by Andy Beharrell and John Sloman

Trading away global warming

A number of high profile climate conferences (UN climate change convention in Buenos Aires (Dec. 2004) and the UK climate change conference in Exeter (Feb. 2005) (see also and also) have further raised the profile of global warming, related environmental issues and the role of the Kyoto protocol. The Exeter conference has been told that we may have underestimated the speed at which the polar ice caps are melting and it is thought that over 13,000 sq. km of sea ice in the Antarctic Peninsula has been lost over the last 50 years. Under the Kyoto protocol industrialised countries have committed to cut their combined emissions to 5% below 1990 levels by 2008 – 2012. Each country that signed the protocol agreed to its own specific target. EU countries are expected to cut their emissions by 8% and Japan by 5%. Some countries with low emissions were permitted to increase them.

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2004 – the year China came out?

The fact that 2004 saw the first ever Chinese Grand Prix may have more significance to motor racing fans than to economists, but it was yet another indication of the emergence of China as a world economic power. The sheer scale of the country and its appetite for resources can be astonishing. In 2003 half the concrete poured in the world was poured in China. Chinese oil imports rose by 30% to make them second only as an oil importer to the USA. 30% of the coal and 36% of the steel used in the world was used in China, and the list goes on. Their appetite for resources seems insatiable, driven by some of the highest levels of GDP growth in the world. With growth at around 9.7% in 2004 and showing few signs of faltering significantly, these figures will only get bigger.

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Red is the new black

In a triumphant ceremony on 20 January 2005 George Bush was inaugurated for a second term. However, once the celebrations were over, it was back to the Oval Office to tackle a difficult economic situation. On the face of it, prospects seem very positive. US GDP growth in the fourth quarter of 2004 was 3.1%, down from 4% in the third quarter, but still a respectable performance. Growth for the whole of 2004 was set to be 4.4%, the best performance since 1999.

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Aiding trade?

The tragic news on Boxing day of the tsunami that struck many parts of Asia, brought issues of trade, aid and poverty sharply into focus in the world's media and generated an unprecedented public response which governments struggled to keep up with. Tony Blair has pledged to use the UK presidency of the G8 in 2005 to try to reduce poverty and increase aid to Africa. Gordon Brown too has been trying to kick start debt forgiveness programmes, partly for the countries affected by the Tsunami, but also more generally for other highly indebted countries. For details of the economic impact of the tsunami, have a look at the BBC site.

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