Climate hot topic at online event in Davos

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF), at the opening of the Davos Agenda 2022. World leaders met online to define the principles, policies and partnerships needed in this difficult context. (Salvatore Di Nolfi/Keystone via AP)

GENEVA (AP) — Government and business leaders attending the World Economic Forum’s virtual gathering called for cooperation on big issues like climate change and economic recovery. Speeches and discussions from the likes of Chinese President Xi Jinping and UN Secretary-General Antonio Guterres went online this week after COVID-19 concerns delayed the forum’s annual meeting in Davos, Swiss. Critics regularly fault the Davos event for hosting elites touting lofty but often empty goals deemed disconnected from ordinary people.

As usual, great ideas were debated, but no concrete agreement emerged.

German Chancellor Olaf Scholz has pledged to use his country’s Group of Seven presidency to get industrialized countries to lead a “paradigm shift in international climate policy”.

The new head of Europe’s biggest economy said the ‘climate club’ would agree on ‘common minimum standards’. Its targets are already part of the Paris climate accord, including limiting global warming to 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial levels.

Scholz said the club could seek to achieve these goals “by pricing carbon and preventing carbon leakage” – designed to prevent companies from moving carbon-intensive industries to countries with carbon rules. emissions are more flexible.

Others called for help for developing countries. Guterres called for debt relief to wean them off coal, and Latin American leaders said funding for green programs was essential. A panel with US climate envoy John Kerry and billionaire Bill Gates said innovations that have not yet been invented or widely used could help reduce emissions. This idea is popular in some circles but also divisive because technologies like carbon capture are expensive and energy-intensive.

The global economy

The main economic issues were rising consumer prices and likely interest rate hikes by the US Federal Reserve this year, which would have repercussions around the world due to the role played by the US dollar.

Many of the world’s poorest countries face debt problems as their economic recovery lags that of the developed world, International Monetary Fund Managing Director Kristalina Georgieva warned Friday at a roundtable. The Fed’s actions could strengthen the dollar, increasing local currency debt. US Treasury Secretary Janet Yellen said in a separate speech that the Biden administration’s pandemic relief and infrastructure plans had spurred economic growth. She highlighted the need for a global minimum corporate tax that more than 130 countries have supported at a time when tax burdens have shifted to middle-class workers.

European Central Bank President Christine Lagarde said the 19 countries using the euro were at a different stage of recovery than the United States and suggested that temporary factors such as high costs of energy could fuel inflation in Europe.

During the economics panel, she said the bank is “trying to figure out how long this will last” and will act to counter high inflation, including through interest rate hikes, once certain “criteria would be satisfied”.

The bank plans to end its efforts to stimulate the pandemic-hit economy in March. Compared to the United States, Europe lacks “excess demand” following major lockdowns that would drive up prices in the longer term, she said.

Jessica C. Bell