Let China Pay the Cost of Solar Energy and Electric Vehicles

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June 28, 2024 — Lethal heat waves this month hit the US and other regions throughout the Northern hemisphere, including India and the eastern Mediterranean.  June will probably mark the 13th consecutive month of average global temperatures that exceed all observations in records going back to 1850.  The primary explanation is, of course, that emissions and concentrations of Greenhouse Gases (GHGs) have in recent years increased even more rapidly than had been feared.

  1. A pleasant surprise

In one area, however, progress in the fight against global climate change has been greater than had been expected.  Use of solar power and other sources of renewable energy in the US and the European Union has risen rapidly.  The beginnings of an historic shift from internal combustion engines to electric–powered vehicles (EVs) have multiplied the importance of the switch to solar and wind sources of electric power. read more

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The dollar as an international reserve currency

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June 25, 2024 — A paper co-authored by Menzie Chinn, Hiro Ito, and me has just been published at the JIMF.  It finds that US size, the ability of the dollar to hold its value, and inertia continue to support the dollar’s #1 status as an international reserve currency.  And that the threat of sanctions against other countries has yet to impact aggregate global $ holdings by central banks.  (Ungated WP version.)

Chinn, Frankel and Ito: “The Dollar versus the Euro as International Reserve Currencies” read more

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EU Carbon Border Adjustment Could Facilitate a Global Climate Solution

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May 27, 2024 — The European Union’s Carbon Border Adjustment Mechanism (CBAM) has begun asking EU importers to report data on emissions of greenhouse gases by their foreign suppliers (direct, but also indirect, i.e., embodied in the electricity they use).  The first round of reports were due January 31 of this year.  European importers are required by July to have established access to the data on emissions embedded in their suppliers’ products. The full CBAM regime, with European penalties against imports from countries that don’t price carbon as the EU does, will go into operation on January 1st, 2026.   It will have a major impact on producers of carbon-intensive products among EU trading partners. read more

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