Opinion

Toyota may be one of the slowest legacy automakers to develop electric vehicles but it could be the first to jettison cars powered only by gasoline.Almost three decades after launching the Prius, its pioneering gasoline-electric hybrid, Toyota is moving to convert most, and eventually maybe all, of its Toyota and Lexus lineup to hybrid-only models, two Toyota executives told Reuters.Toyota’s stubborn focus on hybrids over EVs is part of a broader challenge by the world’s biggest automaker to the prevailing industry and regulatory orthodoxy that all cars will be electric in the near future.Toyota Chairman Akio Toyoda said in January that he believed the global share of EVs would top out at just 30%. The Japanese automaker instead touts a “multi-pathway” strategy that includes EVs along with hybrids, hydrogen fuel-cell vehicles, green fuels and, potentially, other technologies yet to emerge.“Going forward, we plan to evaluate, carline by carline, whether going all-hybrid makes sense,” David Christ, head of sales and marketing for Toyota in North America, told Reuters.Those evaluations will come with every model redesign, if not sooner.That includes the pending overhaul of the RAV4 for the 2026 model year. The RAV4, America’s best-selling SUV, already has hybrid variants that account for about half of sales.Two people familiar with Toyota’s product planning discussions said the automaker is highly likely to ditch the gasoline-only version for the North American market, but hasn’t made a final call. The automaker has already stopped offering a gasoline-only version of its Camry, America’s best-selling sedan, for the 2025 model year while its rugged Land Cruiser and Sienna minivan, for example, also now come only as hybrids.Many of the hybrid-only models will also likely come as a plug-in hybrid with a bigger battery, according to the two people, who declined to be named.Toyota’s effort to convert all or almost all of its North American lineup to hybrid-only vehicles has not previously been reported.New emissions rulesThe automaker’s hybrid strategy aims to solidify its already dominant position in a part of the market that has found a new lease on life as demand for EVs slows, partly due to their high prices and charging hassles.Toyota’s hybrids don’t need charging and switch seamlessly between gasoline and electric power, or use both at once, depending on driving conditions. Its plug-in hybrids can be charged and typically travel about 40 miles (64km) on battery power, like an EV, before their gasoline engines are required.Stripping out two EVs and a fuel-cell car on sale in North America, there are currently 31 other Toyota and Lexus models. Eight are already hybrid-only and eight are available in gasoline versions only.The hybrid strategy will also give Toyota unique advantages in complying with increasingly tough US carbon-emissions restrictions, Toyota executives and industry experts said.As the US lowers pollution limits under regulations announced in March, Toyota’s booming hybrid sales could help the automaker save billions of dollars in regulatory fines and costs while buying Toyota more time to develop EVs or other zero-emission vehicles.The new emissions standards take effect from the 2027 model year and run through 2032.Christ said Toyota hasn’t set a deadline for producing an all-hybrid lineup, and that certain models, such as pickups and economy cars, may take longer because of consumer price sensitivity on entry-level versions.In addition to hybrids, Toyota aims to convert about 30% of its global fleet to EVs by 2030 by focusing on a small number of fully electric versions of existing top-selling models, according to two sources familiar with Toyota’s product planning.Toyota has previously announced plans to invest $35bn in new batteries and EV platforms by then.In May, the automaker showcased a small prototype combustion engines it said could one day run on biofuels or low-carbon synthetic gasoline and could be paired with hybrid drivetrains.But the main point of scaling down the engine size, according to one of the two sources familiar with Toyota’s product planning, was to allow it to develop hybrids in a different way. Instead of starting with a gasoline car and adding a battery, it plans to start with its new EV platform and add the tiny engines to create a more efficient hybrid option.According to one of the two sources, the first hybrid based on the new platform and engine will likely be a Corolla plug-in hybrid, which will likely hit the market in China in 2026 and the United States in 2027.Tipping pointToyota’s hybrid boom owes to decades of investments in bringing down the cost and boosting the efficiency and performance of its gasoline-electric powertrains.For most Toyota models, the decision to go hybrid-only is becoming a no-brainer for the automaker and its customers because the technology for a traditional hybrid now typically adds less than $2,000 to a car’s retail price.In addition, while early hybrids were slow, today’s models often offer more power than their gasoline-only variants.Those advances eliminate the two biggest consumer concerns that for years made hybrids largely an automotive niche, accounting for less than 3% of all US sales as recently as 2019. Now they’re at 11.3% and rising fast, according to auto services specialist Cox Automotive.Toyota has seen far more dramatic growth because of its dominance of the hybrid sector, bringing the automaker to the tipping point that has pushed executives to now consider an all-hybrid lineup. Hybrids accounted for just 9% of Toyota sales in 2018 but 37% as of June.The hybrid sales surge has been a key factor driving its profit and stock price to all-time highs this year.Christ said Toyota expects hybrid sales to keep accelerating. “Next year,” he said, “we definitely will be well over 50% of our total volume.”Toyota’s US hybrid sales through June 30 shot up 66% from last year to 438,845 vehicles, the company said, compared with EV sales of just 15,107.Atlanta-based Cox Automotive estimates demand growth for EVs will likely remain modest for the next few years.“EV growth is going to continue, but it’s not going to hit the big pace we saw in the last few years,” Cox senior analyst Stephanie Valdez Streaty said.“Regular gas-electric hybrids and plug-ins will continue to eat into EV sales in the meantime because they are easier and more familiar alternatives and there’s no range anxiety.”Hybrids buy timeToyota’s plan to offer more plug-in hybrids aims to take advantage of US emissions rules that give them outsized credit for reducing pollution. That’s now possible because Toyota is opening a North Carolina battery plant that, by 2030, will have 14 production lines capable of producing 30 gigawatt-hours (GWh) of batteries annually.Plug-ins have so far sold in far lower volumes than traditional hybrids because of their substantial extra cost. Toyota’s current plug-in hybrid models tend to cost $5,000 or $6,000 more than comparable gasoline models.Mass-market hybrid sales will give Toyota invaluable time to develop EVs and other next-generation technologies, said Katsuhiko Hirose, one of Toyota’s managers who led its global powertrain planning from 2001 through his retirement in 2019.Hirose, now a visiting professor at Japan’s Kyushu University and an energy consultant, estimated US regulations would essentially require Toyota to go nearly all-hybrid by around 2030 — with an increasing share of plug-in hybrids — to avoid regulatory fines or other costs.“(Hybrids) will buy them more time and give Toyota flexibility over how fast and how many EVs they’d have to roll out,” Hirose said. “They wouldn’t feel pinned against the wall to produce EVs.”

Four years ago, at the height of the Covid-19 pandemic, governments were scrambling to protect their populations and prevent an economic meltdown. No one would dispute that addressing this existential threat was the top political priority back then.As a former prime minister and director-general of the World Health Organisation (WHO), I was impressed by the co-ordinated international response to Covid-19. To be sure, there were large inequalities within and between countries, resulting in society’s most vulnerable paying too high a price, especially when it came to vaccine access. But I saw reason to hope that the pandemic’s devastating impact would prompt a political sea change and lead to a greater commitment to future preparedness, prevention, and response.I was wrong. It is depressingly obvious that the lessons of Covid-19 are being forgotten. The world remains stuck in the familiar cycle of panic and neglect that has characterised this past pandemic. Political leaders are largely ignoring current threats, including Covid-19 (which has not been consigned to the history books, despite no longer being a public-health emergency), H5N1 bird flu, and dengue fever. And new pandemics with potentially catastrophic outcomes will almost surely occur, especially as climate change and environmental degradation worsen.These are not hypothetical risks. On Wednesday, WHO Director-General Tedros Adhanom Ghebreyesus declared the latest outbreak of mpox in East Africa a “public-health emergency of international concern.” Not only must the international community now rally behind affected African countries and those at highest risk; it must also prepare itself for potential spread into more countries and across the globe.Even before Covid-19 hit, I had been warning that our failure to break this vicious cycle was putting us at grave risk. In September 2019, the Global Preparedness Monitoring Board (which I co-chair) issued a report highlighting the acute risk of a devastating global epidemic or pandemic. Little did we know how prescient our warnings were.And now we find ourselves in a new phase of neglect, which can only be understood as a failure of political will. For all the pious words uttered in the Covid-19 era, heads of state and governments are failing to address the inequalities that stymied recovery efforts. It is unacceptable that rich countries have done so little to make the next pandemic response more equitable – and therefore more effective.In June, for example, the 77th World Health Assembly failed to finalise a new pandemic accord, even though the Intergovernmental Negotiating Body (INB) had been working on the global pact, which aims to prevent a repeat of Covid-19, for two years. Member states have extended talks for up to 12 months. But, crucially, they still seem unwilling to provide negotiators with the political support needed to agree on measures that can address inequities in pandemic readiness, response, and recovery.The failure to find consensus on substantive matters is symptomatic of the growing trust deficit between advanced and emerging economies, and of the ineffectiveness of the multilateral system in an era of deepening geopolitical tensions. But this cannot be an excuse to delay action on one of the biggest threats of our time. The INB needs a new approach that enables maximum engagement from independent experts and civil-society organisations, while ensuring that member states stay focused on improving – instead of just paying lip service to – global equity.Moreover, if the past four years have taught us anything, it is that WHO-led processes alone are not enough to tackle the existential threat of pandemics. Other multilateral institutions should take up the cause of improving preparedness. The United Nations’ Summit of the Future in September, as well as the upcoming meetings of the G7 and the G20, must highlight the urgency of this challenge and encourage world leaders to act. More visible advocacy for global health security in these fora could be crucial in securing the political leadership and financing needed to bring about meaningful change.To that end, the group of former political leaders known as The Elders support the adoption of an emergency platform – a set of protocols that would allow UN leaders to respond quickly to global shocks – at the Summit of the Future. World Trade Organisation members should also agree to review, as proposed by Colombia, the implementation of the agreement on Trade-Related Aspects of Intellectual Property Rights. The TRIPS agreement governs patent protection for vaccines and treatments, and thus plays a key role in pandemic-response efforts.Recommitting to pandemic preparedness is essential. But it also should be part of a broader revival of multilateralism. Only through compromise and collaboration can we confront humanity’s gravest challenges. – Project SyndicateGro Harlem Brundtland, a former prime minister of Norway and director-general of the World Health Organisation, is a co-chair of the Global Preparedness Monitoring Board and a member of The Elders.

Joe Biden’s withdrawal from the 2024 US presidential race remains one of the biggest stories of the year. Criticised for his June debate performance and showing clear signs of ageing, the 81-year-old president finally acknowledged what the polls were showing and handed the reins to his vice-president, Kamala Harris, who is 59. Suddenly, the 78-year-old Republican nominee, Donald Trump, has gone from being the slightly younger candidate to the much older one.While the US does not have age limits for elected politicians, perhaps it should. The US Foreign Service requires its officers to retire by age 65, and the US military imposes retirement on flag officers at age 64, though higher-ranked generals can have their retirement deferred until 68 by the president. These age limits guarantee that those who command America’s soldiers and weapons are also in full command of their faculties. Trusted to make sharp, clear-headed decisions in the face of physically and mentally demanding situations, they cannot falter like Biden did on the debate stage.Surely these standards should be even higher for the men and women with the most power. Yet neither the president nor any of the officials who would step into that role (the vice president, the speaker of the House of Representatives, the president pro tempore of the Senate, and so forth) face any such requirements.Around one-third of the elected officials who control the world’s largest economy and military – 35 of the 100 US senators, and 91 of the 435 members of the House – are well past what is allowable for the country’s most senior military leadership; and the same goes for the US Supreme Court, where three of the nine justices – the ultimate arbiters of US law – are 70 or older. By contrast, only 28 Fortune 500 CEOs are 70 or older.The usual argument for allowing aged statesmen to lead is that they have the most experience. But even if one views this as an asset, its value must be weighed against all the risks that come with age – from physical ailments such as strokes and fractures to cognitive decline. Older minds may be better at putting together disparate pieces of information and interpreting the “big picture,” but it is unclear whether this capacity endures well into one’s 70s and 80s.Another argument is that America’s increasingly aged leadership merely reflects an ageing electorate. With around 30% of US voters in 2022 over 65, we could simply be witnessing democracy at work. But the data show no obvious relationship between the age of an elected official and the age of his or her voters. The oldest elected officials do not hail from the oldest states.Consider Senator Dianne Feinstein, who held onto office for years despite her poor health before passing away at age 90, just months after she finally retired. Her state, California, has the tenth lowest share of voters aged 65 or older. Of the ten US states with the smallest share of over-65 voters, seven have one or more senators over age 70.A more likely reason for America’s ageing leaders is that the rules have become outdated as lifespans have lengthened. There are no age restrictions for Supreme Court justices, and the US Constitution only set minimum ages for presidents, senators, and representatives: 35, 30, and 25, respectively.The absence of mandatory retirement ages for elected and appointed federal officials reflected a world in which most people did not live long enough to experience dementia, and where few could hope to survive a heart attack or a severe bone fracture. Old age was not a problem on the minds of our 18th-, 19th-, and early 20th-century predecessors. But life expectancy for those who reach age five has increased by more than 20 years since the Constitution was drafted, and functional deterioration comes with ageing.Elected officials clinging to office well into old age is not the result of democracy at work. On the contrary, according to Freedom House, elder statesmen are more likely to lead less democratic countries. In the US, many continue to hold power because incumbency confers an electoral advantage, particularly in the Senate. The recent experiences with Feinstein and Biden highlight the dearth of formal and informal mechanisms to push out a sitting leader.Polling from last year indicates that 79% of Americans would favour a maximum age for elected officials in Washington, and 74% would support one for Supreme Court justices. Half of Americans would prefer a president in his or her 50s, and while older Americans prefer older presidents, only 5% of respondents aged 70 or older want a president their own age.Legend has it that when the first US president, George Washington, was six years old, he chopped down a cherry tree and could not lie when confronted about it. It’s a charming fable, but Americans should focus on a more important fact about Washington: he refused to seek a third term, which he would have won handily, because he knew that it was time to step aside. – Project SyndicateNancy Qian, Professor of Economics at Northwestern University, is Co-Director of Northwestern University’s Global Poverty Research Lab and Founding Director of China Econ Lab.

Big investors are bracing for this summer’s stock market rout to run into the autumn, fearing a broader wave of selling will follow the turmoil sparked by US recession concerns and the Bank of Japan (BoJ) wrong-footing currency speculators.The sudden reversal of crowded equity and foreign exchange trades that generated vicious feedback loops of price drops, volatility and hedge fund selling has eased, with world stocks almost 2% higher so far this week. But asset managers overseeing hundreds of billions of dollars of investments said they were more likely to carry on selling stocks than buy back in, with signs of weakness in the US jobs market and global consumer trends lowering the bar for market aftershocks.The buy-the-dip mentality, where investors typically respond to selloffs by making recovery bets, has been replaced by fear.“It’s not simply now a large financial market accident, which maybe we could describe last week as. It’s broader than that,” said Mahmood Pradhan, a former IMF deputy director and head of global macro at the research arm of Amundi, Europe’s largest fund manager. He expects investors, who according to Bank of America have already cut equity positions and shifted increasingly into cash, to remain cautious.Michael Kelly, head of multi-asset at PineBridge Investments, which oversees around $170bn of client funds, is among those to have reduced his funds’ stock market positions and he may pull back further.“It’s going to be very, very volatile in the next two months,” he said. A first US rate cut, expected next month, might be too late to rescue the economy, he added. Investors’ global growth expectations have fallen to eight-month lows.A weak US employment report and a shock BoJ rate hike drove the global stock market selloff as volatility linked and trend-following hedge funds headed for the exits and anxious investors herded into government bonds.The BoJ hike wrecked billions of dollars worth of previously profitable trades where speculators had borrowed yen cheaply to buy higher-return assets like US tech stocks. About 70% of that carry trade has now been unwound, JPMorgan estimates. But money flows tied to yen-related positions are tough to measure and Amundi’s Pradhan said the possibility of further unwinding is making people quite risk averse.UBS European equity strategy head Gerry Fowler said hedge fund selling was likely over but slower moving mainstream investment managers often take four-to-six weeks to adjust their portfolios.Those fund managers could be the next to sell, said Edmond de Rothschild Investment Partners multi-asset portfolio manager Marie de Leyssac, but would do so based on economic data.While she doesn’t see a savage US slowdown as likely, she wasn’t buying stocks, instead preferring put options, which insure against equity losses by paying out when markets fall.Pension funds would also further sell equity exposure and move into fixed income, Goldman Sachs strategist Scott Rubner said in a note, adding that the second half of September has been the worst period of the year for Wall Street since 1950.Russell Investments chief US investment strategist Paul Eitelman said another weak US jobs report would have the potential to spark fresh volatility.Federal Reserve chair Jerome Powell’s speech at next week’s annual Jackson Hole central bank conference and artificial intelligence giant Nvidia’s Aug 28 earnings report are other market risk events.“Volatility makes it hard to increase exposure even if you think it fundamentally makes sense,” Pictet Asset Management senior multi-asset strategist Arun Sai said.Money managers’ risk mandates tend to prevent them from buying equities when prices are fluctuating widely.The VIX measure of expected volatility on Wall Street’s S&P 500 and its European equivalent hit multi-year highs last week before easing but a related index continues to send warning signals. – Reuters

The political uncertainty left by Prime Minister Fumio Kishida’s decision to step down will likely lead to a pause, rather than a full stop, to the Bank of Japan (BoJ)’s plan to raise interest rates steadily from near-zero levels.How long that pause could be will depend not just on how the ruling party leadership race plays out, but how market moves affect the political debate on the preferred pace of rate hikes, analysts say.Kishida, who hand-picked Kazuo Ueda as BoJ governor last year, said on Wednesday he will not stand in his ruling Liberal Democratic Party’s (LDP) leadership race in September.The BoJ worked closely with Kishida’s administration in preaching the benefits of higher wages. Days before the BoJ’s rate hike in July, Kishida said the central bank’s policy normalisation would support Japan’s transition to a growth-driven economy in a sign of his backing towards exiting ultra-low interest rates.Kishida’s departure leaves a political vacuum that heightens uncertainty on economic policy, and complicates the BoJ’s efforts to steer a smooth exit from easy monetary conditions in coordination with the government.Those seen as leading candidates have mostly endorsed gradual increases in Japan’s current ultra-low interest rates, partly as a means to keep sharp yen falls at bay.Shigeru Ishiba, seen as a frontrunner to succeed Kishida as next LDP leader and thus premier, told Reuters that the BoJ was “on the right policy track” in hiking rates gradually.Other leading candidates, such as party heavyweights Toshimitsu Motegi and Taro Kono, have also called on the need for higher interest rates and hawkish communication by the BoJ. The only advocate of aggressive easing is dark horse candidate Sanae Takaichi, who belongs to a party group that supported former premier Shinzo Abe’s stimulus policies.“Takaichi might be an exception, but most candidates don’t seem to be against the BoJ’s policy normalisation. If so, there won’t be much disruption to the bank’s long-term rate hike path,” said veteran BoJ watcher Mari Iwashita.The BoJ by law is granted independence from government interference in setting monetary policy. But it has historically come under political pressure to use its monetary easing tools to reflate the economy.That policy tension is in part driven by the government’s power to appoint BoJ board members including the governor, which then needs parliament approval to take effect.With the weak yen intensifying the strain on households through rising living costs, many politicians will likely nod to gradual rate hikes for now, analysts say.That means the BoJ will likely stay the course and keep raising rates — albeit at a slower pace than initially thought. A survey taken by think tank Japan Center for Economic Research on July 30-Aug 6 showed many economists projecting another rate hike by year-end.“The weak yen has been enemy No 1 for many lawmakers, which means there is less political pushback against rate hikes than in the past,” said a source familiar with the BoJ’s thinking.Data showing the economy rebounded in the second quarter on robust consumption helps justify further rate hikes, analysts say.The BoJ has too much to lose by ditching a carefully crafted plan to roll back a decade-long radical stimulus programme, which put an end to negative rates in March and led to an increase in short-term rates to 0.25% from 0-0.1% in July.The BoJ remains a global outlier on monetary policy. The central bank kept rates ultra-low even as its US and European counterparts hiked aggressively since 2022 to combat red-hot inflation. Now, the BoJ is raising rates while its peers have begun easing and yet it’s some way off from normalising policy.Governor Ueda has said further rate hikes are necessary adjustments of excessive monetary support, rather than a full-fledged tightening — a stance he is likely to maintain.But the BoJ also has good reason to ride out the storm by standing pat at the next policy meeting on Sept. 19-20, which will likely be close to the date of the LDP leadership race.The US presidential election may also heighten market volatility and keep the BoJ from acting at a subsequent rate review on Oct 30-31, analysts say.“The BoJ will hold off on rate hikes at least until December, when Japanese and US political events run their course,” said Toru Suehiro, chief economist at Daiwa Securities.The BoJ would also need time to build trust with the new prime minister, who may have to wait until November to be approved by parliament.An academic turned governor, Ueda has few associates in political circles, which heightens challenges in communicating smoothly with the new administration, some analysts say. There is no guarantee politicians will keep favouring rate hikes, if the yen’s downtrend reverses course.A spike in the yen, caused in part by the BoJ’s July rate hike, led to a plunge in stock prices that forced the central bank to back-track on its hawkish communication.“If the weak-yen tide reverses, some politicians may begin to question whether the BoJ needs to hike rates further,” said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities.— Reuters

The political turmoil unleashed by the dismissal of Thai Prime Minister Srettha Thavisin is likely to deal another blow to the already struggling economy, where millions of people drowning in debt have been waiting for long-delayed cash handouts.Southeast Asia’s second largest economy grew 1.5% in the first quarter of 2024 compared to a year earlier, slowing from the prior quarter’s 1.7% expansion and lagging regional peers.The tourism-dependent country of 66mn people has struggled to recover from the Covid-19 pandemic, and major growth engines, including an automobiles sector that is the largest in the region, are still spluttering.Tim Leelahaphan, senior economist at Standard Chartered Bank, said the political upheaval had cast doubts about the passage of the 3.75tn baht ($107bn) national budget for fiscal 2025, as well as the 500bn baht nationwide cash handout that was a flagship Srettha policy.“Political uncertainty and an unclear political outlook could have adverse implications for fiscal policy,” he said. The caretaker deputy finance minister said on Thursday the budget would not be delayed.Srettha’s ouster by the constitutional court on Wednesday came a fortnight after his government opened registrations for a scheme to give away 10,000 baht to 50mn Thais, a key election promise of his Pheu Thai party.Over 16mn people had applied to receive the “digital wallet” handout on the day registrations opened, crashing the system but signalling huge demand for the controversial scheme among ordinary Thais hurting from the slowing economy and high levels of personal debt.Household debt stood at 16.4tn baht, or 90.8% of GDP, at the end of March, among the highest in Asia.The central bank, which had bickered with Srettha’s administration over the scale of the handout, left its key interest rate unchanged at a more than decade-high of 2.50% for a fourth straight meeting in June.It is expected to hold the rate again when it meets on August 21.Ballooning household debt has also hit the car industry. Thailand is home to the factories of Toyota Motor and Honda Motor, and overall production in the sector has dropped for 11 straight months into June as local sales slumped.Exports of car and car parts also dropped 0.4% in the first half of 2024 from a year earlier, with main markets Malaysia and Vietnam down nearly 30% on the year, commerce ministry data showed.Srettha’s removal underlines the deep fissures between the conservative-royalist establishment, backed by the military, and populist parties like the Pheu Thai. Both camps have been locked in a decades-long tussle, triggering coups and bouts of unrest.In the absence of a lasting resolution to the conflict, Thailand’s long-term prospects remain uncertain, analysts say.“Thailand has still not found a formula to bridge the country’s deep political divide,” said Gareth Leather, Senior Asia Economist at Capital Economics.“Without one, uncertainty looks set to remain entrenched while economic populism is likely to become worse, with negative repercussions for investor confidence.” Thailand’s stock market has been the worst performing bourse in Asia so far this year, down 9.3%.Industrial sentiment also hit its lowest in two years in June, while consumer confidence reached an 11 month low in July.Parliament convened on Friday to elect a new prime minister, less than 48 hours after Srettha’s dismissal.A Pheu Thai-led 11-party alliance holds 314 house seats, allowing it elect a prime minister on Friday, providing the coalition remains intact. While on the streets Bangkok there is calm, analysts say the ongoing political drama could raise the risk of unrest. For now, some Thais are simply despondent.“Just look at the economy now,” said Wilai, 60, a book shop owner who gave only one name. “I think if politics continue like this, the economy won’t be able to move forward.” — Reuters

The popular insurrection that ousted Bangladeshi Prime Minister Sheikh Hasina and her Awami League government offers important lessons for the international community and neighbouring India. While the unrest was undoubtedly fuelled by the regime’s repressive and increasingly anti-democratic tactics, exemplified by its brutal crackdown on largely peaceful student protesters, the underlying causes of public discontent are often overlooked.The student protests initially focused on ending the job-quota system that reserved 30% of government jobs for veterans of Bangladesh’s 1971 War of Independence and their descendants. Although Hasina’s government abolished all quotas through an executive order in 2018, the High Court reinstated it in June this year, triggering mass demonstrations. A month later, the Supreme Court intervened, overturning the lower court’s decision and ruling that quotas must be reduced to 5% and that 93% of government jobs must be filled on the basis of merit.By then, however, the government’s brutal crackdown had claimed the lives of more than 300 protesters, including student activist Abu Sayed, fuelling public outrage and calls for Hasina’s resignation. On August 5, Hasina resigned and fled to India after the military refused her demand for even harsher measures.The sad irony is that Hasina – the daughter of Bangladesh’s first president, Sheikh Mujibur Rahman – was once a student leader and pro-democracy activist opposing a military regime. During her four terms as prime minister, she presided over a remarkable economic transformation, driven by a dramatic surge in garment exports and significant infrastructure investments that also spurred a sharp increase in women’s employment. Over the past two decades, poverty rates have been halved, and Bangladesh’s per capita GDP (in current US dollars) surpassed that of India in 2019. The country is poised to graduate from “least developed country” status in 2026.But Hasina’s authoritarian tendencies ultimately overshadowed her economic achievements. The execution of alleged “extremists”, along with the arrests and disappearances of lawyers, journalists, and indigenous-rights activists who dared to criticise the government, creating a climate of fear that intensified during the 2018 election.After further erosion of Bangladesh’s democratic institutions, the 2024 election was an outright sham. With most opposition parties either boycotting the vote or effectively barred from participating, Hasina won an overwhelming majority and secured a fourth consecutive term. Despite her government’s lack of popular legitimacy, the outcome was quickly recognised by India and other major powers.The country’s sputtering economy also played a pivotal role in the recent uprising. Over the past decade, rising inequality and unemployment, together with skyrocketing prices for essential goods, have intensified public anger over nepotism and rampant corruption. The government’s stubborn refusal to confront or even acknowledge these issues aggravated popular sentiment further.A key lesson from Bangladesh’s experience is that rapid GDP growth and robust exports alone cannot ensure broad-based prosperity. When the benefits of economic growth are concentrated at the top, most citizens see little improvement or even find themselves worse off, frustrating their rising expectations and underscoring the need for a fairer distribution of wealth and income.Another crucial lesson is that employment matters. Creating jobs is important, especially for young people, but so is ensuring fair wages and decent working conditions. When most people’s incomes stagnate or decline, the public tends to lose faith in official narratives of economic dynamism.Indian Prime Minister Narendra Modi’s government would be wise to heed these lessons, given India’s glaring inequalities of income, wealth, and opportunities. But Bangladesh should also serve as a warning to international organisations and external observers, who are often overly influenced by aggregate growth figures and openness to foreign investors.Crucially, analysts often overlook the role that the International Monetary Fund has played in Bangladesh’s recent economic struggles. In 2023, Bangladesh secured a $4.7bn bailout from the IMF, a move that some observers argued was unnecessary. Initially, these funds were intended to shore up the country’s foreign-exchange reserves, which had been depleted by the Covid-19 shock and the global spike in food and fuel prices.But the conditions attached to the IMF loan, which included greater exchange-rate flexibility, led to a sharp depreciation of the Bangladeshi taka and the introduction of a new pricing policy for petroleum products, both of which triggered a surge in domestic inflation.The IMF also demanded that Bangladesh reduce its budget deficit, leading to fiscal retrenchment that affected essential public services, including critical social programmes. Meanwhile, the central bank tightened monetary policy and raised interest rates to curb inflation, putting enormous pressure on small and medium-size enterprises and exacerbating the employment crisis. In June, the IMF approved the loan’s third instalment, totalling $1.2bn, and imposed 33 new conditions that Bangladesh must meet to receive the remaining disbursements.While these measures are purportedly designed to enhance economic “efficiency” and bolster investor confidence, history suggests that such outcomes are highly unlikely. On the contrary, the austerity policies championed by the IMF have fuelled economic insecurity and public anger across the developing world. The mass protests and political instability that have roiled countries like Kenya, Nigeria, and Ghana – all of which have implemented IMF programs – underscore the urgent need for the Fund to reconsider its approach.But the key political lesson here is that authoritarian leaders like Hasina are not invincible. They may suppress democratic protests, muzzle the media, undermine independent institutions, and attempt to control the judiciary, but they cannot remain in power indefinitely. In fact, the more ruthless such regimes become, the more they risk a popular backlash.Thus, Hasina’s downfall should serve as a wake-up call for leaders with authoritarian tendencies of his own. They should also take note: the long-term costs of aligning with undemocratic regimes for geopolitical gain often outweigh the short-term benefits.— Project SyndicateJayati Ghosh, Professor of Economics at the University of Massachusetts Amherst, is a member of the Club of Rome’s Transformational Economics Commission and Co-Chair of the Independent Commission for the Reform of International Corporate Taxation.

Fumio Kishida pushed through Japan’s biggest wage increases in decades, but it was not enough to make up for the impact the battered yen has had — or keep him in his job as prime minister.Kishida on Wednesday succumbed to months of woeful public support numbers and said he would step down next month. While his tenure was marred by scandals, including one involving party slush funds, the weak yen was arguably his undoing.The currency’s long slide to an almost four-decade low against the dollar last month has driven up prices of food and fuel and badly hurt consumer confidence in an economy just emerging from years of deflation.It is not clear who will succeed Kishida. But whoever does will face the pain of trying to tame higher prices from the yen.“The advent of exchange-rate inflation really, really hurt the prime minister,” said Michael Cucek, a professor specialising in Japanese politics at Temple University in Tokyo.The currency — under pressure from a wide gap between ultra-low Japanese rates and those in other major economies — ultimately blunted the impact of wage increases, the central plank of Kishida’s “new capitalism” policy. He repeatedly called on companies to increase pay, saying it was needed for broader economic growth.Big companies duly listened, delivering the largest annual increase in three decades this year at 5.1%, with smaller companies averaging 4.5%, according to the Rengo union group.The numbers do not include wages at many non-unionised, smaller companies where increases have been more modest, and in some cases non-existent.Yet real wages, which are adjusted for inflation, have barely moved, meaning that people were earning far less than headline numbers suggested once prices were taken into account. In June real wages rose for the first time in 27 months, by 1.1%.The government must continue to promote wage growth, Kishida told a press conference on Wednesday as he announced his resignation. That would ensure Japan could fully emerge from being a “deflation-prone economy” he said.Japan ranks well below the OECD average for annual wages, at around $43,000.“Wage increases were the notable achievement of the Kishida administration and I hope the next government will continue that,” said Takeshi Minami, chief economist at Norinchukin Research.“The era where a weaker yen leads to increased exports and a higher GDP has come to an end. I think we’re now at a stage where we just want to see the exchange rate stable.”The weak yen was a boon during Japan’s high-growth years, as it made exports cheaper in foreign markets and fattened the bottom line of companies, such as Sony and Toyota, when they brought earnings home.But Japanese companies manufacture more overseas now, which reduces the currency effect, and policymakers are more concerned about the yen exchange rate’s impact on households given the fragile economy.During Kishida’s term the central bank increased interest rates for the first time in 17 years. Its second raise, at the end of last month, helped spark a recovery in the yen that roiled global markets.From the perspective of households and consumers, though, the currency remains weak.“Yes, Kishida wasn’t popular, but will his successor be able to better handle Japan’s economy? Nobody knows,” said Tatsunori Kawai, chief strategist at au Kabucom Securities.Still, one should not forget the relative importance of some of the changes that took root during Kishida’s tenure, economists say.While wages could not keep up with inflation, the fact that Japan saw any increases in pay was significant, given it had spent years battling deflation.“You have to commend it,” said Koji Nakakita, a professor at Chuo University, about Kishida’s wage policy.The question now is whether Japan will speed up reforms or revert to its characteristic stop-start policy change.“What the market wants to see and what is good for the macroeconomy in general is that we see a ‘new wind’,” said au Kabucom’s Kawai.“Someone who is willing to make a big change in Japan.”

The US Navy’s deployment of new extremely long-range air-to-air missiles in the Indo-Pacific could erase China’s advantage in aerial reach, experts say, part of an intensifying focus on projecting power amid high tensions in the region.The AIM-174B, developed from the readily available Raytheon SM-6 air defence missile, is the longest-range such missile the United States has ever fielded and was officially acknowledged in July.It has three key advantages: it can fly several times farther than the next-best US option, the AIM-120 AMRAAM; it does not require new production lines; and it is compatible with the aircraft of at least one ally, Australia.Crucially, a weapon such as the AIM-174B, which can attack aerial targets as far away as 400km, outranges China’s PL-15 missile, allowing US jets to keep threats farther from aircraft carriers, and safely strike “high-value” Chinese targets, such as command-and-control planes.“The United States can ensure the safety of their important assets, such as carrier groups, and launch long-range strikes on PLA targets,” said Chieh Chung, a researcher at a Taipei-based think-tank, the Association of Strategic Foresight, using an abbreviation for the People’s Liberation Army.The West has not easily been able to do that until now.The AIM-120, the standard long-range missile for US aircraft, has a maximum range of about 150km, which requires the launching aircraft to fly deeper into contested territory, exposing aircraft carriers to greater danger of anti-ship attacks.Any type of South China Sea conflict, within the so-called First Island Chain, which runs roughly from Indonesia northeast to the Japanese mainland, means the US Navy would operate within few hundred kilometres of its Chinese adversary.Supporting Taiwan in an invasion would pull the Navy in even closer.The AIM-174B changes that equation, keeping PLA carrier-hunting aircraft out of firing range and even endangering their planes attacking Taiwan, Cheih said. That increased the likelihood the United States would get involved in a major conflict in the region, he added.“The big thing is that it lets the United States push in a little bit further” into the South China Sea during a conflict, said a senior US defence technical analyst, who declined to be identified because the matter is a sensitive one.“And it’s going to potentially change Chinese behaviour because it’s going to hold large, slow, unmanoeuvrable aircraft at greater risk.”Range advantageFor decades, the United States’ advantage in stealth fighters, first with the F-117 and then with the F-22 and F-35, meant that missiles such as the AIM-120 were all that was needed.The US military also leaned into developing the AMRAAM as a cheaper alternative to a new missile, drastically improving its performance over decades, said Justin Bronk, an airpower and technology expert at London’s Royal United Services Institute.The SM-6 is estimated to cost about $4mn each, says the Missile Defense Advocacy Alliance, while an AMRAAM costs about $1mn.European nations, which lacked access to stealth technology until recent years, developed the ramjet-powered Meteor missile, with a range of 200km, produced by MBDA.MBDA did not respond to a request for comment.The advent of Chinese stealth aircraft such as the J-20, and more important, the PL-15 missile it can carry internally — with a range of 250km (155 miles) or more — eroded the US edge, said Kelly Grieco, a senior fellow at the Stimson Center.Now a stealthy Chinese aircraft could theoretically spot non-stealthy US aircraft and shoot them down well outside the range where they could even fight back, she said.Even US stealth aircraft might be forced to fly dangerously close to fire their missiles.“If a Chinese fighter can outrange an American fighter, it means they can get the first shot,” she said. “It’s hard to outrun something that’s travelling at Mach 4.”The AIM-174B was developed to quickly address that need.The secretive Lockheed Martin AIM-260, a separate US Air Force program to develop an extremely long-range air-to-air missile small enough for stealth aircraft to carry internally, has been in development for at least seven years.Lockheed Martin declined to comment on the project.China is developing missiles with longer range than the PL-15, Bronk said, but the radar of launching aircraft may be unable to spot targets at such distances.“If you go too big and too heavy with the missiles, you end up trading off fuel” for the aircraft, he added.AvailabilityUsing Raytheon’s SM-6, originally designed for a ship-launched air defence role, means production lines are already available. Funding has already been earmarked for more than 100 SM-6 missiles a year.Raytheon declined to comment on how many AIM-174Bs would be produced or if existing SM-6s would be converted.So far it has only been shown on US Navy F/A-18E/F Super Hornet aircraft, which are operated by the US and Australian militaries.The United States sees Australia as a crucial ally and location for projecting power into the South China Sea, and is investing hundreds of millions of dollars in military infrastructure there.Australia’s defence ministry said it “works closely with the US to understand capability options available for Australian consideration”.The US Defence Department referred questions about the AIM-174B to the US Navy.The Navy said the missile was “operationally deployed” but declined to comment on whether it would be supplied to allies, whether it would be integrated onto other aircraft, and how many AIM-174Bs it wanted each year.The versatility of the SM-6, which has also been used to hit ships, land targets and missiles, opens up possibilities beyond the AIM-174B, said Peter Layton, a defence and aviation expert at the Griffith Asia Institute.For instance, if fitted with an anti-radar seeker, it could attack and disrupt surface-to-air missile batteries from extremely long range.For now, though, adding the AIM-174B to the US Navy’s arsenal, even if not yet in large numbers, changes the calculus of a regional conflict, the senior technical analyst said.“If this is enough to push (China’s high-value) aircraft way back, then you don’t need many,” the analyst added.“Because the threat has caused the adversary to change their behaviour... It makes a South China Sea scenario easier.” — Reuters

Democratic presidential candidate Kamala Harris and Republican rival Donald Trump are locked in a tight race ahead of the November presidential electionand some on Wall Street are picking sides. Here’s what we know about how some of Wall Street’s top bosses are leaning.• Bill Ackman, CEO, Pershing Square Capital ManagementBillionaire hedge fund manager Ackman endorsed Trump last month shortly after the former president was shot in the ear at a rally, a major shift from January 2021 when Ackman called for Trump to resign after his supporters stormed the US Capitol.Ackman said he had recently spent a few hours with Trump and sat next to him at a recent fundraiser but did not explain the reasoning behind his endorsement. Ackman also gave $1mn to Congressman Dean Phillips’ long shot primary campaign against President Joe Biden.A spokesman for Ackman declined to comment.• Roger Altman, Evercore Co-FounderSpeaking to CNBC last month, Democratic donor Altman said he was backing Harris and said both campaigns would have all the money they need. “It won’t be money that decides this race,” he added. An Evercore spokesperson did not respond to a request for comment.Marc Andreessen, General Partner, Andreessen HorowitzSilicon Valley venture capitalist Marc Andreessen who has previously voiced support for Democrats including Hillary Clinton told employees last month that he was donating to Trump Political Action Committees based on the former President’s tech policies, several outlets reported. A spokesperson for Andreessen declined to comment further.• Scott Bessent, Ceo Key Square Capital ManagementHedge fund manager Bessent is acting as an unofficial adviser to Trump’s campaign and is seen as a possible Treasury secretary if Trump wins. Bessent told Bloomberg this month that he has advised Trump on how to get a grip on US debt. “This election cycle is the last chance for the US to grow our way out of this mountain of debt,” he said. A representative for Bessent did not immediately respond to a request for comment.Blackstone bossesLong-time Trump donor and CEO of private equity giant Blackstone Stephen Schwarzman announced in May that he was supporting Trump, citing economic, immigration and foreign policy concerns, despite saying in 2022 that he would not back Trump in 2024. He plans to donate to him in this cycle, according to a person familiar with the matter.Meanwhile, Blackstone president and Schwarzman’s deputy Jonathan Gray, has contributed to Harris, according to a second source.A Blackstone representative declined to comment.• Jamie Dimon, JPMorgan CEOIn an unusual move, the Wall Street bank CEO who generally leans Democrat called in a Washington Post column this month for the next president to “restore our faith in America” and for the next administration to draw from both political parties. But he stopped short of endorsing either candidate. A JPMorgan spokesperson declined to comment.Blair Effron, Co-Founder, Centerview PartnersA long-time Democratic backer, Effron is supporting Harris, according to several reports. Effron previously backed Harris when she ran in 2020, praising her “great leadership” and personal qualities in a 2020 interview with Bloomberg.• Ken Griffin, CEO, CitadelThe hedge fund billionaire and Republican mega-donor who has expressed scepticism about Trump in the past said in May that he had not donated to Trump’s election campaign. So far, Griffin is focused on supporting Congressional Republican races, a source familiar with the matter said.Marc Lasry, CEO, Avenue Capital GroupLasry, a long-time Democratic fundraiser who supported Harris during her first presidential bid, is backing her again for 2024. Lasry and his wife are planning to host fundraisers for Harris, the Journal reported this month. Representatives for Avenue Capital did not immediately respond to a request for comment.• Howard Lutnick, CEO, Cantor FitzgeraldThe investment banking chief, who says he has known Trump for decades, hosted a fundraiser for Trump in the Hamptons this month and co-hosted a fundraiser in Palm Beach, Florida, earlier this year with hedge fund billionaire John Paulson, Bloomberg reported. Lutnick told Bloomberg Television that the Hamptons guests would pay $25,000 to attend, $50,000 for a photo with Trump and $250,000 to sit at a table and chat with Trump.“It’s a hot race now...and I’m trying to help every way I can,” he said.A Cantor spokesperson declined to comment.• Lazard CEO Peter Orszag and Lazard President Ray McGuireThe two executives have said that they are both personally supportive of Harris as a candidate. Orszag previously held government roles under the Democratic Clinton and Obama administrations. A spokesperson declined to comment further.John Paulson, billionaire investorPaulson has long been a Trump backer and fundraiser, supporting and advising the former president during his 2016 election campaign. Paulson, who has also been floated as a possible Treasury secretary pick if Trump wins, has cited energy policy and the US trade deficit as key issues. A spokesperson for Paulson declined to comment.• Paul Singer, Founder, Elliott Investment ManagementA Republican mega-donor, Singer vigorously opposed Trump in 2016 arguing his trade policies would be disastrous and backed Nikki Haley’s rival bid for the Republican presidential nomination. However, Bloomberg reported last month that Singer met with Trump to discuss donating to his campaign. Singer declined to comment.• Tom Steyer, financier and billionaireThe billionaire climate activist, who ran for the Democratic nomination in 2020, endorsed Harris on X last month. “I’ve known Vice President Harris for over 15 years and have watched as she defended the rule of law, advanced real freedom, and delivered hard fought results.”Steyer could not be reached for comment.• Alex and George Soros, investorsAlex Soros, son of Democratic mega-donor George Soros, quickly came out in support of Harris shortly after Joe Biden exited the race, saying on X it was time to unite around Harris and beat Trump. His father also supports Harris.

Qatar Television (Qatar TV) is celebrating the 54th anniversary of the launch of its official broadcast on Aug 15, 1970, around two years afterthe launch of Qatar Radio broadcasting in 1968.Since that day, Qatar TV has become a permanent guest in every home, ministries and government institutions across the country through its news bulletins and other diversified programmes along with Arab and foreign series and films that made Qatar TV a leading and distinguished channel on the region’s screens.This date represents a proud memory for Qatari and Arab viewers. They were on time with a new Arabic TV that would join the list of Arabic and international channels to convey an integrated and honest image of Qatar to its viewers, in addition to conveying the aspirations and ambitions of its citizens, their past, present, culture, and heritage of their ancestors.Qatar TV, like other national media, has received the full sponsorship of His Highness the Amir Sheikh Tamim bin Hamad al-Thani and all officials in charge of the Qatar Media Corporation, to carry out its mission efficiently, and to continue its path and develop its programs and services provided to viewers. Also, Qatar Media Corporation is keen on keeping the channel true to its message, to its viewers, and to excellence. The channel continues the development and modernisation of its technologies, content, and approach to the Arab viewer, in service of national and Arab goals, as well as human aspirations.In an interview with Qatar News Agency (QNA), Director of Qatar TV Ali bin Saleh al-Sada noted the importance of celebrating the anniversary of Qatar TV as it has a special impact not only on those working in the television and media sector but also on all the Qatari people and residents of Qatar, stressing the importance of this annual occasion to one of the most important televisions in the region, as recognized by many.He added that it is a special memory for them, the employees in Qatar TV, which was and still is their second home as it is their place of work and also the venue where they communicate with all viewers in Qatar and beyond.Asked about the most prominent updates and developments that have been introduced to Qatar TV recently as well as the objectives of these updates, he said that Qatar TV is working on all that can update its work, whether human or technical.Modern devices, equipment and technologies are developing continuously and rapidly, he said, adding that viewers have noticed many updates during the past period both in terms of image or content, and they are currently working on developing their work by establishing new studios equipped with the latest and most accurate filming tools and compatible with modern and developed forms and consistent with the objectives of Qatar TV.In addition, the process of developing and updating the various broadcasting and transmission devices is underway at full speed, he said, hoping that the fruits of this will begin to appear soon and be noticed by the viewer.Regarding new plans and programmes to develop television work in the next phase, the Director of Qatar TV said there is a lot that the audience will see soon in the field of programme development, through a new programme cycle, in which there are many qualitative programmes that will be broadcast for the first time, including live programmes, recorded programmes, documentaries, and new dramatic productions, stressing that the programmes of the new cycle will meet the interests and aspirations of viewers, while noting that there are many changes that have occurred in the daily live programmes.On Qatar TV’s Arab and Gulf viewership, al-Sada said that it goes back to many years now thanks to Qatar TV’s valuable programmes and shows whose appeal outreaches Qatar, its joint coverage with other Gulf TV stations, and the desire to follow various major events that took place in Qatar in recent years, such as the AFC Asian Cup, of which Qatar TV provided diverse and extensive coverage, thus, broadening the channel’s viewership beyond Qatar.Furthermore, al-Sada expressed his belief that this viewership will increase even more in the coming years, given the state’s support for the tourism sector.As for Qatari talents and professionals within the channel, he said that Qatar TV is proud to have been, and continues to be, one of the leading state institutions to open its doors to Qatari skills, adding that as the channel is marking its 54th anniversary, it cannot but celebrate the first generation of Qatar TV personnel who helped establish and make the channel what it is today, with Qatar TV forever proud of its members.The Qatar TV director said that the channel has distinguished national staff, with young and brilliant Qatari minds running many of its programmes, calling on national talents who wish to engage in media work to join the ranks.Regarding incentives to attract the youth to work in television, he said that media work is a passion before being anything else, it is not just a job, rather much more, however, to answer the question, he said that Qatar TV offers many good incentives and initiatives, adding that new staff receive training and are given the opportunity to try out working in various departments until they find their fit.Al-Sada added that the channel also provides Qatari youth with the chance to be close to viewers through its programmes, stemming from the belief in the youth’s crucial role in developing the national media scene.As for Qatar TV’s future plans and long-term ambitions, he said that there is an abundance of amazing plans and ideas, with work underway day and night to materialise them as soon as possible. He added that the main focus is on updating and aligning the channel with the Qatar National Vision 2030 by introducing diverse programs that resonates with viewers’ daily lives.Moreover, he said that the channel aims to increase the air time dedicated for live programmes and intensify drama production, in addition to attracting more Qatari youth and expand presence on digital platforms. Furthermore, al-Sada pointed out that Qatar Television aims to embody the statement of His Highness the Amir Sheikh Tamim bin Hamad al-Thani that Qatar deserves the best from its people, the principle by which Qatar TV goes.

Every US presidential election is consequential, but American voters face an unusually weighty decision in 2024. The outcome will have implications for US foreign policy, social policy, and the integrity of the political system itself. But none of its consequences will be more profound or far-reaching than on global efforts to combat climate change.As president, Donald Trump pulled the United States out of the Paris climate agreement, while the US under President Joe Biden rejoined it. Trump has vowed to expand oil and gas production, and his campaign has vowed that he will again withdraw the US from the Paris accord if he wins a second term.By contrast, Vice-President Kamala Harris, the Democratic nominee, supported the Green New Deal, an ambitious congressional plan for tackling climate change, while serving in the Senate in 2019. As California’s attorney general, she investigated the oil industry, securing a settlement from a subsidiary of British Petroleum for underground gas tank ruptures, as well as indictments against a Texas-based pipeline operator for an environmentally damaging oil leak.Clearly, the positions of the two candidates on the climate crisis could not be more different.But one might ask: what’s so catastrophic about a newly re-elected Trump pulling the US out of the Paris accord a second time, if the next president could, like Biden, simply rejoin it? In fact, Trump’s advisers are aware of the possibility. They are reportedly drafting executive orders that would remove the US not just from the Paris climate agreement but also from the United Nations Framework Convention on Climate Change, the foundation on which the Paris agreement is built.Reversing that step would then require approval by the US Senate. And Senate approval cannot be taken for granted, given the ample representation in that chamber of oil- and gas-rich states.Moreover, a Trump presidency would put other bilateral climate agreements, actual and potential, at risk. Currently, a prospective US-European Union climate deal, intended to reconcile the respective economies’ different approaches to reining in greenhouse-gas emissions, is in suspended animation, owing to the approach of the US election.The EU has combined its cap-and-trade permit system with a Carbon Border Adjustment Mechanism (CBAM) – in effect, a tax on the carbon content equivalent of imports from countries failing to put an adequate price on emissions. A carbon price being a nonstarter in the US Congress, the Biden administration has instead proceeded with subsidies for low-carbon production of steel, aluminium, and other products. Trump is unlikely to persist with climate-friendly subsidies, much less with negotiations. The EU would then apply its CBAM to US exports in full. Inevitably, US retaliation would result.Late last year, moreover, the US and China successfully negotiated the Sunnylands Statement affirming their commitment to work together to combat climate change. This commitment by the world’s two largest economies to limit emissions was predicated, in each country’s case, on the willingness of the other to do likewise. Significantly, China agreed for the first time to add non-carbon greenhouse gases – including methane, nitrous oxide, and hydrofluorocarbons used in the manufacture of air conditioners – to its prior agreements.Trump, of course, has famously insisted that China “cheats” its international partners. If the US reneged on its climate commitments, China would have every incentive to do likewise. And Trump’s proposed 60% tariff on all imports from China would be another nail in Sunnylands’ coffin.Harris, on the other hand, would seek to reinvigorate these negotiations, at least if her support for the Green New Deal is any guide. But she could also do more. She could demonstrate her independence from her predecessor by removing Biden’s punishing tariffs on imports of Chinese electric vehicles, lithium-ion batteries, and solar panels (which also cover solar equipment produced by Chinese companies in Malaysia, Cambodia, Thailand, and Vietnam).Various rationales are offered for these tariffs. They secure domestic supply chains. They offset unfair Chinese subsidies and dumping. They give US factories time to move down their production learning curves and cut costs in key industries that would otherwise be dominated by a strategic rival. They hold out hope of creating additional manufacturing jobs. These are worthy goals. But they come at the cost of impeding climate-change adaptation and abatement of emissions. Shutting out economical Chinese EVs encourages US motorists to stick with internal combustion engines. Taxing Chinese solar panels discourages American households from installing lightweight plug-in panels on their balconies, as Germans do.Thus, President Harris would face a dilemma. She would have to decide whether to prioritise domestic manufacturing jobs and economic independence from China over the fight against climate change. There is no avoiding the tradeoff. But, then, this is the type of question that presidents are elected to decide.

Low resale values for electric cars have pushed the leasing firms that drive Europe’s auto market to double prices over the last three years and some are threatening to quit the business altogether if regulators force them to go electric too fast, industry executives say.The jump in prices for electric car leases comes as cuts in subsidies for new EVs in key markets such as Germany are hitting sales and risks stalling Europe’s electric transition, just when Brussels wants to step on the accelerator, the executives say.“If we were pushed very, very hard, that everything has to be electric too soon...my shareholders will say ‘we don’t want to take the risk’ and we’d be out of the market,” said Tim Albertsen, CEO of Ayvens, one of Europe’s largest auto leasing firms. “Let’s be honest, without us, who will take the risk?”Ayvens, which is majority owned by French bank Societe Generale, has a fleet of 3.4mn cars, of which about 10% are EVs.Leasing companies play a pivotal role in Europe as 60% of new cars of all fuel types are leased, according to calculations by environmental group Transport & Environment based on data from market research firm Dataforce.When it comes to EVs, the proportion is estimated to be as high as 80%.According to data provided to Reuters by Dataforce, in the 16 European markets where it can identify fleet registrations — including Germany, Britain, France and Spain — 60% of new EVs go to corporate fleets and commercial buyers. Experts say those buyers almost exclusively use leases and about half of the remaining sales to private buyers are also leases.In markets with no EV subsidies for private buyers, the dominance of corporates is even more pronounced. In Britain and Belgium, for example, individuals accounted for just 23% and 8% of new EV purchases respectively in 2023, Dataforce said.The price of a lease is designed to account for the depreciation of a vehicle over the typical three-year lease period, based on estimated resale prices, or residual values.But if second-hand prices end up being lower than anticipated when the lease ends, leasing firms take a financial hit when they get the vehicle back.For various reasons — from Tesla’s price cuts to concerns about charging infrastructure and battery life to the influx of more affordable Chinese EVs — second-hand electric car prices have been sliding in Europe since hitting a peak in October 2022.According to figures provided to Reuters by data firm Autovista, resale values for EVs in Germany in early July were 24% below pre-pandemic levels and 30% lower in Britain.That’s in stark contrast to second-hand petrol models, which remained about 15% more expensive in both markets.“People have become more accepting of used EVs, but they’ve got to be cheap,” said Gary Cambridge, a partner at used car dealer Cambridge Motors in London. “If they’re expensive, people don’t want them.”Leasing companies approached by Reuters declined to give specific details about any losses on EV contracts from the slump in residual values. Signs of the electric pain have shown up in disclosures by some rental companies.Hertz has reported writedowns of about $150mn for the roughly 20,000 EVs it has been selling off at greatly reduced prices while Sixt said lower residual values for EVs cut its 2023 earnings by €40mn ($44mn).Bart Beckers, deputy CEO at Arval, the leasing company owned by French bank BNP Paribas, said losses from low EV resale values were currently limited in number, given EVs are only a small portion of their overall portfolio.“But the amounts are not insignificant,” he told Reuters. “Like other leaders in the market...(Arval) has been forced already to increase prices because of lower residual values.”Like Ayvens, EVs only make up about 10% of Arval’s fleet of 1.7mn vehicles.Some automakers have provided cash compensation to leasing companies for slumping EV values, industry executives say. Reuters reported in May that Tesla has offered discounts and other ways to mitigate losses to leasing companies, including Ayvens, though CEO Albertsen declined to say what they were.But the executives say leasing companies still bear the risk for EV resale values, which is why prices have climbed.Leasing firms approached by Reuters declined to give specifics about price rises for EVs as the subject is sensitive.In Germany, Europe’s biggest auto market, data provided to Reuters by German think-tank CAR Center Automotive Research show that EV leases have jumped in the last three years.In August 2021, a lease for a €45,000 EV cost €284 per month, well below the €473 for an equivalent fossil-fuel model. Now, the cost for the EV has more than doubled to €621 while the fossil-fuel car has fallen to €468.German EV sales fell 16.4% in the first half of 2024 after the government abruptly axed subsidies for consumers in December and that decline has hit the overall EU trend.Sales of fully electric vehicles in the EU rose to 14.6% of new car sales in 2023 from 6.1% in 2020 but that slipped to 14.4% in the first half as EV sales rose a tepid 1.3%.Albertsen at Ayvens said the company was now leasing EVs for longer than combustion-engine cars to reduce resale risks.It has also started to lease EVs out once or twice more “at a more affordable rate” and keep them in its portfolio longer, possibly up to eight years, he said.Such is the concern about potential losses, RVI Group, a company based in Stamford, Connecticut that offers insurance guaranteeing a specific residual value for an asset, opened an office in Europe last year to field coverage queries.Wei Fan, RVI’s executive vice president for passenger vehicles, said he’d seen more requests from Europe in the past three years — all from leasing companies and banks — than in the previous 14 years worldwide.He said he expected EV price volatility to continue for the next five to 10 years as the electrification process plays out.Leasing firms say they are concerned, however, that an European Commission consultation on how to speed up EV adoption by corporate fleets could result in mandatory EV sales targets, as this would increase the resale risks they already face.“The larger the share of EVs in their portfolios becomes, the bigger this problem is going to be,” said Richard Knubben, director general of Leaseurope, an umbrella body in Brussels that lobbies on behalf of car leasing and rental groups.The European Commission’s “Greening corporate fleets” open public consultation, which included looking at possible measures to accelerate EV adoption, ended on July 8.Brussels-based Transport & Environment (T&E) wants the Commission to mandate that Europe’s large corporate fleets and leasing companies go 100% electric by 2030.Stef Cornelis, T&E’s electric fleets programme director, said forcing fleets to electrify would result in more used cars for consumers and speed up the EV transition.A Commission spokesperson said the consultation was meant to identify substantive market shortcomings that warrant action but was not geared at gauging support for any kind of initiative.The poor performance of Green and centrist parties in European elections in June has raised questions about the fate of the EU’s 2035 ban on fossil-fuel cars, so it is uncertain whether the Commission would push for a 100% mandate.But leasing companies are taking the threat seriously.Leaseurope said an EV mandate would significantly damage leasing companies and Arval’s Beckers says that, at a minimum, it would have to raise future lease rates further.“Simply put, prices would go up,” he said. “That would discourage corporate fleets from continuing to lease.” — Reuters

Stalled efforts to expand companies’ use of carbon credits to offset greenhouse-gas emissions are raising the prospect that some will backtrack or abandon targets to shrink their carbon footprint.Since 2015, when governments agreed in Paris to try to keep the world from warming more than 1.5C, more than half of the world’s largest 2,000 publicly listed companies have announced targets to cut their emissions to zero on a net basis by 2050.But environmental advocates are expressing concerns that companies are falling behind on those targets. Companies are in turn complaining that clean technologies are not being rolled out on time and that government policies are not doing enough to support the transition away from fossil fuels.Proponents of carbon offsets argue they can help companies meet their targets when efforts to slash their emissions fall short. Companies buy the offsets, which are generated by projects that absorb carbon or reduce emissions, such as reforestation and switches to cleaner fuels for domestic cookstoves.The Science-Based Targets initiative (SBTi), however, dealt a blow late last month to efforts to expand the use of offsets. The non-profit, which audits companies’ emissions targets, said its research found that carbon offsets are largely ineffective in reducing emissions because their climate benefits cannot always be verified. It delayed a final decision to 2025 on whether to allow companies to use offsets to meet emissions targets.This represented a U-turn for the SBTi, whose board of trustees had said in April it wanted to allow companies greater use of offsets in target-setting. It currently allows companies to use offsets only after their targets have been met by directly reducing their emissions. Nearly 6,000 companies use the SBTi to validate emission targets. More than 2,000 companies have committed to getting their targets validated going forward.The SBTi is the largest independent, third-party validator of corporate net-zero plans and considered by many to be the gold standard given its focus on ensuring any strategy aligns with climate science.Some companies are likely considering paring back their net-zero ambitions if they are not allowed to use carbon offsets more widely, said Tommy Ricketts, CEO of carbon-ratings agency BeZero Carbon.“There are a lot of companies out there going, ‘we can’t deliver against our targets. We have two options. We look for another way of doing it or we quietly leave the building,’” Ricketts said. He declined to name specific companies.An SBTi survey of companies published this year suggested cutting emissions from a company’s supply chain was the biggest barrier to setting a net-zero plan.An SBTi spokesperson declined to comment on the impact of not allowing carbon offsets toward meeting targets and said its review of them was ongoing. “(The current framework) will remain unchanged until the revision process is fully complete next year,” the spokesperson said. John Lang, who tracks net-zero goals for research group the Energy & Climate Intelligence Unit said that, as a result of the SBTi’s stance on carbon offsets, he expected more companies will pare back their near-term emission targets. They may, however, focus more on realistic actions to cut emissions, he said.“Recalibrating targets doesn’t necessarily mean regressing on ambition.”Thomas Day, an analyst at non-profit climate research group NewClimate Institute, said companies that are scaling back their efforts are often just abandoning unsubstantiated “lofty-sounding ambitions”.Offsets can come in particularly handy when it comes to companies’ supply-chain emissions, referred to as Scope 3. They make up the largest part of a company’s carbon footprint and are hard to slash, because companies often do not have control or influence over vendors and customers. Broader use of carbon offsets could expand the market to $100bn a year by 2030 from $723mn last year, according to carbon-offset broker, project developer and consultant South Pole.South Pole CEO Daniel Klier said the lack of near-term clarity on validation could lead to carbon offset volumes stagnating.“The fact (SBTi officials) say we may get some clarity in 2025 is a major problem, because that means there’s probably a year without investment in nature and carbon removals. Nobody will do anything until they have guidelines,” Klier said.

When Elon Musk endorsed Donald Trump for president last month, the Tesla founder and chief executive backed a candidate who vows to “drill, baby, drill,” “end the electric vehicle mandate” and reduce subsidies of the sort that helped Tesla become the US’s dominant EV manufacturer.So instrumental have government loans, tax breaks and other EV policies been to Tesla’s fast growth that despite Musk’s gradual embrace of the former president and his Republican Party rhetoric in recent years, the company continues to lobby the US and state governments for benefits championed by the Democratic Party.In February, for instance, Tesla in a filing with the US Environmental Protection Agency, or EPA, urged the Biden administration to allow California to pursue stricter vehicle emissions rules than the rest of the country — an idea Trump opposes.Months earlier, in a previous filing with the agency, Tesla lobbied the government for regulations that would ban the production of most new gasoline cars by 2035 — the so-called “EV mandate” that Trump and others on the American right have criticised.The disparity is hardly the first time that the billionaire entrepreneur — himself increasingly dismissive of subsidies — has sent mixed signals on business and politics.“Elon tends to say he’s hostile to subsidies while Tesla is gobbling them up like a hungry Godzilla,” said Mike Murphy, a Republican strategist who runs the EV Politics Project, a Los Angeles-based advocacy group that seeks bipartisan support for electric vehicles.People familiar with Musk’s management at the carmaker told Reuters his approach to subsidies is pragmatic, a willingness to accept public money if it’s there for the taking. Musk’s willingness to overlook outright Republican opposition to an industry he helped pioneer, meanwhile, signals a broader focus on goals that may not dovetail with the immediate interests of his businesses.“Tesla is not the endgame for him,” said Andrew Ward, a management professor at Lehigh University, noting Musk’s holdings in sectors ranging from artificial intelligence to space exploration to neuroscience. Musk could “sacrifice some of the short-term interest in Tesla,” Ward added, “if it’ll satisfy the long-term interests of his ambitions.”Musk and Tesla didn’t respond to requests from Reuters for comment. A spokesman for Trump didn’t respond, either. A White House spokesman declined to comment.The growing bond between Trump and Musk could be on display when the Tesla boss interviews the Republican candidate on X, Musk’s social media platform.It’s unclear exactly what ambitions Musk could seek to advance through his increasingly vocal rejection of progressive platforms — from EV subsidies to identity politics.His support for Trump, once tenuous, solidified in July, when Musk, after the failed assassination attempt against the former president, endorsed Trump and said he would fund a political action committee that federal records show has spent $21mn to support him and oppose the Democratic ticket.Days after the endorsement, one user on X asked Musk if he would comment on Trump’s views on EVs. “It will be fine,” Musk responded.Whatever Musk’s endgame, the public record clearly shows that Tesla, since its founding over two decades ago, has benefitted from government assistance, largely because of its role in moving the US toward cleaner cars. Tesla’s first major manufacturing facility, in Fremont, California, was developed with the help of a $465mn loan from the US Department of Energy, repaid three years later.More recently, Tesla has reaped almost $9bn since 2018 by selling what are known as “regulatory credits,” securities filings show. The credits, awarded in the US by the federal and state governments to manufacturers who surpass increasingly strict emissions rules, can be sold to other carmakers who are unable to comply.“There was no Tesla without California’s regulatory bodies,” California Governor Gavin Newsom said at a 2022 conference, citing the importance of the state’s credits to the carmaker’s finances.A Reuters review of Congressional lobbying records — and Tesla’s public comments to federal and state regulators — shows that the company has continued working to shape public policy in favour of such benefits.Earlier this year, in a February filing with the US Department of the Treasury, Tesla said that sustained government support, by accelerating the transition away from fossil fuels, would “mitigate greenhouse gas emissions, and protect the country’s public health and welfare.”Musk once criticised Trump for dismissing the challenge of climate change.In June 2017, five months into Trump’s presidency, Musk quit White House advisory panels because the administration withdrew from the Paris Agreement, a landmark 2016 treaty meant to tackle climate issues globally. “Climate change is real,” Musk wrote at the time. “Leaving Paris is not good for America or the world.”After Trump lost his 2020 re-election bid, Musk told Fortune magazine he was “super fired up” about President Joe Biden’s climate-change agenda and optimistic “about the future of sustainable energy.”Musk soon soured, though, angry that the White House, in a well-documented episode, didn’t invite Tesla to a 2021 gathering of EV makers. By December of that year, Musk distanced himself from Biden’s initiatives and criticised plans for what would eventually become the Inflation Reduction Act, or IRA, a major economic stimulus package built in part upon subsidies for clean energy.“I would just can this whole bill,” Musk told the Wall Street Journal then, saying Tesla didn’t need public money.Since the law passed in August 2022, however, Tesla has sung a different tune. In formal comments to the Treasury and the Internal Revenue Service, the company praised the law and said it would seek “continuing engagement...to ensure these benefits of the IRA are fully realised.”Among other benefits under the law, EV buyers can get subsidies of up to $7,500 per vehicle if purchasers meet certain income requirements. Tesla has said that tax credits laid out in the law for battery manufacturing could generate as much as $250mn for the company per quarter. Musk himself, in a conference call last year, said the incentives “could be gigantic.”Other formal comments with various federal agencies have continued to seek government help. A July 2023 filing with the EPA appealed to sympathy for the downtrodden: Tesla lobbied the agency for stricter emissions limits to improve “poor air quality in many urban areas, including areas with vulnerable populations.”For Tesla, emissions controls aren’t just about the environment.By raising demand for regulatory credits among manufacturers of less efficient vehicles, stricter limits help Tesla continue to earn billions of dollars through sales of those credits to rivals, like General Motors and Stellantis. In the last quarter alone, sales of the credits generated $890mn for Tesla, according to a July securities filing. The company reported net income that quarter of $1.5bn.In an email, GM said it purchases such credits to keep up with changing market and regulatory conditions. A Stellantis spokesperson declined to comment on past credit purchases but said the company is no longer buying credits in the United States.Trump has opposed stricter emissions rules and criticised subsidies for EV manufacturers. Shortly after endorsing the former president, Musk echoed the sentiment. “Take away the subsidies,” he wrote on social media, a week before Tesla reported its $890 million credit windfall. “It will only help Tesla.”Some shareholders have disagreed. Ross Gerber, an outspoken investor whose firm as of the first quarter owned a roughly $58mn stake in the carmaker, told Reuters that Musk’s support for the former president “is 100% contrary to his own personal financial interests” and those of “one of the most important companies for clean energy, which is Tesla.”In interviews, three former Tesla employees who worked on the company’s public policy efforts told Reuters that what some see as contradiction is more of a tussle between ideology and pragmatism. As a proponent of free markets, they said, Musk is by nature opposed to most government intervention. If free money or other benefits become available, though, Tesla would be foolish not to take advantage of them.“He’s a very sensible person,” one of the former employees said.Still, Tesla’s most recent lobbying efforts contradict Trump’s discourse, like his repeated calls to “end the electric vehicle mandate.” Although no such mandate exists, the Biden administration and states including California have sought to encourage a gradual phase-out of the production of vehicles that run on fossil fuels.In its July 2023 filing with the EPA, Tesla called outright for an end to the manufacture of gasoline cars, calling the measure “essential” to address the “rapidly escalating climate crisis.” Musk, for his part, has grown circumspect, writing on social media in June: “Climate change risk is overstated in the near-term, but probably accurate in the long-term.”The dissonance isn’t limited to Musk’s environmental views.In a May 2022 filing with the California Air Resources Board, that state’s emissions regulator, Tesla touted itself as “a leader in creating a diverse and inclusive workplace.” Many of its employees, it said, hail “from communities that have long struggled to break through the historic roadblocks to equal opportunity.” It wrote that “communities of colour disproportionately bear the impacts of air pollution.”The filing came just days after Musk, increasingly disdainful of identity politics, made clear in a social media post that he could no longer support Democratic candidates. Democrats, he wrote at the time, are “the party of division & hate.”In the weeks since Vice-President Kamala Harris succeeded Biden as the party’s candidate for the White House, Musk has made his distaste for her bid clear. Last week, after an X user posted a video montage of Harris speaking about “equity” and “equality,” Musk replied: “Kamala is quite literally a communist.” — Reuters

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Historically, technological revolutions have brought higher carbon dioxide emissions – with the first Industrial Revolution being powered by coal, and the second heavily by oil. Will artificial intelligence (AI) – the general-purpose technology of our time – do the same? The early signs are concerning. Microsoft’s CO2 emissions jumped some 30% since 2020 as the company invested in AI infrastructure, and Google’s are up almost 50% over the past five years.But there are two countervailing forces to consider: demand and efficiency. While demand has grown, efficiency has improved. Chips from companies like Nvidia are getting better, and the next generation is expected to be five times faster than the current one. Equally, OpenAI and other industry leaders are making their models more efficient to train and run.Still, given the surging demand for AI, energy consumption worldwide could still grow, even as models become more efficient. What really matters is emissions, and to project those, we need to know how the electricity to power AI data centres will be generated, and how AI will impact carbon-intensive industries.According to the International Energy Agency, data centres accounted for roughly 1-1.5% of electricity use worldwide in 2023, and this share is sure to grow in the short term. Microsoft, Google, and Meta nearly doubled their cumulative electricity consumption between 2020 and 2022, and that was before the arrival of ChatGPT. Since then, they have only strengthened their commitments to expanding this infrastructure.While data centres represented roughly 1% of energy-related CO2 emissions in 2023, the electricity systems that power them are rapidly decarbonizing. In the United States, 41% of electricity was produced from zero-carbon sources in 2023 – marking a one-quarter increase over the past decade – and in Europe, the proportion is closer to 60%. In the US, Europe, the United Kingdom, and China, renewables are the fastest-growing means of producing electricity.At the same time, Goldman Sachs expects data-centre energy demand to grow 15% per year until 2030, with AI accounting for one-fifth of that growth. Even if two-fifths of US data centres’ energy needs are met by renewable energy, AI infrastructure would emit roughly 26mn tons of additional CO2 annually.But while that is a huge amount in absolute terms, it needs to be put in context. The additional emissions from AI would represent 0.4% of current emissions, and less than the “scope 1” (direct) emissions of any of the three biggest US airlines. Notwithstanding the breathless headlines about AI’s carbon footprint, America’s energy system is so large that the direct impact of AI represents more of a perturbation than a systematic change.Moreover, there is compelling evidence that AI can reduce emissions across a variety of hard-to-decarbonise sectors. Since aircraft contrails alone are responsible for about 35% of aviation emissions, Google and American Airlines are exploring how machine learning can be used to minimize contrail formation. The early results show that roughly one-sixth of aviation emissions worldwide could be avoided (more than all the current output from AI data centres in the US combined).Similarly, food waste (which accounts for 6% of global emissions) can be reduced by using AI to forecast demand, manage production levels, and optimise schedules across the supply chain. AI is already being used to reduce emissions from industrial processes (currently 30% of the global total), such as by aiding in the development of biologically inspired materials that are less reliant on fossil fuels (but still meet industries’ mechanical standards), and by reducing the cost and increasing the efficiency of material recycling. And AI will aid climate adaptation as well, by improving weather forecasting and early-warning systems. Timely preparation has the potential to save lives and reduce economic losses.Thus, while AI will most likely increase global energy consumption in the short term, its potential to drive down emissions across a wide range of industries is immense. We must remember that technological progress can decouple economic growth from emissions. The UK, for example, has boosted per capita GDP by almost 50% since 1990 while slashing domestic emissions by half. AI could be the key to accelerating this trend globally.Realising AI’s full potential as a tool for decarbonisation will, however, require stronger climate policies. Putting a price on carbon and doubling down on support for clean energy would create powerful incentives for businesses to invest in AI solutions that minimise emissions and hasten the transition to a sustainable future. If we play our cards right, AI may well prove to be our ace in the hole in the fight against climate change. — Project Syndicate