Daily Update: A Shattered Global Order Appears Ill-Equipped To Tackle Global Issues
Today is?Tuesday, March 19, 2024, and here’s your?curated selection of essential intelligence on financial markets and the global economy?from?S&P Global.?Subscribe?to be notified of each new?Daily?Update.?
The challenge is clear: to transition the world economy from dependence on fossil fuels while maintaining a viable and improving standard of living for developing and developed countries. Should the world fail to meet that challenge, climbing global temperatures will result in increasingly unpredictable and extreme weather, rising sea levels, forest fires, loss of arable land and large-scale migrations, among other impacts. The global and shared repercussions of increased emissions mean that no country is immune to climate change. The world has never required such unanimity and shared purpose, yet it is fragmenting. Global institutions have been weakened, wars have broken out, international relations have soured and developing nations feel aggrieved and ignored.?
As part of S&P Global’s latest Look Forward report on the Multidimensional Transition, Carlos Pascual, senior vice president of geopolitics and international affairs at S&P Global Commodity Insights, offers insight and analysis of geopolitics in “A shattered global order: Hard truths for energy and climate.”
Achieving an energy transition from carbon-intensive fuels will require massive investments of capital and technology. By some estimates, global capital flows must double or triple to transform energy systems, with much of that capital focused on the needs of developing nations. With 80% of the world’s population located in the developing countries of the Global South, climate adaptation alone will require an additional $200 billion to $300 billion annually. While some international organizations and countries, such as the Organisation for Economic Co-operation and Development and the United Arab Emirates, have pledged billions of dollars in funding for projects in the developing world, more remains to be done. However, as trust in international institutions erodes and geopolitics becomes more conflictual, many countries are reluctant to allow capital and technology to flow to perceived antagonists.
The US has historically been a stalwart of the international order. However, because of an increasingly volatile US political landscape, the world hesitates to count on US policy to remain consistent beyond the elections of 2024. The decarbonizing incentives of the Inflation Reduction Act remain popular in Republican and swing states such as Texas, North Carolina, Georgia, Ohio and Florida, meaning that decarbonization will not end in the event of administrative change. But attempts by Presidents Xi Jinping and Joe Biden to reestablish stable relations between China and the US may face difficulties. In addition, support for Ukraine in its war with Russia and for NATO could evaporate.?
The wars in Ukraine and Gaza look to continue, with no appetite from any party for diplomatic resolution. Both wars have destabilized supply chains and led to price inflation in countries thousands of miles away. Every additional person killed, wounded or maimed in these conflicts makes an eventual peaceful resolution and further international cooperation that much more difficult. Capital cannot fund new energy infrastructure when it is already being spent destroying the old infrastructure, as has happened in Ukraine and Gaza.
Today is Tuesday, March 19, 2024, and here is today's essential intelligence.
Written by Nathan Hunt.
Economy
Global PMI Signals Faster Economic Growth Amid Steady Price Gains
S&P Global's PMI surveys indicated that the global economy gained further growth momentum in February. At an eight-month high of 52.1, against 51.8 in January, the headline PMI covering manufacturing and services over 40 economies has now risen for four consecutive months. The gathering upturn points to an encouraging start to the year, albeit with the PMI remaining below the survey's long-run average of 53.2.
—Read the article from S&P Global Market Intelligence
Capital Markets
Balancing Defense with Growth (Part II): The S&P Quality Developed Ex-US LargeMidCap
As investments in artificial intelligence continue to boom, major indices in the US, Europe and Japan have hit all-time highs. Our previous blog reviewed how the S&P US Quality Indices outperformed their corresponding benchmarks over both the short and the long term. Similarly, a quality premium also exists in developed ex-US equity markets.
—Read the article from S&P Dow Jones Indices
Global Trade
领英推荐
US LNG Cargoes Continue To Set Sail Around Cape Of Good Hope In March
Although drought-related restrictions have improved slightly at the Panama Canal since the start of the year, the proportion of US LNG exports being sent round the Cape of Good Hope remains elevated in March as attacks on commercial shipping in the Red Sea force shippers to take the longer route to Asia. Of the total US exports of 3.33 million mt delivered in March thus far, around 710,000 mt were delivered into Asia, with all volumes transiting through the Cape of Good Hope to reach their destination, according to data from S&P Global Commodity Insights.
—Read the article from S&P Global Commodity Insights
Sustainability
Infographic: US Renewables Tracker
US clean energy generating capacity is rapidly growing as utilities and companies focus on the energy transition. The market share of renewables significantly differs by region based on available resources with more wind in the central plains and more solar in the south. However, battery storage is gaining traction nationwide and is usually attached to new solar projects.
—Read the article from S&P Global Commodity Insights
Energy & Commodities
Listen: What's Next For Oil Following China's Announcement Of Its 2024 Targets?
Economic power-house China has set out 10 targets for 2024, which is pro-growth for oil demand, keen on energy security and prioritizing accelerated industry modernization and development of new productive forces. In this episode of Platts Oil Markets podcast, Wanda Wang, managing editor for refined oil products, has invited China experts Grace Lee, Asia analyst from the AltView team; Sijia Sun, associate director for China oil market; and Oceana Zhou, oil market specialist, to discuss the oil-market related highlights following China’s "Two Session" meetings — the biggest annual political gathering in the country, which happened over March 4-11.
—Read the article from S&P Global Commodity Insights
Technology & Media
Your Three Minutes In AI: The EU AI Act Could Become A Global Benchmark
The EU AI Act establishes a regulatory framework for restricting and limiting AI use that will likely influence companies and regulators across the globe. The legislation, which is the first major framework of its kind, employs a human-centric and risk-based approach to manage AI systems' safety, and includes measures designed to ensure systems are transparent, traceable, non-discriminatory, environmentally friendly and aligned with fundamental rights.
—Listen and subscribe to MediaTalk, a podcast from S&P Global Ratings
?? Unity in action can turn tides - as Aristotle hinted, the whole is greater than the sum of its parts ?? Let's be the change! #ClimateAction #TogetherStronger