus would boost the economy significantly.

“There are crosswinds to begin 2021 as fiscal stimulus helps to offset the virus and targeted lockdowns. The vaccine rollout will neutralize the latter over the course of the year,” said Michelle Meyer, U.S. economist at Bank of America Securities.

“And upside risks to our…growth forecast are building if the Democrat-controlled government can pass additional stimulus. The high level of virus cases is extremely disheartening but the more that the virus weighs on growth, the more likely that stimulus will be passed.”

For a Reuters poll graphic on the U.S. economic outlook:

https://fingfx.thomsonreuters.com/gfx/polling/oakveynqovr/Reuters%20Poll%20-%20U.S.%20economy%20outlook.png

The U.S. economy, which recovered at an annualized pace of 33.4% in the third quarter last year from a record slump of 31.4% in the second, grew 4.4% in the final three months of the year, the poll suggested.

Growth was expected to slow to 2.3% in the current quarter – marking the weakest prediction for the period since a poll in February 2020 – amid renewed restrictions.

But it was then expected to accelerate to 4.3%, 5.1%, 4.0% in the subsequent three quarters, a solid upgrade from 3.8%, 3.9% and 3.4% predicted for those periods last month.

On an annual basis, the economy – after likely contracting 3.5% last year – was expected to grow 4.0% this year and 3.3% in 2022, an upgrade from last month.

For a graphic on Reuters Poll – U.S. economy and Fed monetary policy – January 2021:

https://fingfx.thomsonreuters.com/gfx/polling/azgpoljbkvd/U.S.%20economy.PNG

Nearly 90%, or 49 of 56 economists, who expressed a view said that the U.S. economy would reach its pre-COVID-19 levels within a year, including 16 who expected it to do so within six months.

“Even without the stimulus package, we had already thought the economy would get back to pre-COVID levels by the middle of this year,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets.

“With the new stimulus package there will be more direct money in people’s pockets, easily boosting the economy, provided a vaccine rollout progresses in a constructive manner.”

But unemployment was not predicted to fall below its pre-pandemic levels of around 3.5% until 2024 at least.

When asked what was more likely for inflation this year, only one said it would ease. The other 40 economists were almost evenly split between “a significant pickup” and price pressures remaining “about the same as last year.”

Still, the core Personal Consumption Expenditures (PCE) price index – the Federal Reserve’s preferred inflation gauge – was forecast to average below the target of 2% on an annual basis until 2024 at least, prompting the central bank to keep interest rates unchanged near zero over the forecast horizon.

“I don’t think it will be an increase in underlying (inflation) trend, it is sort of a rebound in prices that have been depressed during the pandemic,” said Scott Brown, chief economist at Raymond James.

(For other stories from the Reuters global long-term economic outlook polls package:)

(Reporting by Indradip Ghosh and Richa Rebello; Additional reporting by Manjul Paul; Polling by Mumal Rathore; Editing by Rahul Karunakar and Hugh Lawson)

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

The U.S. economy likely grew 4.1% at the end of 2020, but GDP seen masking weakness in some sectors – MarketWatch

Published

 on


The U.S. economy may have grown about 4% in the final three months of 2020, a great showing even in the best of times.

These are not the best of times.

The economy still has lots of ground to make up, for one thing, after the deepest recession on record. And growth slackened off toward the end of 2020 after the coronavirus pandemic roared back and caseloads reached a record high, pointing to a loss of momentum in the economy early in the near year.

Read: The U.S. lost 140,000 jobs in December. How bad was it?

The U.S. fourth-quarter report on gross domestic product, due on Thursday, will still offer a useful diagnosis of the economy. It will tell us which parts have mostly recovered and which are still ailing.

Wall Street
DJIA,
-0.57%

economists polled by the Dow Jones/The Wall Street Journal predict a 4.1% increase in fourth-quarter GDP on an annualized basis. While that would mark a steep drop from the 33.4% increase in the third quarter, it still shows the economy forging ahead even as the coronavirus pandemic spiked again.

The details are unlikely to look quite as good.

The biggest component of the U.S. economy, consumer spending, almost certainly softened to mediocre 3% growth or less. Most government aid for the economy had faded away by the start of the quarter and businesses facing new government restrictions laid off more workers at the end of the year.

Business investment in structures such as oil rigs or office buildings was also weak.

Other drags on the economy included lower state and local spending and a bigger international trade deficit.

The economy got some sizzle from a surprising boom in the housing market. Low mortgages rates and people seeking more space outside the cities have lifted sales of previously existing homes to a 14-year high.

Businesses also started to rebuild their inventories — goods for future sale, that is — after letting them draw down early in the pandemic. That’s a good sign for 2021 since it suggests companies are expecting stronger sales.

Indeed, a pair of surveys of business executives in January suggest companies are banking on a better 2021, mostly because of rollout of coronavirus vaccines.

How soon the vaccinations levels are high enough to really help the economy, however, is still an open question.

Read: Fauci says two more COVID-19 vaccines could be approved within ‘weeks’

“We only expect vaccination rates to be high enough to accelerate the economic recovery from mid-2021 onward,” said Cailin Birch, global economist at The Economist Intelligence Unit.

The promise of more federal financial aid from the Biden White House is also adding to the optimism, but the stimulus could take awhile to reach households and businesses. It’s also unclear how much aid Congress will approve.

What could also help the economy after a rocky start in the new year is rising consumer confidence. Americans historically spend more when they are confident and push the economy to greater heights.

A pair of surveys this coming week, consumer confidence and consumer sentiment, will give another glimpse into whether the hopes inspired by the vaccines are outweighing the angst caused by the record number of coronavirus cases.

Let’s block ads! (Why?)



Source link

Continue Reading

Trending