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Duke Energy CEO on Working With Joe Biden on Climate Change

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Duke Energy CEO on Working With Joe Biden on Climate Change

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(Miss this week’s Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, Jan. 24; to receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)

We might finally get infrastructure week. The election of Joe Biden and the subsequent twin Senate election victories in Georgia, which gave Democrats a narrow majority in both houses of Congress, have raised hopes that the next four years will see substantial investment in renewable energy, storage technology and electric-vehicle infrastructure. Tactically, Biden’s approach is to link green investment to job creation and economic recovery: Earn union-level wages making solar panels! And independent of federal policy, there is both growing consumer demand and private-sector investment in more sustainable products, as evidenced by Tesla’s $800 billion market cap.

For more than a decade Duke Energy, one of the nation’s largest power generators, has been working to wean itself off coal in favor of cleaner sources of energy. Since 2005, Duke has reduced its carbon emissions by 39%, retiring 51 coal-fired power plants in the process and becoming a major operator of solar farms in eastern North Carolina and elsewhere. It recently completed installing 530 charging stations in Florida, part of a plan to establish a corridor of stations throughout the region it serves. Still, the company says it will face significant challenges in ramping up to produce enough green energy to power the homes and industries in its six-state operating area (Florida, the Carolinas, Ohio, Kentucky, Indiana). The company says it will require getting nearly 30% of its power from technologies that are yet to be invented to meet its target of becoming a net-zero producer of carbon by 2050. The remaining power will be generated by renewables (40%) and nuclear (30%). Developing such breakthrough technologies will require a national effort to “supercharge R&D investment,” says Duke CEO Lynn Good.

For all its focus on greener forms of power, Duke Energy is still dealing with its legacy as a big coal consumer. In fact, Duke has up-close experience with Biden’s nominee to lead the Environmental Protection Agency, Michael S. Regan, who has been serving as the head of North Carolina’s department of environmental quality. In January 2020, Regan reached a settlement with Duke for the cleanup of nearly 80 million tons of coal ash at six Duke facilities in North Carolina. Coal ash, which is created when coal is burned to create electricity, contains mercury, cadmium and arsenic, and without proper management, these contaminants can pollute waterways, groundwater, drinking water and the air. It was the largest coal-ash cleanup in the nation’s history. At the time, Regan said, “We are holding Duke accountable and will continue to hold them accountable for their actions as we protect public health, the environment and our natural resources.” Good said the settlement “is a reasonable, commonsense approach that protects people and the environment, while keeping costs in check as much as possible to benefit our customers.”

Good recently joined TIME for a video conversation to discuss the new Administration, the challenges of energy storage and what it’s like when protesters build a fracking tower on your front lawn.

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(This interview with Duke Energy CEO Lynn Good has been condensed and edited for clarity.)

How has the recent election changed the timetable of your goals?

As I look at the Biden Administration, climate is their top priority. It’s important to them. It’s important to us. We’re well-positioned, and we’ll be looking for ways to work with the Administration and the new Congress to accelerate and advance our plans in the interest of our customers.

Are there specific areas where you think you know the timetable can really accelerate?

Renewable deployment is going to be a part of the story. We are spending a lot of time talking about the need for investment in new technologies, whether it’s longer-duration storage or hydrogen, advanced nuclear, carbon capture. Because as we look at the next three decades, we need some new technologies in order to get to net-zero.

Are we at a tipping point?

Movement around carbon reduction and incentivizing investment is not just a federal matter, it’s a state matter. States are moving. Customers are demanding it. There’s momentum from a number of different places.

I was surprised to learn that North Carolina is the No. 2 solar producer in the country. Is that because the sun always shines in North Carolina, or is this policy?

It has been primarily driven by policy, tax incentives. A lot of federal incentives really spurred that development.

And there’s a lot of days of sunshine in the state?

The challenges in North Carolina are not around sunshine; there’s plenty of it. It’s the way electricity is used in the state. We are a winter-peaking utility, which means the highest demand for electricity is on winter mornings—January, February, 7 a.m. There is no solar then. So we have some things we’re working through on how to match the renewable resource with the time that people actually use the power. We still use resources that we can turn on when we need them, which is natural gas and other things. An example of this would be if it’s sunny on a Sunday afternoon in January, and I know that it’s gonna be 15° on Monday morning, I may not be able to store enough power in order to meet that need on Monday morning. And I further have to think about is it gonna be sunny enough on Monday to recharge the batteries? And so I’m making decisions on whether or not I need to ramp up some other form of generation to get me through Monday, prepare me for Tuesday, prepare me for Wednesday, because our customers don’t want intermittent power.

Let’s talk about storage, the holy grail for the energy industry. Someone in solar said it’s one of the few modern industries that can’t store the product it makes. What improvements do you anticipate in the future?

We have a lot of planned investment in storage, about $500 million [over 15 years] in various storage resources. We are still looking, though, for something that can move energy and store energy longer than hours. We need some more science and R&D and research and technologies for it to truly be the holy grail. Because I don’t think the holy grail is moving it from 2 in the afternoon to 5. It might be to move it from, you know, a sunny day on Jan. 5 to Jan. 20, when we have an extended period where it’s cloudy. So that longer-duration storage is really where we’re focused from a 2030s and 2040s standpoint.

So there’s sort of incremental improvements under way, but the storage game changer is still to be invented?

To be developed.

How reliant are you on technologies that don’t currently exist today to meet your carbon-reduction goals?

We have a clear line of sight on how to get to 2030 with existing technology. When you get in the 2030s and 2040s, that’s where it becomes a little bit more complex, because I don’t know if I’m gonna be choosing nuclear or carbon capture or long-duration storage or … and so making that prediction of what it’s going to look like in 2050 will depend a lot on what technologies develop. We are not prepared to say it’s going to be a future of 100% renewables. Because as the person who has to make it work, we don’t know how to make that work today.

So about half of your energy currently comes from nuclear plants?

Right. We are strong advocates for nuclear power. If you look at the Carolinas in particular, we have six nuclear power plants that provide 50% of the power for this region. It’s carbon-free, it runs all the time. So you turn a nuclear plant on, many of them run for two years without interruption. You refuel them every two years. We’re also working with TerraPower on advanced nuclear that has storage capabilities as part of their design.

I read a letter to the editor in your local paper that was headlined “I protested in Lynn Good’s driveway and here’s why.” That sounds like quite a day.

I completely respect different voices in the conversation and the fact that not everyone’s going to agree with everything we do. We are very active engaging with stakeholders from the environmental community, from various customer groups, because we want to hear what they have to say. When it comes to my home, though, I probably like it a little bit less. They had built a structure—it was a fracking tower—and actually brought it in on kind of a trailer-type thing.

In the end, your company ended up canceling the pipeline that was under consideration that was being protested. So part of the objection was it went over a portion of the Appalachian Trail, is that correct?

It didn’t go over it, it went under—700 ft. under, entering on private land, under the trail, exiting on private land. There are 56 pipelines that run under the Appalachian Trail.

How has your residential vs. commercial/industrial mix been affected by work from home and the economic slowdown related to COVID shutdowns?

Workers are at home. Our residential load has been up 4% to 5%. The decline in commercial/industrial has been much greater than the increase in residential, so we project to be down 3% overall in 2020.

Describe your investments to help develop the electric-vehicle industry.

To take away that concern about how am I going to charge my car, we have been active in trying to put charging infrastructure in place in our states to really spur adoption. So we put in 530 [charging stations] in our service territory in Florida. We just have approval for a pilot in South Carolina. We just got approval for doing so in North Carolina. We’re trying to create corridors of charging infrastructure. Transportation is a larger carbon emitter than electricity. And so if we can get cars off the road that are combustion engines and put them into the electric category, then our carbon reductions will further the carbon reductions in the transportation sector.

New topic. In September the Wall Street Journal reported that NextEra made an unsolicited takeover proposal for your company in a deal valued at $60 billion. Are there any ongoing talks?

So no comment, Eben, on market rumors. That has been our long-standing practice.

What’s the most vexing problem that you’re wrestling with right now?

I’m excited about a future where we have a clear vision of where we’re trying to go. But anyone who has a clear vision also has obstacles along the way. Those obstacles might look like there’s a simple way to do it when you know there isn’t a simple way. I want to get to net-zero by 2050; there are a lot of choices you have to make.

And so I have some stakeholders who want me to close everything tomorrow and build renewables. They don’t care much about the price because they’re strongly motivated by the environmental benefit. And then I’ve got customers who are on fixed income who will say to me, “I cannot afford one more dollar. Not one more dollar.” And so I have to find a way to get those opposing points of view, different points of view, put together to develop a plan I can execute.

I can’t keep letting price go up forever. But I also can’t stand on the sidelines and not improve the environmental footprint. So that’s where the complexity comes, and executing the clear vision, trying to find the right pace, the right timing, the right trade-offs, building support for the decisions you have to make. Because the execution is very hard.

I love hearing from readers. Please write me at leadership@time.com. Question: In terms of reducing your carbon footprint, what changes have you made in the pandemic that you think will be enduring? For instance, do you think you will fly more or less after things “return to normal”?

Additional Reading

Interested in energy and climate change? Here are some book recommendations.

Drawdown: The Most Comprehensive Plan Ever Proposed to Reverse Global Warming by Paul Hawken

Energy and Civilization: A History by Vaclav Smil

The Prize: The Epic Quest for Oil, Money & Power by Daniel Yergin

Subscribe to The Leadership Brief by clicking here.

Contact us at letters@time.com.

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Anticipating Election Challenges, JCI in February 2024: Most Promising Stocks and Investment Strategy

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Anticipating Election Challenges, JCI in February 2024: Most Promising Stocks and Investment Strategy
Attendees look at stock trading movements during the trade opening ceremony at the Indonesia Stock Exchange (IDX) in Jakarta on Jan. 2, 2024. The IDX Composite index strengthened on the last trading day of January, closing 0.22 percent higher at 7.207,94, on Jan. 31, 2024. (Antara/Asprilla Dwi Adha)

Telegraf – The CSA Index for February 2024 was 59.7, indicating a decline in the level of optimism compared to January, which reached 83.7. This decline
suggests that market participants are less enthusiastic about trading in February.

The reasons cited by many market participants for this decline are the elections held this month and the weakening of the Rupiah exchange rate. Despite the decrease, a number above 50 indicates that more market participants are predicting IDX Composite to be bullish in February.

The consensus for IDX Composite’s February 2024 closing is 7,258, indicating a slight increase from the January 2024 closing at 7,207.

Based on the results of in-depth interviews, it is evident that market participants perceive the uncertainty due to the election as quite high.

If the election concludes in one round, it will be a positive development, allowing market participants to promptly allocate their assets to adjust to the election results.

CSA Index IHSG Konsensus Feb 24 (Source : CSA Institute)

CSA Index IHSG Konsensus Feb 24 (Source : CSA Institute)

However, if there are two rounds, uncertainty will persist until the second round of elections is held.

Additionally, the weakening Rupiah and the potential increase in geopolitical tensions are believed to make it harder for IDX Composite to advance.

The heightened geopolitical tension is thought to have a significant impact on global supply chains, while expectations of an interest rate cut by the Fed in March are diminishing. 93.4% of market participants remain optimistic that the IDX Composite will experience a bullish trend over the next twelve months.

This figure is higher than the 93.0% optimism recorded for the annual IDX Composite movement in January.

The most influential positive sentiment is that market participants believe economic growth will still be good in 2024, and there is hope that the Fed will continue to cut interest rates this year.

CSA Index IHSG Konsensus 12M Forecast. (Source : CSA Institute)

CSA Index IHSG Konsensus 12M Forecast. (Source : CSA Institute)

The expectation of improved performance by issuers after the election is also a reason why investors believe the IDX Composite will continue to grow in 2024.

Market participants are targeting the IDX Composite to strengthen to the level of 7,697 in the next twelve months.

This indicates that the IDX Composite is expected to strengthen by 489 points or 6.78% from its closing position at the end of January 2024.

This target is based on the recognition of several negative sentiments with longterm effects, such as increased geopolitical risks and a slowdown in the world economy.

Despite volatility in commodity prices and exchange rates in the next 12 months, Indonesia’s economy is still expected to grow.

Market participants are eagerly anticipating the policy direction of the government to be elected in the next election, which is expected to further support IDX Composite growth.

CSA Index Sektor Pilihan Feb 24. (Source : CSA Institute)

CSA Index Sektor Pilihan Feb 24. (Source : CSA Institute)

Dr. David Sutyanto, CSA, General Chair of AAEI responded to the results of the CSA Index Feb 24 “CSA Index Feb 24 shows that market players’ optimism is decreasing in facing trading in February 2024.

This is due to the election event and the decreasing possibility of the Fed reducing interest rates in the near future.

However, the JCI is projected to still strengthen even though it is limited.

The election is the main factor that creates uncertainty, with the market tending to “wait and see” until a new president is elected.

The CSA Index also examines the sectors that will be the main drivers for the IDX Composite in February.

The financial sector is the top choice for the majority of market participants as a sector that can spur the IDX Composite.

The release of banking financial reports with results above expectations and low valuations makes this sector favoured.

Apart from the financial sector, the non-primary consumer goods sector is also the second most preferred.

This indicates that the level of domestic consumption is still maintained, reflecting optimism about domestic economic conditions.

In the view of NS. Aji Martono, the Chairman of PROPAMI, the market is likely to adopt a “wait and see” approach, evaluating the future vision for Indonesia, particularly in economic sectors and policies impacting the capital market.

While acknowledging the historical technical and fundamental significance of the CSA Index, Aji emphasizes the importance of caution, even during election-related market upswings, by considering both technical and fundamental analyses.

Foreign investors in early February bought up shares with a net buy of IDR 886.17 billion.

Throughout 2024, foreign investors’ net buy will reach IDR 9.21 trillion.

5 Top Gainers

  1. Shares RSCH (34.69%)
  2. SOTS (34.36%)
  3. PTMP (16.98%)
  4. INPS (15.13%)
  5. CBUT (12.00%)

5 Top Losers Shares

  1. MPXL (-19.44% )
  2. MLPT (-10.56%)
  3. SMGA (-10.08%)
  4. SMMA (-9.13%)
  5. TRUS (-9.09%)

5 Shares Net Buy Foreign Investors

  1. BBCA IDR 543.6 billion
  2. TLKM IDR 198.8 billion
  3. BBRI Rp. 131.0 billion
  4. BBNI Rp. 103.5 billion
  5. ADRO Rp. 35.3 billion

5 Shares Net Sell Foreign Investors

  1. KLBF (Rp. 31.6 billion)
  2. FILM (Rp. 28.5 billion)
  3. MEDC (Rp. 21.5 billion)
  4. BRPT (Rp. 15.2 billion)
  5. INKP ( IDR 15.2 billion)

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Breaking the Shackles of Coal Power

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Breaking the Shackles of Coal Power
The coal-fired Plant Scherer, one of the nation's top carbon dioxide emitters, stands in the distance in Juliette, Ga., Saturday, June, 3, 2017. (Branden Camp/AP)

In the classic movie “The Shawshank Redemption,” there’s a moment where Andy Dufresne dreams of a life beyond the prison’s walls, symbolizing the power of hope and ambition against all odds. This beautifully mirrors the scenario faced at COP28. Just as Dufresne faced the formidable walls of Shawshank, world leaders at COP28 set ambitious targets to escape from fossil fuels in a “just, orderly, and equitable manner.”

The Dubai Consensus marks a pivotal moment in the history of climate agreements. For the first time since the inaugural COP in Berlin in 1995, there’s an explicit reference to fossil fuels and the need to transition away from them to halt global warming. Previous agreements have broadly referred to just reducing greenhouse gas emissions. This general approach persisted until the 26th COP in Glasgow in 2021 when a more specific commitment was made to address the most polluting of fossil fuels, coal. There, nations consented to a gradual reduction in its usage. The Dubai Consensus, however, has also recognized the need to triple renewable energy capacity globally by 2030 and accelerate efforts toward the “phase down of unabated coal power.”

Achieving these ambitious goals is undoubtedly a daunting challenge. The deep-rooted dependence on fossil fuels, the disparate economic strengths of nations, particularly those in the developing world, and the hurdles presented by existing technology create formidable barriers. Like the imposing walls of  Shawshank, they are seemingly insurmountable yet not entirely impervious. The path forward is difficult but not unattainable, demanding perseverance and concerted global effort.

The journey toward phasing out coal presents three significant challenges, particularly for developing countries. 

The first concern is energy security. Phasing out coal is a complex task; it currently accounts for approximately 26 percent of the world’s energy consumption. Notably, 81 percent of coal used in energy production is in countries outside of the Organization for Economic Cooperation and Development, indicating that it’s predominantly developing nations relying on coal to meet their energy needs. 

Consequently, eliminating coal usage substantially threatens their energy security, placing the onus of the transition away from fossil fuels on these countries. However, the lack of affordable and clean alternative energy sources and difficulties in technology transfer make this transition particularly challenging.

Second, a rapid transition away from coal could exacerbate poverty, particularly in regions within developing countries where coal is a critical economic pillar. Many developing countries have states or provinces that depend heavily on coal for revenue and employment. A swift phase-out could disrupt these economies, leading to increased poverty and socio-economic instability.

Further, the costs of energy transition in developing countries often directly impact household budgets. These measures can lead to higher costs for electricity, water, and transportation. The increased expense can be particularly burdensome in countries where a significant portion of the population already struggles with economic instability. While these policies are crucial for long-term environmental sustainability, their immediate financial impact on households in developing nations poses a significant challenge. Therefore, the transition needs to balance environmental goals with economic feasibility and the socio-economic well-being of the populations most reliant on coal.

 Developing countries often argue that global discussions on reducing fossil fuel usage disproportionately focus on coal instead of equally addressing oil and natural gas. These nations, with significant coal reserves and a heavy reliance on coal for their energy, see the rapid phasing out of coal as a risk to their economic stability. 

Moreover, there’s a sense of inequity in how developed countries, traditionally large coal, oil and gas consumers, advocate for diminishing coal usage – a vital energy source for many emerging economies. While the coal usage of OECD countries has declined, according to the Statistical Review of the World Energy 2023, oil consumption by OECD countries increased by 1.4 million barrels per day in 2022. This viewpoint suggests a bias in international climate negotiations, advocating for a more balanced approach that equally considers the reduction of all types of fossil fuels.

 A third challenge for developing nations in transitioning to clean energy is access to capital and financing. The UN Environment Program’s Adaptation Gap Report estimates these countries need $215–387 billion yearly until 2030. The Independent High-Level Expert Group on Climate Finance’s second report reveals a stark reality: only 7 percent of 2022’s clean energy investments were in low and lower-middle-income nations (except China). These countries face daunting barriers like high-interest rates, vague policies and expensive capital. 

To achieve the Paris Agreement, a substantial boost in renewable energy is crucial for emerging markets and developing countries. The key lies in a fivefold increase in concessional finance by 2030, as this is the most crucial yet scarce funding source for pressing needs. Developed nations must triple their bilateral concessional contributions by 2030. However, the scale of need surpasses what  official development assistance can provide.

Similar to Shawshank’s formidable barriers, these obstacles make the path forward extremely challenging but not impossible. Addressing these hurdles is crucial, for without overcoming them, the transition will remain as elusive as Andy Dufresne’s dream of freedom within the confines of Shawshank.

Aditya Sinha is an Officer on Special Duty, Research, at the Economic Advisory Council to the Prime Minister of India. X: @adityasinha004

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Red Sea Shipping Attacks Threaten Global Economy

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Red Sea Shipping Attacks Threaten Global Economy
This handout screen grab captured from a video shows Yemen's Houthi fighters' takeover of the Galaxy Leader Cargo in the Red Sea coast off Hudaydah, on November 20, 2023 in the Red Sea, Yemen. (Photo by Houthi Movement via Getty Images)

To understand the implications for international shipping of the Yemen-based Houthi militant attacks in the Red Sea, it may be useful to start thousands of kilometers away, in the Port of Singapore. One of the busiest container shipping ports in the world, Singapore is a regular stop for all of the worlds leading shipping companies, and a key hub for Asia-Europe trade.

 Now, lets imagine a major container ship sailing the 17,000 kilometers from Singapore to Rotterdam. After exiting the port, it heads for its first major choke point, the Malacca Strait. Once through that vital waterway, it finds open seas, traversing the Indian Ocean and the Arabian Sea. As it approaches the coast of Yemen, it faces the Bab Al Mandeb Strait, another key chokepoint, before it enters the Red Sea onward to the Suez Canal.

 If everything goes according to plan – and it usually does – the container ship passes through the Suez and will find itself sailing the Mediterranean headed for the Gibraltar Strait, another key choke point, between Morocco and Spain. Then, it will be on an Atlantic Ocean run north to the key Dutch port that is a major hub of northern Europe.

 Everything is timed, synchronized, planned, and mapped for smooth sailings. After all, the global economy – and the bottom line of the shipping company – depends on it. Roughly 80-90 percent of world trade by volume is shipped by sea, according to the UN. 

 So, when something goes wrong in any part of that journey, its not just individual ships or shipping companies that feel the pain. We all do.

 The recent attacks by the Houthi militants on international shipping in the Red Sea has scrambled supply chains, pushed up oil and natural gas prices, and raised geopolitical tensions far beyond the states surrounding the Red Sea. Some of the worlds largest shipping companies – MSC, Maersk, CMA CGM Group, and Hapag-Lloyd – have suspended their sailings in the Red Sea. Energy giant BP has also declared it will avoid the Red Sea until further notice.

The implications for world trade are serious. Roughly 15 percent of global trade and 30 percent of container traffic passes through the Suez Canal. The Red Sea and the Suez Canal are vital links in the global economy, playing a pivotal role in the global supply chain of oil, natural gas, food, manufactured products and more. Some 40 percent of Asia-Europe trade passes through the Suez Canal, including vital liquid natural gas supplies. In 2021, when a ship became lodged across the canal, blocking it completely, economists estimated that some $10 billion of trade was affected for each day the waterway was blocked.

 The US military has announced an international coalition to protect Red Sea shipping lanes and provide security for the some 400 ships that are traversing the Red Sea at any given time. The US plan has not entirely soothed insurers, who have raised prices on Red Sea passages and expanded the areas considered high-risk. Prospects of US strikes against the Houthi militants, which are backed by Iran, have been raised. Oil prices are inching upward after several weeks of decline.

 The Houthis, which control parts of north and west Yemen, have declared their attacks are in response to Israels war in Gaza and that they are targeting ships linked to Israel or using Israeli ports. Most of Americas regional allies have been cautious about joining the coalition. Across the Arab world, even in capitals where the Houthis are seen as a serious threat to regional stability, aligning with the US at a time of rising public anger over the Israel-Gaza war has made several countries uncomfortable. As a result, the US may be required to lead this operation without a large Middle East contingent to its coalition.

 Meanwhile, the role of China will also be closely watched. Chinese shippers regularly traverse the Red Sea. China is also the only major purchaser of Iranian crude oil, giving it a degree of leverage over Tehran. Irans links with Houthi militants are clear, but it remains to be seen if Beijing will seek to exert pressure on Tehran to rein in the Houthi attacks – or, at least, to keep them targeted at non-Chinese vessels.

 Egypt, too, should be watched. The country faces an economic quandary. The Suez Canal Authority reported a record $9.4 billion generated in the 2022-2023 financial year. A serious dent in those revenues would further squeeze an Egyptian economy that is already reeling from a foreign exchange crunch and soaring inflation. Concerns mount that Egypt could default on its roughly $165 billion of foreign debt, one of the highest levels in emerging markets. 

 Meanwhile, some 100 container ships are actively avoiding the Red Sea route, according to logistics giant Kuehne+Nagel, and many more are likely to follow. The Singapore-Rotterdam route will now sail all the way around the coast of southern Africa and back up toward the Atlantic Ocean and Europe, adding weeks and rising costs to the journey.

 At a time of precarious recovery in the global economy and razor sharp geopolitical tensions, the Red Sea attacks are a reminder of how connected we are – and how dangerous it can be when those vital connections are severed.

Afshin Molavi is a senior fellow at the Foreign Policy Institute of the Johns Hopkins School of Advanced International Studies and editor and founder of the Emerging World newsletter. Twitter: @AfshinMolavi

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Bank of England under pressure to cut interest rates after surprise inflation fall

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Bank of England under pressure to cut interest rates after surprise inflation fall
Shadow chancellor Rachel Reeves with party leader Sir Keir Starmer. PA Wire

The Bank of England is under mounting pressure to cut interest rates to help homeowners after a surprise fall in inflation gave consumers “an early Christmas present”.

Falling petrol prices helped curb inflation to 3.9 per cent, the lowest rate in two years and well below Rishi Sunak’s target of 5 per cent by the end of the year.

But leading economists told The Independent that although “the bulge has made its way through the snake”, much of the “low hanging fruit” has been picked – and the central bank will struggle to reach its longstanding target of 2 per cent.

They also warned that many homeowners coming off fixed rates now face “a very different world”, while Britain’s slowing economy and higher mortgage costs mean living standards will “remain pretty desperate”.

Signalling a change in the political tide, work and pensions secretary Mel Stride said the inflation fall could allow the Bank to ease interest rates and aid those struggling with mortgage costs. Most economists had been expecting a dip to 4.3 per cent last month.

While he emphasised its independence, the cabinet minister said that the faster-than-expected fall in inflation “does take some pressure off [the Bank] in terms of keeping interest rates higher, which of course in time and in turn feeds into mortgage rates”.

Falling prices at the pumps helped push inflation to a surprise low, which the prime minister hailed as “good news for everyone in this country”.

Inflation also slowed on things like food, air travel and the cost of a second-hand car.

With just days to go before Christmas, Simon Pittaway, senior economist at the Resolution Foundation, said that “politicians and the public can all cheer this festive surprise”.

But the rampant inflation of recent years means prices are around 20 per cent higher than they were in 2020, and economist Laith Khalaf of AJ Bell warned that food price inflation remains at a “pretty concerning” 9 per cent.

Despite the latest figures, Mr Khalaf warned that UK consumers are still “heavily under the pump” – with mortgage holders set to come off fixed deals next year “facing a different world”.

“It’s almost like another leg of the cost of living crisis,” he told The Independent. “It started off with fuel and heating, it then moved onto food. There’s rising interest rates, and don’t forget taxation as well, where over the next five years the tax burden is expected to rise to highest since the Second World War.”

Suren Thiru, economics director at the Institute of Chartered Accountants, said that the “dramatic” fall in inflation showed there was light at the end of the tunnel. But they added that “living standards will remain pretty desperate as this boost is largely offset by a squeeze on incomes from higher mortgage costs and a slowing economy.”

Labour warned that more than a million people face higher mortgage payments “after the Conservatives crashed the economy”.

Following last week’s decision by the Bank of England to hold its base rate for a third time at 5.25 per cent, economists suggest the markets are pricing in interest rate cuts by May – and perhaps as early as March – as pressure intensifies on the central bank.

“The first 25 basis point cut is now fully priced in for the Bank’s May meeting, with a decent chance of a start to cuts in March,” said Matthew Ryan, from financial services firm Ebury, while James Smith of ING bank said: “Markets are right to be pricing a number of rate cuts for 2024 … starting in May.”

Yael Selfin, chief economist at KPMG, told The Independent that, while the new inflation figures were good news “the Bank of England is likely to be quite cautious in cutting rates”.

Echoing these concerns, Rob Morgan, chief analyst at Charles Stanley pointed to the soaring prices of recent years as he said: “We’re sort of coming down the other side of [high inflation], so the bulge has made its way through the snake.

“Our worry is you’ve had the easy wins because you’ve had the energy bills coming down, fuel prices coming down quite a lot lower. It’s difficult to replicate that kind of disinflation going forward,” he added.

Citing looming increases in the national living wage and state pension, with borrowing costs and mortgage rates also starting to fall, Mr Morgan said: “It makes it difficult to get that last little bit of inflation out of the system. The low-hanging fruit for the Bank of England has been picked.”

Responding to the inflation figures, the chancellor Jeremy Hunt said the economy was back on the path to “healthy, sustainable growth”. But he acknowledged that “many families are still struggling with high prices so we will continue to prioritise measures that help with cost of living pressures”.

Shadow chancellor Rachel Reeves said the fall in inflation would come as a “relief” to families. “However, after 13 years of economic failure under the Conservatives, working people are still worse off,” she added.

“Prices are still going up in the shops, household bills are rising, and more than a million people face higher mortgage payments next year after the Conservatives crashed the economy.”

____

Independent

 

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Kishida says Japan is ready to lead Asia in achieving decarbonization and energy security

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Kishida says Japan is ready to lead Asia in achieving decarbonization and energy security
Japan’s Prime Minister Fumio Kishida has pledged to lead efforts to simultaneously achieve decarbonization, economic growth and energy security in Asia. (AP Photo/Shuji Kajiyama, Pool, File)

Japan’s Prime Minister Fumio Kishida pledged to lead efforts to simultaneously achieve decarbonization, economic growth and energy security in Asia, an ambitious goal he set Monday at a regional climate summit attended by Southeast Asian leaders.

Kishida told the summit of the Asia Zero Emission Community, or AZEC, that the initiative will create “a new, huge decarbonization market in Asia that will attract global capital.”

Decarbonization in Asia will require 4,000 trillion yen ($28 trillion), Kishida said, and promised to establish a new organization to support AZEC countries in their effort to implement policies needed to achieve carbon neutrality.

Leaders of nine member countries of the Association of Southeast Asian Nations except Myanmar, in addition to Australia, expressed commitment to cooperate toward achieving carbon neutrality. The summit was held one day after Japan hosted a special summit Sunday commemorating 50 years of ties with ASEAN.

As part of the AZEC initiative, Japan is offering to help other members with technologies to cut emissions, including co-firing technology using ammonia or hydrogen, as well as bendable and more mobile solar panels.

Kishida said Japan will cooperate with AZEC members in setting a decarbonization roadmap and other measures, while also offering support in funding, technology and human resources by establishing the Asia Zero Emission Center in Indonesia.

Japan has achieved 20% emissions reduction and is on course to meet the targeted 46% by 2030, saying it will achieve its net-zero goal by boosting renewables as the main source of power, utilizing nuclear power and taking other measures.

Japan has faced criticism from environmental groups for not setting a timeline to stop using fossil fuel. Kishida, at the COP28 summit in Dubai, promised that Japan will end new construction at home of unabated coal fired power plants, in a show of clearer determination than in the past toward achieving net-zero.

Kishida has also pledged that Japan will issue the world’s first government transition bond with international certification. Japanese officials say Japan aims to fund 20 trillion yen ($135 billion) over the next 10 years to promote private sector investment worth 150 trillion yen ($1 trillion).

Japan will contribute to the expansion of lending capacity totaling about $9 billion through the provision of credit enhancements to the World Bank and the Asian Development Bank, and will also make a separate contribution of the new fund of the African Development Bank, Kishida said.

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Associated Press / ABC

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BUSINESS

PT Rig Tenders Indonesia Tbk Sustains Positive Performance Growth Until June 30, 2023

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PT Rig Tenders Indonesia Tbk Sustains Positive Performance Growth Until June 30, 2023
Photo: public presentation carried out by the Director of PT Rig Tenders Indonesia Tbk, Mr. Iriawan Hartana, in Jakarta on November 23 2023. (Safa/infoemiten.com)

Telegraf – PT Rig Tenders Indonesia Tbk (RIGS) continues to register positive performance growth until June 30, 2023.

RIGS successfully garnered a profit of IDR 62.51 billion, a 74.58% increase from the same period the previous year, amounting to IDR 35.80 billion.

According to the financial report, the company’s revenue also grew by 10.44% to reach IDR 341.70 billion, up from the previous IDR 309.37 billion.

“Director of RIGS, Mr. Iriawan Hartana, conveyed this information during a public presentation in Jakarta on November 23, 2023.”

“The company will continue to strive to strengthen its position in the national shipping industry,” said Mr. Iriawan.

He added that the company will continue to develop services that meet market needs while maintaining the distinctive features of the company.

“The company will also continue to explore the possibility of engaging in strategic alliances that benefit our working partners,” added Mr. Iriawan Hartana.

As for the work program in 2023, the company has outlined several initiatives:

  1. Changing the ownership status of the company’s shares from Foreign Direct Investment (PMA) to Domestic Direct Investment (PMDN) after the share acquisition by PT Surya Indah Muara Pantai.
  2. Changing the currency in the financial statements from USD to IDR starting from July 2022.
  3. Changing the ownership structure of the subsidiary Grundtvig Marine, namely PT Batuah Abadi Lines, to directly become a subsidiary of PT Rig Tenders Indonesia, Tbk.
  4. Implementing sustainable Corporate Social Responsibility (CSR) programs.

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