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Climate Change is the Biggest Threat to the US Economy, FED Has Warned

Climate- and weather-related events have directly cost the US more than $500 billion over the past five years, according to a Federal Reserve official.

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Georgina Korir

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Climate and weather-related events have directly cost the US more than $500 billion according to Kevin Stiroh, the executive vice president responsible for bank regulation at the New York Federal Reserve System (Fed).

“Climate change has significant consequences for the US economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity,” Stiroh said on Thursday at the GARP Global Risk Forum in New York.

According to him, global warming is expected to disrupt business operations and economic activity in the coming years in addition to causing severe damage to natural resource and infrastructure damage. “These effects will be felt across business sectors and asset classes, and on the strategies, operations and balance sheets of financial firms”.

The central bank would “use its authorities and tools to prepare financial institutions for severe weather events.” Fed Chairman Jay Powell told Congress this year.

In a 1,500+-pages report released late 2018, scientists from 13 federal agencies predicted that climate change would slash gross domestic product by a tenth by 2100 if the rate at carbon emissions that warm the planet are being released into the atmosphere.

The scientists said that in an event which involves extreme weather conditions, there is possibility of wreaking havoc on growth through adverse effects on the supply chains, healthcare system, labor productivity, agriculture, tourism, infrastructure, electricity costs and power generation.

“With continued growth in emissions at historic rates, annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century—more than the current gross domestic product of many US states,” the report said.

Top economists from both sides of the aisle signed a letter in January, the letter said that climate change was “a serious problem calling for immediate national action” and called for a national tax on carbon.”

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Aviation

Business Aviation Risks Ban in UK by 2025, Labor Politicians have Suggested

Dennis Kamau

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The business aviation in United Kingdom is at a threat of being banned by 2025, some UK politicians have suggested.

NBAA CEO Ed Bolen says “The Business Aviation has seen the pioneering of new technologies that has seen reduction of carbon emission with less than 40% emission.” However, this isn’t the case with UK Labor politicians. Some are pushing for ultimate ban of business aviation. This has seen the business aviation groups coming into the defense with National Business Aviation Association and International Business being the main fighting for their industry.

The main reason for pushing the ban is that business aviation is too dirty. Why do they view it as being dirty? Well, The Labor politicians view the business aviation as a leading carbon emission. IBAC director Kurt Edwards says “UK leaders need to focus in making sustainable aviation fuels (SAF) widely available in UK with positive incentives to encourage use of SAF in greater quantities. The business Aviation has overseen the emissions and energy saving technologies that is been used greatly in Aviation Industry.”

Also this suggestion came as a result of a report that showed the carbon emission was equivalent to 450,000 cars a year. The Shadow Transport Secretary Andy McDonald tweeted Monday 4th November, “The Multi-millionaires and billionaires who travel by jet are doing profound damages to the climate, and it’s the rest of us who’ll suffer the consequences. A phase-out date for the use of fossil fuel private jets is a sensible proposal.”

If the suggestion from the labor politicians is to go by, then the business aviation will suffer great losses and eventually death due to lack of profits. This is also going to greatly affect the creativity of newer technologies that will cut the energy and carbon emissions which is influenced by some of the invention technologies from business aviation as stated by IBAC director. It will also influence the full achievement of environment friendly after fossil planes are phased out as, UK seeks to be environment friendly by 2044 using strategies and plans outlined in the 25-year plan launched in 2018.

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International

Oil Prices drop as Uncertainty Weighs on The U.S.-China Trade

Georgina Korir

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Amid renewed doubts over the prospects of the US and China trade deal, Oil prices fell more than 1 per cent on Monday, while worries about oversupply also weighed on the market.

Brent crude was down 69 cents, or 1.1 per cent, at $61.82 by 0730 GMT. The contract rose 1.3 per cent last week. U.S. crude was 63 cents, or 1.1 per cent, lower at $56.61 a barrel, having risen 1.9 per cent last week.

U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely,” and also stressed a deal will be agreed ‘if it was a right one for America’.

Phillip Futures analyst was quoted saying: “China delivered a massive deflationary shock in its factories, providing a somber tone towards the fragile state of the global economy.”

the sixteenth trade war between the world’s two biggest economies has raised concerns that a supply glut could develop in 2020 due to the slower economic growth around the world and this has prompted analysts to lower forecasts for oil demand.

Trump also said U.S. willingness to lift tariffs as part of a “phase one” agreement, news of which had boosted markets was incorrect reporting.

Underlining the impact of the trade war, data over the weekend showed that China’s producer prices fell the most in more than three years in October, as the manufacturing sector weakened, hit by the dispute and declining demand.

Analysts said that investors are also concerned about excess supplies of crude.

OPEC Secretary-General Mohammad Barkindo said last week, that the oil market outlook for next year may have upside potential, suggesting there is no need to cut output further.

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International

Eurozone Rises Above Expectations in The Third Quarter

News Team

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With emergence of fresh evidence of the impact global trade wars on the euro zone, officials have revealed that there has been a 0.2% growth in the 19-nation single currency bloc in the three months leading to September.

The European Union’s statistical agency, Eurostat, provided data which showed that the activity had expanded by 0.2% in the latest quarter – this has remained unchanged between June to September.

Germany, the most affected euro zone country by the slowdown in global trade, contracted by 0.1% in the second quarter and there had been speculation that third quarter data due out next month would show a similar performance.

For countries which the third quarter has already been published like France and Spain there was a growth spark of 0.3% and 0.4% respectively, which in both cases were slightly better than what was been forecast.

There has been a steady decline in the eurozone’s growth rate during the year 2o19, from 1.3% in the first quarter to 1.2% in the second quarter and 1.1% during the last three months.

Eurostat’s data for the 28-member European Union – including the UK – showed that gross domestic product expanded by 0.3% between the second and third quarters and at an annual rate of 1.4%.

“The eurozone economy didn’t slow further in the third quarter, which is something to be relieved about in the current environment of uncertainty and poor monthly data. Still, taking the 0.2% growth rate together with a sluggish start to the fourth quarter, according to poor survey data and slightly higher unemployment in September reveals an economy in need of positive news about the trade environment to keep from sliding further.” this said by Bert Colijin, eurozone economist at ING bank.

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