Business returns

Is the worst economic crisis of modern times really over? Though there are risks to the downside, the latest OECD Economic Outlook points to a recovery taking hold. If growth staggered somewhat in the second half of 2010, it was partly because world trade slowed from exceptionally high growth rates earlier in the year, the upturn in the inventory cycle is easing and many governments began unwinding their fiscal stimulus, and in some cases, cutting spending to control burgeoning deficits. However, private investment looks set to take over, with business investment likely to become more robust.

Ten trillion well spent

The IEA has a message for all the negotiators in Copenhagen: keep on doing things the way we’re doing them now and catastrophe is just around the corner. That’s the stark conclusion from the latest World Energy Outlook, released in London on 10 November. “Continuation of current trends in energy use puts the world on track for a rise in temperature of up to 6°C and poses serious threats to global energy security” according to the IEA.
The reference scenario sees demand increasing by 40% between now and 2030, and pollution would worsen, with fossil fuels accounting for over three-quarters of the extra demand. The good news is that it would only take $10.5 trillion over the next 20 years to keep the temperature rise below 2°C.
If that sounds exorbitant even in these days of trillion dollar financial rescue packages, the IEA calculated that energy bills in transport, buildings and industry alone would be reduced by $8.6 trillion. And in addition to avoiding severe climate change, this cost would also be offset by other economic, health and energy-security benefits.