Tag: GDP

German Industry Giants Demand Urgent Reforms as High Energy Costs Put Companies Under Pressure

The German “Investitionsbooster” (investment booster) has so far delivered little measurable uplift, private investments remain well below pre-COVID levels (around 11–12%), and the broader economic recovery stays weak.

Germany’s labour productivity growth has slowed sharply to an average of just 0.3% per year over the past six years, a level the Stiftung Familienunternehmen (Foundation for Family Businesses) and the underlying IW Köln study describe as no longer sufficient to sustain prosperity amid demographic decline.

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The German “Investitionsbooster” (investment booster) has so far delivered little measurable uplift, private investments remain well below pre-COVID levels (around 11–12%), and the broader economic recovery stays weak.

These points align with reporting from mid-August 2026 (Handelsblatt, 13 Aug; related coverage including BILD drawing on the same sources) and earlier data/releases from DIHK, Destatis (Federal Statistical Office), and the ifo Institute.

The package (in force since mid-July 2025) centers on temporary accelerated/declining-balance depreciation (up to 30% in the first year, and again on residual value in years 2–3) for movable assets such as machinery and equipment through end-2027, plus later phased corporate-tax cuts. Chancellor Merz had framed it as making Germany “fit for the future.”

After roughly one year, economists (IW’s Tobias Hentze, IWH’s Oliver Holtemöller, Claus Michelsen and others cited in Handelsblatt/BILD coverage) describe the effects as limited or “überschaubar.”

Private equipment investment rose 3.3% in Q1 2026, but the Economics Ministry attributes much of this to stronger exports rather than the tax incentives.

Equipment investment levels early in 2026 were still roughly at 2013 levels.

High uncertainty (US trade tensions, Middle East conflict, energy prices, weak demand outlooks, high energy and regulatory costs) is widely seen as blunting the incentives—research suggests high-risk environments can roughly halve the impact of such measures. Public spending (infrastructure special funds, defense) is providing stronger short-term support than the tax measures.

DIHK surveys and Destatis data consistently show private investments (companies and households) in 2025 around 11% below the 2019 pre-COVID level.

Some summaries round this to ~12%.

Investment intentions remain negative: recent DIHK polls show only ~23% of firms planning higher budgets versus 31–34% planning cuts (balances around –8 to –11 points), with the weakness especially pronounced in industry.

When firms do invest, the dominant motives are replacement and rationalization rather than capacity expansion or innovation.

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Germany’s labour productivity growth has slowed sharply to an average of just 0.3% per year over the past six years, a level the Stiftung Familienunternehmen (Foundation for Family Businesses) and the underlying IW Köln study describe as no longer sufficient to sustain prosperity amid demographic decline.

This assessment comes from the Stiftung’s study “Fünf Hebel für mehr Produktivität” (Five Levers for More Productivity), prepared by the Institut der deutschen Wirtschaft (IW) Köln and released on 17 August 2026. It draws on Federal Statistical Office (Destatis) data and long-term trends.

The Productivity Slowdown

  • In the 1980s and 1990s, German labour productivity (economic output per employed person) typically grew by around 2% annually.
  • In the 2010s it averaged about 1%.
  • Over the most recent six years the figure has fallen to just 0.3% per year.

Michael Grömling (IW macroeconomics head) called productivity “the central engine of prosperity,” noting that this engine has been sputtering for years.

With fewer workers available due to demographic change, the study calculates that productivity growth would need to rise to roughly 1.6% annually, about five times the current rate, to offset the shrinking labour force and maintain living standards.

Contributing factors identified include:

  • Weak capital intensification (companies investing less additional capital per hour worked).
  • Limited efficiency gains from new technologies and innovation.
  • Insufficient private and public investment in machinery, infrastructure, and digitalisation.
  • High bureaucracy and other structural rigidities.
  • Labour hoarding amid skilled-worker shortages.

Short- term Destatis figures can look better (e.g., GDP per hour worked rose in parts of early/mid-2026 amid modest GDP growth of 0.3% in Q2), but these do not reverse the multi-year trend.

Potential-output estimates from the Federal Ministry of Finance also show very low total- factor- productivity contributions and overall potential growth near 0.3% for 2026.

The study outlines five measurable levers (ICT capital stock, AI adoption share, private R&D spending, bureaucracy index, and public capital stock). Scenario calculations suggest:

  • Stronger private R&D could deliver a long-term productivity gain of up to 13%.
  • Broad AI diffusion could add around 9% by 2034.
  • Bureaucracy reform offers the quickest payoff (up to 1.6% within a year).
  • Combined effects could raise economic output by up to €21,000 per three-person household over time (the individual levers are not simply additive).

The Stiftung argues that Germany needs a clear growth path rather than merely managing scarcity, and that the current trajectory risks eroding prosperity.

While recent GDP and ifo business-climate data show some stabilisation, improved sentiment), the structural productivity problem remains the binding constraint on longer-term prosperity.

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German business associations and major corporations have urged the federal government to implement promised reforms urgently and without dilution.

In a joint letter reported on 21 August 2026, addressed to Chancellor Friedrich Merz, Labor Minister Bärbel Bas, Economy Minister Katherina Reiche, and coalition parliamentary leaders, signatories from Bavaria and Baden-Württemberg stated that high energy costs and changing economic conditions are placing companies under “erheblichem Druck” (considerable pressure).

They emphasized that the concrete design of social and economic policy frameworks will determine whether firms can remain competitive, retain jobs, and continue investing in Germany.

The letter calls for announced reforms and those contained in the coalition agreement to be enacted “schleunigst und ohne irgendwelche Abstriche” (as quickly as possible and without any cuts or compromises).

Prominent corporate signatories include Audi, BMW, Mercedes-Benz, Porsche, Siemens, ZF, and Eberspächer. They are joined by the leadership of the Bavarian metal and electrical employers’ association and Südwestmetall (Baden-Württemberg).

A central concrete demand is the sustainable reduction of the social- insurance contribution burden.

This currently exceeds 42 percent, described as a historic high. The signatories criticize the fact that the effective burden on parts of business and insured persons continues to rise even when contribution rates remain stable, because contribution assessment ceilings (Beitragsbemessungsgrenzen) are being raised.

They call this “inakzeptabel.”

Broader reform themes referenced in related coverage and parallel association statements include lower energy costs, reduced bureaucracy, greater flexibility in working hours, and measures to improve overall competitiveness and investment conditions.

This appeal comes amid ongoing structural challenges for German industry: persistently high energy prices, elevated non- wage labor costs, weak private investment, and subdued productivity growth.

Surveys from bodies such as the DIHK have repeatedly highlighted energy costs as a major location risk, with many firms delaying investments or considering relocation.

Government responses have acknowledged the need for timely decisions on major projects covering energy costs, working times, and related issues, while noting that structural reforms take time to deliver results.

The letter reflects growing impatience in industry that announcements must now translate into concrete legislation, particularly ahead of and during cabinet discussions on economic matters.

This fits the wider pattern of German economic pressures discussed earlier, limited impact so far from the investment booster, productivity growth stuck near 0.3 percent, and demographic headwinds reducing the labor force, where business groups argue that cost reductions and faster structural reforms are essential to safeguard the industrial base.

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German energy policy in 2026 remains defined by the long-running Energiewende (energy transition), but with a clear shift under Chancellor Friedrich Merz’s CDU/CSU- SPD coalition toward cost control, industrial competitiveness, and pragmatism while formally retaining climate targets.

Core Goals

  • Climate neutrality by 2045.
  • 80% renewable share in electricity consumption by 2030.
  • Coal phase-out by 2038 at the latest (lignite targeted earlier in some scenarios, though under review).
  • Nuclear power fully phased out since 2023 (no reactivation planned).

Renewables (mainly wind and solar) frequently account for 55–63% in 2025– mid and 2026 periods, with coal and gas still providing backup. Germany has had zero domestic nuclear generation since the final reactors shut down in 2023.

However, the electricity that is actually consumed in different parts of the country includes significant cross-border flows:

  • Southwestern Germany, including Saarland, is electrically well-connected to France. Germany regularly imports electricity from France, and a large share of French generation is nuclear. Official data and analyses show nuclear power making up a notable portion of Germany’s total electricity imports (often the single largest non-renewable source in the import mix). In some years/periods, France has been one of Germany’s top import partners, and cross-border redispatch measures have explicitly drawn on French nuclear capacity for grid stability.
  • Eastern German states have stronger interconnections with Poland. Poland’s power mix remains heavily coal-based (both hard coal and lignite). While the direction of flows varies (Germany has often been a net exporter to Poland in recent periods), imports from Poland do occur and carry a higher fossil/coal share than the German domestic average.

These imports mean that the physical electricity mix experienced in Saarland can include French nuclear power, and parts of eastern Germany can include Polish coal-generated electricity, even though neither nuclear nor (in the same volumes) that specific Polish coal is produced on German soil.

Domestic generation statistics look cleaner and more renewable- heavy than the full picture of what is consumed in specific regions once imports are included.

Germany has become more dependent on neighbouring countries’ generation mixes since the nuclear phase-out, which is exactly the nuance you highlighted.

High energy costs still elevated compared to many international competitors remain a core complaint of industry (as seen in the recent joint letter from major corporations and associations).

Wholesale prices have been volatile, recently pushed higher by Middle East tensions affecting oil and gas.

Grid bottlenecks from rapid solar growth force curtailments, and the overall system costs of the transition are substantial. Progress on heat pumps and electric vehicles has lagged, keeping oil and gas dominant in heating and transport.

Germany continues expanding renewables and remains committed to long-term climate goals, but the emphasis has shifted toward making the transition more affordable and industry- friendly.

Success depends on faster grid expansion, successful gas capacity auctions as a bridge, effective use of industrial relief to drive decarbonization and managing the fiscal burden of support schemes.

Critics argue some measures risk slowing the transition or locking in fossil infrastructure; supporters say they are essential to prevent deindustrialization.

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The European Green Deal, launched in 2019, remains the EU’s flagship strategy to achieve climate neutrality by 2050 and cut greenhouse gas emissions by at least 55% by 2030 (compared with 1990 levels).

The Green Deal has raised costs for energy- intensive industries through higher carbon prices (ETS), renewable support levies, and grid investment needs.

European industrial electricity prices remain roughly twice those in the US or China, contributing to competitiveness challenges, investment hesitancy, and selective deindustrialisation risks in steel, chemicals, and metals, issues frequently raised by German industry.

CBAM (Carbon Border Adjustment Mechanism), fully operational in 2026, protects against carbon leakage by pricing the embedded emissions of imports (initially cement, steel, aluminium, fertilisers, electricity, hydrogen).

It raises costs for high- carbon exporters (including China) while creating incentives for greener global production.

Europe’s “Soaring Climate Damage” Narrative Runs Into an Inconvenient Dataset

One of the most persistent claims in climate politics is that weather disasters are becoming increasingly expensive because climate change is making extreme weather worse. The assertion has been repeated so often by politicians and echoed so faithfully by much of the media that it has taken on the appearance of established fact. Recently, Dr. Roger Pielke Jr. wrote up a revealing post on substack titled: Europe’s Weather Losses Keep Climbing – But a new loss normalization finds no trend after accounting for economic growth.

From Watts Up With That?

From Anthony Watts

One of the most persistent claims in climate politics is that weather disasters are becoming increasingly expensive because climate change is making extreme weather worse. The assertion has been repeated so often by politicians and echoed so faithfully by much of the media that it has taken on the appearance of established fact. Recently, Dr. Roger Pielke Jr. wrote up a revealing post on substack titled: Europe’s Weather Losses Keep Climbing – But a new loss normalization finds no trend after accounting for economic growth.

Some excerpts and analysis follow.

European Climate Commissioner Wopke Hoekstra recently declared, “The reality is that as climate change continues, the pattern of more heat waves, more droughts, more heavy weather, and of course also more floods is going up… you will see more damage… the ever-larger economic damage that climate change… is bringing to our societies.”

It certainly sounds convincing. Unfortunately for that narrative, Roger Pielke Jr. has once again done what too few economists bother to do: examine the data before accepting the conclusion. Pielke’s latest analysis, based on newly updated catastrophe loss data from the European Environment Agency (EEA), finds that once economic growth is properly accounted for, Europe’s weather-related disaster losses have remained essentially flat since 1990.

At first glance, the raw numbers appear to support the alarmist storyline. Inflation-adjusted disaster losses have increased substantially over the past three decades, and the chart certainly gives the impression that weather is becoming dramatically more expensive. That is precisely the statistic routinely cited in speeches, reports, and headlines.

The problem is that the comparison is fundamentally misleading, if not flat out false.

Europe today bears little resemblance to Europe in 1990. The continent has accumulated vastly more wealth. Cities have expanded. Infrastructure has multiplied. Homes have become larger and more valuable. Businesses own more equipment, governments own more infrastructure, and insurers cover far more expensive property than they did thirty-five years ago. In simple terms, there is much more to damage today than there was a generation ago.

If the exact same flood or windstorm struck Europe in 2024 as occurred in 1990, common sense tells us the economic losses would almost certainly be higher simply because society has accumulated far more assets in harm’s way. Rising monetary losses, by themselves, therefore tell us very little about whether the weather itself has become more destructive.

This is precisely why disaster researchers normalize loss data.

Pielke adjusts reported losses to account for the growth of Europe’s economy by expressing disaster costs relative to GDP. The methodology is straightforward: reported losses are scaled by the ratio of 2024 GDP to the GDP of the year in which the event occurred. In effect, the calculation asks a simple question: what would that historical disaster cost if it happened in today’s economy?

Far from being an unconventional approach, measuring disaster losses relative to GDP has become standard practice in disaster economics. The United Nations Sendai Framework for Disaster Risk Reduction even uses losses as a percentage of GDP as one of its official indicators.

Once this adjustment is made, the dramatic upward trend mostly disappears.

The updated EEA data covering 1990 through 2024 show year-to-year variability, as one would expect from weather, but essentially no long-term increase in normalized losses. Pielke summarizes the finding succinctly: “Once you account for economic growth, the normalized cost of weather and climate extremes in Europe has not increased over 1990–2024. The overall trend is flat.”

That conclusion is particularly noteworthy because the updated dataset includes the catastrophic floods that struck Germany and Belgium in 2021, events that generated some of the largest insured and uninsured losses in recent European history. Yet even after including those disasters, the long-term normalized trend remains essentially unchanged. In fact, once exposure is held constant, years such as 1990, 1999, and 2002 emerge as equally, or even more economically significant than some of the recent headline events.

Recognizing that critics might question using aggregate European GDP, Pielke also performed a robustness check by normalizing each country’s losses against its own GDP before combining the results. The outcome differed by only about 1.5 percent from the aggregate calculation. In other words, the conclusion proved remarkably insensitive to the methodology employed.

This distinction between hazard and exposure has been understood within disaster research for decades. Economic losses are determined not only by the severity of the weather event itself, but also by how many people, buildings, roads, factories, and other assets lie in its path. As societies become wealthier, losses naturally increase even if the physical hazard remains unchanged. Ignoring that reality inevitably produces misleading conclusions.

Ironically, this has long been recognized by the IPCC itself. Previous assessment reports have repeatedly concluded that observed increases in disaster losses are dominated by increases in exposure and wealth, with little evidence that the monetary trends themselves demonstrate worsening weather. Yet that important caveat frequently disappears somewhere between the technical report and the press release.

The result is a steady stream of headlines pointing to ever-rising billion-dollar disasters as proof of a “climate crisis” while failing to mention that today’s world simply contains far more billion-dollar assets than it once did. Comparing raw disaster losses across decades without accounting for economic growth is no more meaningful than comparing housing prices across generations without adjusting for inflation.

None of this demonstrates that climate has no influence on weather extremes, nor does it suggest future trends cannot change. It does, however, show that one of the most commonly cited indicators of an escalating climate crisis, the apparent explosion in economic disaster losses, largely disappears once exposure is properly accounted for.

That is precisely why normalization exists. It separates changes in the weather from changes in society.

In the current political climate, however, raw numbers often generate better headlines than normalized ones. Unfortunately, science isn’t supposed to be driven by headlines. It is supposed to be driven by evidence, and the latest evidence from the European Environment Agency suggests that Europe’s weather disaster losses tell a much more nuanced story than the one being repeated by policymakers.

Is China’s Economy Growing Or Shrinking?

China’s economy is growing, not shrinking, based on official data and most independent assessments as of early 2026. However, the pace of growth has slowed compared to pre-pandemic levels, with significant structural challenges and debates over the quality and sustainability of that expansion.

China’s economy is growing, not shrinking, based on official data and most independent assessments as of early 2026.

However, the pace of growth has slowed compared to pre-pandemic levels, with significant structural challenges and debates over the quality and sustainability of that expansion.

China’s National Bureau of Statistics reported that real GDP grew by 5.0% in 2025, reaching approximately 140.19 trillion yuan (about $19.6 trillion USD).

This met the government’s target and marked a continuation of positive annual growth. Quarterly trends showed some deceleration: 5.4% year-on-year in Q1, easing to 4.5% in Q4, with quarter-on-quarter growth at +1.2% in Q4.

Industrial production (value added of industrial enterprises above designated size) rose 6.3% year-on-year.

Retail sales of consumer goods increased 2.8% year-on-year (accelerating from late 2025).

Services production grew around 5.2%.

Manufacturing PMI returned to expansion territory in March 2026 (official reading 50.4, above the 50-threshold separating growth from contraction), after some weakness earlier in the year linked to seasonal factors and domestic demand softness.

China set its official GDP growth target for 2026 at 4.5%–5% — the lowest in decades — reflecting caution amid headwinds. This is down slightly from recent ~5% targets.

International forecasts generally align with moderate positive growth: IMF around 4.2–4.5%, OECD ~4.4%, Goldman Sachs ~4.8%, with consensus hovering near 4.5%. Q1 2026 growth is expected in the 4.5–5.5% range by many analysts, potentially accelerating slightly from late 2025 due to policy support and export resilience.

Some skeptics (e.g., Rhodium Group) argue official figures overstate reality, estimating 2025 growth closer to 2.5–3% due to weak investment and discrepancies in areas like fixed asset investment. They see risks of even slower “actual” expansion in 2026 without stronger domestic demand reforms.

In nominal terms or certain metrics (e.g., China’s share of global GDP in USD), relative size may have peaked or declined slightly due to exchange rates and global dynamics, but absolute real output continues to expand.

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Is China’s Economy Growing Or Shrinking?

From The Manhattan Contrarian

By Francis Menton

Back in May 2024, I had a post titled “So How Are Things Going In China?” The post was inspired by a New York Times article of April 15 of that year that had reported that China’s economy had grown “more than expected” in the first three months of 2024; and by a just-issued IMF prediction that China’s economy would grow by 5% in 2024. To believe the New York Times and the IMF, in 2024 the Chinese economy was growing at an annual rate of 5% or more. For 2025, China again reported a GDP growth rate of about 5%.

Meanwhile, the reported rates for U.S. GDP growth were 2.8% for 2024 and 2.1% for 2025. It looks like China is beating the pants off us. Surely, it can only be a few more years before China’s economy overtakes ours as the largest in the world.

Well, maybe things aren’t quite that simple. On March 19 the Wall Street Journal had two pieces giving a very different perspective, one in the news pages by Jon Emont, and the other on the editorial page by Joseph Sternberg. Emont’s piece has the headline “Beijing’s Big Problem: An Incredible Shrinking Economy.”

How could China’s economy be “shrinking” when it consistently reports annual GDP growth of 5% or more? Emont:

[B]y one important measure, China’s global heft is shrinking. In dollar terms, China’s gross domestic product, as a share of the global economy, peaked in 2021 at around 18.5%, when it grew to be around three quarters of the size of the U.S. economy. Many economists predicted China’s explosive growth would eventually make its economy bigger than that of the U.S.  Instead China’s share of the pie has decreased, ending 2025 at around 16.5% of the global economy. It is now less than two-thirds the size of the U.S. economy, according to International Monetary Fund data.

It all depends on how you measure GDP. If your measure is volume of production in local currency, China’s economy might be growing strongly. But if your measure is the value of Chinese production in the international marketplace, its economy is shrinking.

An indication of how the difference arises can be found elsewhere in Emont’s piece:

[China] is the global leader in strategically important industries such as electric vehicles, solar panels, shipbuilding and humanoid robots.

Electric vehicles? Solar panels? Emont may call these industries “strategically important,” but what they really are is industries that until recently were heavily subsidized in the West, but now many of those subsidies have been withdrawn. As subsidies were withdrawn during 2025, Western manufacturers have rapidly withdrawn from these industries, and taken write-offs of their investments. On EVs alone, in 2025 GM took write-offs in the range of $7 billion; Ford took write-offs of $19.5 billion; and in early 2026 Stellantis took an EV write-off of over $26 billion. All three also significantly cut back production of the EVs.

But in China, that’s not how it works. They continue to produce EVs by the zillions. CNBC reported in September 2025 that the biggest Chinese EV manufacturer, BYD, had cut prices by as much as 30%. With the much lower prices, its deliveries of new vehicles still declined by a small amount.

And then there’s the issue that China’s production statistics may well be substantially inflated. From Sternberg’s piece:

It’s widely understood that the government economic data concerning GDP growth are a lie intended to flatter the party.

Sternberg also highlights other issues in China’s government-directed economy. For example, China has long made easy and cheap credit available to favored and mostly state-owned industries.

[T]he rapid expansion of [credit] for decades has been Beijing’s primary means of achieving economic growth. Despite robust new bank lending of around $680 billion, the total rate of credit growth is slowing dramatically: to 6.1% year-on-year in January, compared with an average of 9% a year in 2017-24 and 18.1% in 2007-16. . . . [T]he efficiency of credit at generating economic growth may be declining even as the pace of credit creation slows. Some 58% of loans in December were made at interest rates at or below the official benchmark lending rate of 3%. . . . [B]anks are struggling to find borrowers (read: in the private sector) that could generate returns above 3%, which is remarkable in a developing economy with enormous potential for catch-up growth if nothing else. Instead banks are lending to inefficient state-owned enterprises and investment pools linked to local governments.

They plow forward providing more and more subsidized credit to produce more and more stuff of less and less value.

Is China’s economy growing or shrinking? It could be either one, depending on what method of measuring you select. But my view is that, by the measures that count, shrinking is the right answer.

Even Canada is Walking Back Environmental Funding

Arctic scientists could have acted to save their own jobs, but it’s too late now.

From Watts Up With That?

Essay by Eric Worrall

Arctic scientists could have acted to save their own jobs, but it’s too late now.

Budget cuts at Environment and Climate Change Canada threaten Arctic science

Published: March 9, 2026 12.08am AEDT
Roxana Suehring Assistant Professor in Environmental Analytical Chemistry, Toronto Metropolitan University
Patricia HaniaAssistant Professor, Law & Business Department, Toronto Metropolitan University

The Arctic has been in the news a lot lately. Between the increased geopolitical interest in Greenland, claims over sovereignty, resource exploitation and the devastating impacts of climate change, the region has become a sentinel for global change. 

But away from these headlines, a quieter crisis is unfolding that threatens Canada’s role in global environmental science, law and policy: the dismantling of research teams at the department responsible for Canada’s environmental policies and programs. The federal government’s plan to reduce the public service by 15 per cent over three years means that more than 800 positions at Environment and Climate Change Canada (ECCC) will be cut.

…

Many of the scientists who lead projects on the long-term trends of toxins in Arctic wildlife face cuts or might lose their jobs entirely. Scientists at ECCC are often the ones to identify and assess “chemicals of emerging Arctic concern” — newly discovered chemical threats to human and environmental health that scientists are only just beginning to understand.

…

Losing these samples and monitoring programs would set back Canadian and global contaminant research and reinforce criticisms that Canada is a laggard in environmental law and policy.

…Read more: https://theconversation.com/budget-cuts-at-environment-and-climate-change-canada-threaten-arctic-science-276606

Why is Canada doing this? One possible explanation is Canada is struggling to fund government programmes, due to economic problems.

FEBRUARY 27, 2026

Understanding the magnitude of Canada’s economic decline

By: Jason Clemens and Milagros Palacios

The anxiety and growing animus towards the Trump administration by many Canadians is clouding the enormity of the home-grown problems facing our country. These economic challenges existed well before President Trump took office for the second time but the uncertainty over access to the U.S. market and Trump’s almost daily threats of more tariffs have heightened the problems. Unfortunately, there’s increasing evidence that like its predecessor, the Carney government is more about optics than action and results.

…

The Trudeau government ushered in a new era of dramatically different policies from previous Conservative and Liberal governments going back to the mid-1990s, including significantly higher levels of government spending financed by borrowing, along with higher taxes and more regulation of the economy.

The results have been a near-unprecedented decline in the comparative economic well-being of Canadians. As of 2024, our per-person GDP (a broad measure of living standards) stood at US$51,649, a mere 3.2 per cent higher than in 2014.

Contrast that with the U.S., which had per-person GDP of $72,350, which is 20.2 per cent higher than it was in 2014, and is now 40.1 per cent higher than in Canada. In other words, Americans enjoyed growth in their living standards at almost six times the rate we have over the last decade (or so), and now have living standards 40 per cent higher than us.

And the future is not encouraging. The OECD projects that the gap between us and our American neighbours will continue to grow, reaching almost 60 per cent by 2060 if nothing materially changes.

…Read more: https://www.fraserinstitute.org/commentary/understanding-magnitude-canadas-economic-decline

How much of this economic underperformance is because of Canadian climate policy?

NOVEMBER 18, 2025 | APPEARED IN THE WESTERN STANDARD

Carney fails to undo Trudeau’s damaging energy policies

By: Tegan Hill and Elmira Aliakbari

On the campaign trail and after he became prime minister, Mark Carney has repeatedly promised to make Canada an “energy superpower.” But, as evidenced by its first budget, the Carney government has simply reaffirmed the failed plans of the past decade and embraced the damaging energy policies of the Trudeau government.

First, consider the Trudeau government’s policy legacy. There’s Bill C-69 (the “no pipelines act”), the new electricity regulations (which aim to phase out natural gas as a power source starting this year), Bill C-48 (which bans large oil tankers off British Columbia’s northern coast and limit Canadian exports to international markets), the cap on emissions only from the oil and gas sector (even though greenhouse gas emissions have the same effect on the environment regardless of the source), stricter regulations for methane emissions (again, impacting the oil and gas sector), and numerous “net-zero” policies.

According to a recent analysis, fully implementing these measures under Trudeau government’s emissions reduction plan would result in 164,000 job losses and shrink Canada’s economic output by 6.2 per cent by the end of the decade compared to a scenario where we don’t have these policies in effect. For Canadian workers, this will mean losing $6,700 (annually, on average) by 2030.

Unfortunately, the Carney government’s budget offers no retreat from these damaging policies. While Carney scrapped the consumer carbon tax, he plans to “strengthen” the carbon tax on industrial emitters and the cost will be passed along to everyday Canadians—so the carbon tax will still cost you, it just won’t be visible.

…Read more: https://www.fraserinstitute.org/commentary/carney-fails-undo-trudeaus-damaging-energy-policies

It’s not just squandering cash on the fake climate crisis, though that has certainly contributed. Instead of exploiting resources, keeping government spending under control, and delivering the prosperity Canada’s rich mineral endowment should have made possible, Canadian governments have squandered opportunities, chased pseudoscientific hobgoblins, and picked fights with Canada’s major trading partner, when they should have been signing new trade agreements.

And Canadian politicians are still making the same mistakes, over and over. Canadian politicians are still picking fights, playing politics instead of facilitating economic growth – Canada jointly announced a new anti-US alliance with Australia just a few days ago.

It’s difficult to quantify how much of a difference it might have made if these Arctic environmental scientists who are losing their jobs called out the false alarmist claims of their global warming colleagues. Maybe they were quite reasonably afraid of losing their jobs. But now they’re going to lose their jobs anyway, so at best their silence won a few years delay, at the price of allowing the fake climate warnings of alarmist colleagues to contribute to the wrecking of the Canadian economy which funded their work.

If 1°C Destroys 20% of GDP, Why Did Nobody Notice?

A new working paper from the National Bureau of Economic Research makes a rather astonishing claim. According to Adrien Bilal and Diego Känzig in “The Macroeconomic Impact of Climate Change: Global vs. Local Temperature,”:

“1°C warming reduces world GDP by over 20% in the long run.”

From Watts Up With That?

By Charles Rotter

Charles Rotter

If 1°C Destroys 20% of GDP, Why Did Nobody Notice?

A new working paper from the National Bureau of Economic Research makes a rather astonishing claim. According to Adrien Bilal and Diego Känzig in “The Macroeconomic Impact of Climate Change: Global vs. Local Temperature,”:

“1°C warming reduces world GDP by over 20% in the long run.”

That is not a marginal adjustment to the literature. It is a tenfold escalation.

The authors go further:

“Climate change of 2°C by 2100 leads to a present-value welfare loss of more than 30% and a Social Cost of Carbon (SCC) in excess of $1,200 per ton.”

If these numbers are even approximately correct, the implications are staggering. Carbon pricing would not merely be prudent. It would be radically underpriced. Climate change would not be a gradual background risk; it would already rank among the largest macroeconomic shocks in modern history.

And yet a simple question arises.

If 1°C of warming destroys 20% of global GDP, why did nobody notice?

The Hidden Great Depression

Since roughly 1960, global average temperature has risen about 1°C. Over the same period:

  • World GDP per capita has risen roughly three- to four-fold.
  • Global poverty rates have collapsed.
  • Agricultural yields have increased dramatically.
  • Life expectancy has surged.
  • Extreme weather mortality has fallen sharply.

According to the paper’s own counterfactual exercise:

“World GDP per capita would be more than 20% higher today had no warming occurred between 1960 and 2019.”

In other words, we are living through the equivalent of a permanent Great Depression relative to a hypothetical non-warming baseline — we just failed to detect it.

This is an extraordinary claim. And extraordinary claims demand extraordinary evidence.

The Methodological Pivot: Global vs. Local Temperature

For decades, most empirical climate-economy research has relied on local temperature variation across countries. Those studies typically find that a permanent 1°C increase reduces GDP by about 1–3%.

Bilal and Känzig argue that this approach understates damages because panel regressions with time fixed effects remove global effects. They instead exploit time-series variation in global mean temperature, constructing “global temperature shocks” and tracing their impact on world GDP .

Using this approach, they estimate that a 1°C shock leads to a 14–18% decline in GDP within six years . They then scale these responses to infer that a permanent 1°C rise reduces long-run GDP by roughly 20–34% .

But here is the quiet detail doing enormous work:

The actual shocks observed in the data are on the order of 0.1–0.2°C .

The authors extrapolate from these small, transitory fluctuations to a permanent 1°C structural shift — five to ten times larger than anything directly observed.

That scaling requires strong linearity assumptions and assumes that short-run natural variability is a valid proxy for long-run anthropogenic warming. That is not a trivial assumption.

The Identification Problem No One Can Escape

Global temperature is a single, highly persistent time series.

So is global GDP.

Even after filtering and controlling for oil prices, recessions, and interest rates, the identifying variation remains one-dimensional and global.

There is only one planet.

Panel studies using local variation at least benefit from cross-country differences. A global time series does not. Any unobserved global shock correlated with temperature fluctuations can contaminate the estimates.

Robustness checks cannot fully resolve that structural limitation.

The Missing Side of the Ledger: Benefits of Mild Warming

Perhaps the most striking omission in the paper’s narrative is the asymmetric treatment of potential benefits from modest warming and rising CO₂ concentrations.

The authors argue that global temperature shocks strongly predict extreme events . That may be so. But the paper largely treats warming as a one-directional negative productivity shock.

The historical record is more complex.

1. Agricultural Productivity

The Green Revolution dramatically boosted crop yields beginning in the 1960s. But yield gains did not occur in a vacuum. CO2 is not a pollutant to plants. It is a fundamental input.

Numerous agronomic experiments have shown that elevated CO2 concentrations:

  • Increase photosynthetic rates
  • Improve water-use efficiency
  • Raise crop yields under many conditions

At moderate temperature increases — particularly in colder regions — growing seasons lengthen, frost days decline, and marginal land becomes cultivable.

Global cereal yields have increased more than threefold since 1960. That does not prove warming caused it, but it does complicate the narrative that warming is a dominant macroeconomic drag.

2. Global Greening

Satellite observations over the past several decades show a measurable increase in global leaf area index — often referred to as “global greening.” A substantial fraction of this increase is attributed to CO2 fertilization.

More vegetation implies:

  • Greater biomass
  • Enhanced carbon uptake
  • Expanded agricultural potential in some regions

Again, this does not negate climate risks. But if a 1°C warming were destroying 20% of global GDP, one might expect to observe broad productivity deterioration, not simultaneous global greening and rising agricultural output.

A World That Doesn’t Look Like a Collapsing Economy

The paper’s structural model projects dramatic capital destruction and productivity collapse. Under a 3°C scenario, GDP per capita falls more than 50% by 2100 .

Yet the historical 1°C warming so far coincided with:

  • Rising total factor productivity
  • Massive capital accumulation
  • Rapid technological diffusion
  • Urbanization and industrialization

For the 20% figure to hold, global growth absent warming would have needed to be even more explosive than the already unprecedented growth actually observed.

That is possible in theory. But it implies that climate change has already suppressed a vast, unseen economic boom.

That suppression is not evident in macroeconomic data outside the model.

The Compounding Multiplier Effect

The large Social Cost of Carbon — over $1,200 per ton — is not independent evidence. It is the arithmetic consequence of assuming very large productivity losses.

If you assume:

  • 20–30% GDP loss per 1°C
  • Persistent productivity decay
  • Capital destruction amplification

Then a massive SCC follows automatically.

The policy conclusion depends entirely on the initial damage estimate.

What Would We Expect to See?

If warming of 1°C truly reduces GDP by 20%, one would expect:

  • Visible stagnation in global output growth
  • Clear productivity deterioration in temperature-sensitive sectors
  • Widespread agricultural decline
  • Reduced capital formation
  • Reversal in living standards

Instead, the post-1960 world experienced the largest sustained rise in human prosperity in history.

This does not prove warming is beneficial. It does suggest that claims of massive hidden losses should face an unusually high evidentiary bar.

The Core Question Remains

The paper is sophisticated. It is technically ambitious. It presents numerous robustness checks.

But at its core lies a striking empirical tension:

A 1°C warming since 1960 allegedly reduced world GDP by roughly 20%.

Yet the observable world economy looks nothing like one operating 20% below potential due to climate deterioration.

Skepticism in its proper sense is not reflex dismissal. It is disciplined suspension of judgment pending adequate evidence.

When a new study multiplies climate damages by ten relative to established research, that is not a small revision. It is a paradigm shift.

If 1°C destroys 20% of GDP, the world should look poorer than it does — not greener, more productive, and dramatically wealthier.

Before rewriting climate policy around a tenfold escalation in estimated damages, we should ensure the model explains not only filtered impulse responses — but the actual economic history of the last half-century.

Because if a Great Depression has already occurred without anyone noticing, the burden of proof rests squarely with those claiming it.

Should Guardian Authors be Paid in Hugs to Reduce Climate Damage?

If money and growth cause emissions (through spending, production, travel, etc.), then paying writers in non- monetary hugs would eliminate that “cascade of greenhouse gas emissions” from cash circulation. Promotions could mean extra daily hugs instead of raises; senior staff could retire rich in affection while their salaries stay locked away. It’s clearly tongue- in- cheek ridicule, implying anti- growth advocates should practice what they preach and of course, no serious publication (Guardian or otherwise) would adopt it.

A cartoon depicting diverse characters promoting climate action, with a sign reading 'Guardian Authors paid in hugs' and stacks of money symbolizing 'affection wealth'. Characters are gathered around a planet with a thermometer and a speech bubble saying 'Hug me for climate action!'

If money and growth cause emissions (through spending, production, travel, etc.), then paying writers in non- monetary hugs would eliminate that “cascade of greenhouse gas emissions” from cash circulation.

Promotions could mean extra daily hugs instead of raises; senior staff could retire rich in affection while their salaries stay locked away. It’s clearly tongue- in- cheek ridicule, implying anti- growth advocates should practice what they preach and of course, no serious publication (Guardian or otherwise) would adopt it.

_________________________________________________________________________________________________________

From Watts Up With That?

Essay by Eric Worrall

Graph showing projections for resources, food per capita, industrial output, population, and pollution over time, highlighting a predicted decline by 2020 according to the Club of Rome's 'Limits to Growth'.

Guardian author Alex Clark wants the world to “move beyond” GDP as a measure of wellbeing. The experiment should start with The Guardian.

Economic growth is still heating the planet. Is there any way out?

Rising GDP continues to mean more carbon emissions and wider damage to the planet. Can the two be decoupled?

Alex Clark
Mon 9 Feb 2026 19.00 AEDT

During Cop30 negotiations in Brazil last year, delegates heard a familiar argument: rising emissions are unavoidable for countries pursuing growth.

That pattern seems to be holding. In 2024, global GDP per capita reached a new high as did annual carbon emissions. But as climate targets slip and warnings mount that tipping points may already have been crossed, faith in growth for growth’s sake is starting to fracture.

This week, the UN secretary general, António Guterres, called for economies to “move beyond GDP” as a measure of progress, warning that the world’s “existing accounting systems” were driving the planet towards disaster.

The standard run of the Limits to Growth model predicted a tipping point beginning in the 2020s.

Now we are in the 2020s and it is unclear if we are facing the scenario Limits to Growth described.

Why we have avoided this – and whether we ultimately will – are key questions in post-growth economics.

…Read more: https://www.theguardian.com/environment/ng-interactive/2026/feb/09/economic-growth-carbon-emissions-impact-global-heating

The Limits to Growth. Wow.

The fact we are still happy and prosperous in the 2020s, a deadline which Limits to Growth implicitly sets as a tipping point, should be a hint that Limits to Growth calculations were a pile of junk (see the graph at the top of this article).

But let’s be fair and give the authors a chance to speak. What did Limits say about the timing of events in their graph?

The exact timing of these events is not meaningful, given the great aggregation and many uncertainties in the model. It is significant, however, that growth is stopped well before the year 2100. 

We have tried in every doubtful case to make the most optimistic estimate of unknown quantities, and we have also ignored discontinuous events such as wars or epidemics, which might act to bring an end to growth even sooner than our model would indicate. In other words, the model is biased to allow growth to continue longer than it probably can continue in the real world. 

We can thus say with some confidence that, under the assumption of no major change in the present system, population and industrial growth will certainly stop within the next century, at the latest.

Read more: Page 126, https://www.clubofrome.org/publication/the-limits-to-growth/

So, they’re not taking responsibility if they are wrong about the “exact timing”, but they think their graph is optimistic.

One of my favourite responses to The Limits to Growth was published by The New York Times in 1972, shortly after the publication of Limits. NYT points out inevitable doom was baked into the Limits to Growth calculations, by attaching exponential growth in needs and consequences to an arbitrary estimate of limits – completely ignoring that we’ve never encountered a limit we cannot overcome.

… “The Limits to Growth,” in our view, is an empty and misleading work. Its imposing apparatus of computer technology and systems jargon conceals a kind of intellectual Rube Goldberg device—one which takes arbitrary assumptions, shakes them up and comes out with arbitrary conclusions that have the ring of science. “Limits” pretends to a degree of certainty so exaggerated as to obscure the few modest (and unoriginal) insights that it genuinely contains. Less than pseudoscience and little more than polemical fiction, “The Limits to Growth” is best summarized not as a rediscovery of the laws of nature but as a rediscovery of the oldest maxim of computer science: Garbage In, Garbage Out.

As a first approximation of the future, the authors assume that the world is utterly incapable of adjusting to problems of scarcity. Technology stagnates and pollution is ignored, even as it chokes millions to death. A shortage of raw materials prevents industry and agriculture from keeping up with population growth. World reserves of vital materials (silver, tungsten, mercury, etc.) are exhausted within 40 years. Around 2020 the pinch becomes tight enough to cause a fall in per capita income. A few decades later, malnutrition and lagging health services abruptly reverse the climbing population trend. By the year 2100 the resource base has shrunk so badly that the world economy is unable to sustain even 19th‐century living standards.

It is no coincidence that all the simulations based on the Meadows world model invariably end in collapse. As in any simulation, the results depend on the information initially fed to the computer. And the “Limits” team fixes the wheel; no matter how ‘many times you play there is only one possible outcome. Critical to their model is the notion that growth produces stresses (pollution, resource demands, food requirements) which multiply geometrically. Like compound interest on a savings account, these stresses accumulate at a pace that constantly accelerates: Every child born is not only another mouth to feed but another potential parent. Every new factory not only drains away exhaustible resources but increases our capacity to build more factories. Geometric (or as mathematicians prefer to call it, exponential) growth must eventually produce spectacular results. If the Indians who sold Manhattan 300 years ago for $24 could have left their money untouched in a bank paying 7 per cent (a number chosen no more arbitrarily than many in “Limits”) they would have more than $25‐ billion today.

…Read more: https://www.nytimes.com/1972/04/02/archives/the-limits-to-growth-a-report-for-the-club-of-romes-project-on-the.html

As for post growth economics, why not lead by example? The Guardian could make a start right in the offices of The Guardian.

Borrowing from one of my favourite authors PJ O’Rourke‘s writing on post growth economics, let’s replace Guardian salary income with hugs.

If every Guardian reporter were to voluntarily take a £100 / week pay cut and instead receive a hug every day from the senior manager of their choice, that would be a powerful statement of commitment to disavowing money and economic growth as the sole measure of human wellbeing.

After all, a hug is a way of improving your happiness which doesn’t involve damaging economic activity. Receiving a hug instead of money eliminates an entire cascade of greenhouse gas emissions which spending that £100 and circulating that £100 through the economy could have caused.

For the truly climate ambitious Guardian staff, when they receive a promotion, they could demand two hugs per day instead of an increase in salary.

As for senior management, look how many hugs they would receive under this system. This would be an opportunity for senior management to equalise the monetary component of their salaries with their workers, while receiving lots of human kindness and hugs in place of all the money they would otherwise have earned. The village, which is The Guardian could become truly equal, with love replacing monetary reward for those who have the toughest jobs.

Of course, the damage would still occur if a selfish senior manager trousered the missing £100 salary sacrifices and spent the money, so that money must never be spent. Destroying money is illegal in the UK, so throw it into a vault with no door, just a slot for shoving in money.

Let’s just say I’m not holding my breath waiting for that post growth economic experiment to be implemented.

A group of concerned individuals stands in front of a globe with a rising graph, expressing shock and demand for compensation, surrounded by stacks of Guardian articles and a locked box labeled 'Paywall' and 'Senior Staff Retirement Package.'

Why are developing economies pursuing small modular reactors?

The global electricity debate has reached a critical impasse. While developed nations debate the finer points of renewable electricity portfolios, like how much profit is being made, billions of people in the world remain trapped in electricity poverty. For half of the world’s people living on less than $10 per day—and particularly the 565 million Sub-Saharan Africans without electricity—the conversation about electricity must be grounded in pragmatism, not ideology.

A truck transporting a large cylindrical tank on a highway under a cloudy sky.

From America Out Loud News

By Ronald Stein P.E., Dr. Robert Jeffrey, Olivia Vaughan

The global electricity debate has reached a critical impasse. While developed nations debate the finer points of renewable electricity portfolios, like how much profit is being made, billions of people in the world remain trapped in electricity poverty. For half of the world’s people living on less than $10 per day—and particularly the 565 million Sub-Saharan Africans without electricity—the conversation about electricity must be grounded in pragmatism, not ideology.

The US has recently signed an economic and Defense Partnership with the Kingdom of Saudi Arabia that includes civilian nuclear energy.

South Africa expects to lift the care and maintenance status of its Pebble Bed Modular Reactor (PBMR) by the first quarter of next year or even earlier. Alternative sources of stable, continuous electricity, in this instance provided by SMR units, will benefit as environmental trends increasingly move towards green technologies.  These technologies, because of cost and price trends, will become increasingly economic and cost-effective in the future.

A comprehensive economic impact study of South Africa’s small modular reactor (SMR) deployment strategy, undertaken by one of the authors of this report, reveals what is at stake when developing nations pursue practical electricity solutions that can generate continuous, uninterrupted, and emission-free electricity. The findings offer a compelling blueprint for how SMR technology could transform not just electricity access, but entire economies.

Nations need dispatchable electricity. What is often forgotten is that all developed and developing nations require dispatchable electricity to maximise economic growth and efficiency. The purpose is to maximise benefits for their citizens by raising their standard of living, reducing unemployment, and poverty. Dispatchable electricity means that sufficient electricity is available immediately on demand by businesses and the public, 24 hours a day, 365 days a year. Energy sources must first be examined on their ability to meet this criterion. Using South Africa as the example, the primary alternative electricity sources that need to be examined are:

  • Firstly, renewable energy sources in the form of wind and solar that are renowned for their unreliability and unpredictable intermittency.
  • Secondly, fossil fuels in the form of coal and gas.
  • Thirdly, nuclear power.

The Reality Check Beyond Wind and Solar

When visiting a modern hospital or airport, consider everything you see that didn’t exist 200 years ago: the plastic chairs, synthetic fabrics, medical devices, computer components, pharmaceuticals, and countless other products. Many of which are essential for maintaining one’s own family and home.  Now ask yourself: can any of these items be manufactured by a wind turbine or solar array?

The answer exposes a fundamental flaw in current electricity discourse. Oil, gas, and coal aren’t just fuel sources—they’re raw materials for petrochemicals, plastics, pharmaceuticals, fertilizers, construction, infrastructure, and thousands of essential products. The modern world’s material foundation depends on hydrocarbons as manufacturing feedstock to support the supply chain for those essential products.

This distinction matters enormously for developing economies. While wealthy nations can afford to experiment with intermittent renewable sources, backed by existing infrastructure and capital reserves built as a result of the use of fossil fuels now being shunned, developing countries need reliable, continuous power to build industries, create jobs, and lift people from poverty. These policies being set have all the requirements to set a global economic reality of keeping the rich developed world rich and the poor developing world poor. In practice, the “green” policies in the richer countries will negatively affect the economic growth of both the developed world and the developing world.

The resurgence of nuclear-generated electricity is occurring in many countries. The reasons are not difficult to find. The benefits of nuclear power have shown themselves in many ways. Nuclear has proven itself to be: Safe, there have been very few injuries. It is environmentally benign, has very small land use, discharges no pollutants, and produces little waste. It is reliable and has a capacity factor of over 90%. It is energy-dense and scalable. It is economical with a long life and low running costs. South Africa’s Koeberg Power Station has had a long life and is one of the most economical power stations in the country. It is a foundation for other applications, and its Safari reactor is a world’s major commercial producers of medical and industrial radioisotopes.

Numbers That Transform Nations

The economic analysis of SMR deployment, yet to be formally released, demonstrates transformative potential:

  • GDP Impact: Within two decades of operation, an SMR program would contribute approximately R74 billion (roughly $4.3 billion USD) annually to GDP, representing 1.1% of South Africa’s baseline GDP. This is significant growth for the economy. It is an economy-altering development.
  • Employment Creation: The program would generate, within ten years of becoming operational, over 33,000 direct jobs and over 154,000 indirect jobs.  The following decade, it will have created almost 350,000 jobs within two decades, supporting over 1.4 million people. These aren’t temporary construction positions, but sustained employment in high-skill manufacturing, engineering, and operations.
  • Skills Development: Unlike fossil fuel extraction or installations of wind turbines or solar panels, nuclear technology demands—and develops—a highly skilled workforce. An SMR program would create a permanent increase in technical capabilities, helping retain talent while attracting international expertise.
  • Trade Balance: Long-term projections show an ongoing current account surplus of approximately R8 billion ($9.4 billion USD) annually, as exported SMR units and associated services generate hard currency for the developing economy.
  • Tax Revenue: Annual tax generation would exceed R19 billion ($1.1 billion USD), with annual remuneration associated with these jobs approaching R33 billion ($1.9 billion USD)—funds that fuel further development, education, and healthcare improvements.

Why Small Modular Reactors?

Traditional large-scale nuclear plants require massive upfront capital, decade-long construction periods, and proximity to major grid infrastructure. For developing economies like South Africa, these barriers are often insurmountable. Countries in Africa are exceptionally large, a fact that is little known and often overlooked by so-called overseas experts.

SMRs offer a different pathway to electricity. Modern designs—such as helium-cooled, graphite-moderated reactors using advanced fuel configurations—exemplify the advantages:

  • Scalability: Units can be deployed incrementally, matching investment capacity and demand growth. A typical rollout could envision four domestic units annually within years of initial deployment, rising to eight exported units within two decades.
  • Flexibility: Smaller SMR units can be located closer to demand centers, reducing transmission losses and infrastructure costs. They’re ideal for industrial process heat applications, such as powering chemical facilities or electricity generation in regions far from existing power stations.
  • Safety: Passive safety features and simpler designs reduce operational risks. Modern SMR designs incorporate inherent safety characteristics that make them particularly suitable for nations building nuclear expertise.
  • Industrial Development: Unlike imported renewable components, SMR programs build domestic manufacturing capacity. A comprehensive SMR initiative creates an entire nuclear industry value chain: development, engineering, design, and manufacturing.

The Megaproject Precedent

History validates this approach. South Africa’s Richards Bay development, Sasol’s coal-to-liquids technology, Petro SA’s gas-to-liquids technology, and automotive industry growth each transformed regional economies. SMR deployment compares favorably with projected employment to be 340,000 jobs and a dependent population supporting 1.4 million people, while offering a superior balance of payments outcomes.

These megaprojects succeeded because they addressed real needs with practical technology, creating sustainable industries rather than dependency on imported solutions.

Building a Nuclear Industry

SMRs represent more than power generation; they’re platforms for industrial development. A national SMR program involves the construction and operation of units for domestic markets and export, alongside the development of a local nuclear industry with significant local content.

The construction phase includes substantial localization to ensure regular long-term supply by original equipment manufacturers. This creates an entire value chain encompassing development, engineering, design, and manufacturing, significantly enlarging the manufacturing base of the economy.

The operational phase generates ongoing expenditures in wages, fuel acquisition (including nuclear fuel production), maintenance, and subcontracted services—creating permanent economic activity rather than boom-and-bust cycles associated with construction-only projects.

For countries with uranium reserves, SMRs offer additional opportunities. The technology and skills developed can extend to uranium enrichment industries, producing nuclear fuel domestically and for export, adding considerable value to natural resources.

The Path Forward

For the 565 million Sub-Saharan Africans without electricity, and billions more worldwide trapped in electricity poverty, the choice is clear. They cannot afford to gamble for their future on renewable infrastructure of wind turbines and solar panels, which are intermittent and undermine industrial development. The full lifecycle economic cost of renewable electricity projects does not support the needs of growing economies and keeps these countries trapped as consumer nations in perpetual debt cycles.

SMRs offer developing economies what they need most: reliable baseload power that builds domestic capability, creates quality employment, and establishes technology platforms for future growth. The alternative—continued electricity poverty or dependency on imported sources of energy for transportation and electrification—condemns billions to economic stagnation.

The question isn’t whether developing nations should pursue nuclear technology. It’s whether wealthier developed nations will support or obstruct that pragmatic choice. Electricity policy must serve people, not ideology. For the billions of people living on less than $10 a day, that’s not just good policy; it’s a moral imperative. The path to prosperity runs through reliable electricity. Small modular reactors can light that way.

Please share this information with teachers, students, and friends to encourage Energy Literacy conversations at the family dinner table.

Click this Link to Sign up for Energy Literacy from Ronald Stein.

Global CO2 Emissions in 2024

Why CO2, and not GHG (including CH4, etc.)? Well, CO2 comes from burning fossil fuels, and the others come from a variety of processes. I think CO2, as the main greenhouse gas, is the one to focus on. I doubt this analysis changes fundamentally if we replace CO2 with total GHG.

Stylized representation of the chemical formula CO2 with a globe illustrating the Earth, symbolizing global carbon dioxide emissions.

From Climate Scepticism

By Jit

An Unalloyed Record of Success

Mark has written about the latest EDGAR release here. As last year, I also wanted to show some figures illustrating the global picture in 2024 and the changes since 2023.

Global Emissions of CO2

Why CO2, and not GHG (including CH4, etc.)? Well, CO2 comes from burning fossil fuels, and the others come from a variety of processes. I think CO2, as the main greenhouse gas, is the one to focus on. I doubt this analysis changes fundamentally if we replace CO2 with total GHG.

The world’s total emissions went up from 39.1 Gt CO2 in 2023 to 39.6 Gt CO2 in 2024. The net rise was about 520 Mt CO2 year-on-year, a quantity somewhere between Brazil and Canada’s annual total last year.

Line graph illustrating global CO2 emissions from 1970 to 2024, showing an increase from approximately 15,000 Mt/yr to 39,600 Mt/yr.

The top ten emitters are tabulated below:

A table listing the top ten CO2 emitters for 2024, with each country's name and its corresponding carbon emissions in metric tons.

And here are the top ten growers and shrinkers, with “Internation Aviation” and “International Shipping” included:

Table showing the top ten CO2 emitters and CO2 reduction by various countries and sectors.

Per-Capita emissions

The highest per-capita emissions come from Palau, at 63.7 t CO2/person/yr, and the lowest from the Faroes, at 42 kg CO2/person/yr. Warm jumpers? These figures compare to the global average of 4.888 t CO2/person/yr, and the UK’s of 4.254 t CO2/person/yr.

ASTERISK: averages conceal a lot of detail. The median value is a lot lower than the average, thanks to the relatively few individuals with large carbon dioxide emissions to their name. This applies globally and within each country; the distributions are heavily right-skewed. Humans on the planet in the most frequent emission bin are personally responsible for 2-3 t CO2 per year – that is a SWAG, because the data does not allow the number to be computed.

Interestingly, the per-capita emissions of the average world human have not changed much over the years – see the grey line in the figure below. Some countries have grown their per-capita emissions, and others have reduced theirs. I know you can think of examples: I show a tale of two such countries below.

A graph illustrating CO2 emissions per capita from 1970 to 2024 for the UK, China, and global averages, with trend lines showing changes over the years.

There are various ways of determining when the UK peaked as a country. They generally, to my mind, point in the same general temporal vicinity:

Maximum energy use: 2000

Last year with a budget surplus: 2001

Last year as a net exporter of energy: 2003

Peak productivity of employment in energy: 2005

See here for more on the energy part of these.

Meanwhile, the other featured country joined the WTO in 2001 and has not looked back. Rather spookily, China’s rise is almost a mirror of the UK’s decline.

GDP vs CO2 emissions

At first they said we could cut our emissions and still have more. Then they said we had to stop growing altogether, or shrink. The people saying this are among those who have so far been largely unaffected by the UK’s, and the West’s, attack of climate angst and piety.

The next figure shows just how decoupled wealth was from carbon dioxide emissions in 2024. A few countries are labelled. [Note the log-log scale.]

Scatter plot showing the relationship between GDP and CO2 emissions for various countries in 2024, highlighting key nations such as China, the United States, and the United Kingdom.

ASTERISK: the GDP data is back-calculated from within the EDGAR spreadsheet. Ultimately, it seems to come from the World Bank (PPP). It is at least plausible that both GDP and CO2 are estimates with common supporting variables – that the relationship is so clear because of this connection.

When it comes to your country’s GDP, there are two ways to grow it on this figure. One is to increase your energy use, and your fossil fuel energy use. [Moving right and up in the cloud.] The other is to allow technology to enable a more efficient use of energy. [Moving vertically in the cloud.] The plan of reducing emissions and growing GDP is not one that looks viable on the evidence of this figure.

It has been done, as the final figure shows. Here, 2001 and 2024 numbers are plotted on the same axes.  Several countries are labelled. All the labelled countries have grown. Some have grown while increasing their emissions – others while decreasing them. The distributions have shifted up and right.

A scatter plot comparing GDP in billion dollars to CO2 emissions in megatons from 2001 to 2024, featuring labeled countries including the United States, China, United Kingdom, Japan, and the Philippines.

ASTERISK: Developing countries naturally grow both emissions and GDP as they industrialise. But it is worth noting that the emission cuts made by for example the UK in this period were some of the easier to do: swapping coal for gas as electricity generators for example.

Editorial

Cutting CO2 – we all love it, like paying taxes or obeying rules. We just like it when some other mug is doing it. Even criminals prefer to operate in places where everyone else is doing what they are supposed to.

Of the 208 countries in the EDGAR database, 47 made emissions cuts last year. On the other hand, 161 countries increased their emissions.

The majority of countries just do not care about CO2 emissions. They will enjoy watching the countries of the decadent West cutting theirs.

Data

EDGAR here. The good folk at EDGAR tend to revise previous years’ data, so do not carve the presented numbers into an Edstone. [2023 numbers have changed this year, for instance.]

Bonus video

In case we’re all feeling very depressed about all this, let’s semi-ironically cheer ourselves up with four minutes of Randy Newman.

Climate crisis on track to destroy capitalism, warns top insurer

Beware insurers wanting to increase premiums!
The Guardian’s Damian Carrington has fallen for the old trick!

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

Beware insurers wanting to increase premiums!

The Guardian’s Damian Carrington has fallen for the old trick!

The climate crisis is on track to destroy capitalism, a top insurer has warned, with the vast cost of extreme weather impacts leaving the financial sector unable to operate.

The world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks, said Günther Thallinger, on the board of Allianz SE, one of the world’s biggest insurance companies. He said that without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments.

The core business of the insurance industry is risk management, and it has long taken the dangers of global heating very seriously. In recent reports, Aviva said extreme weather damages for the decade to 2023 hit $2tn, while GallagherRE said the figure was $400bn in 2024. Zurich said it was “essential” to hit net zero by 2050.

Thallinger said: “The good news is we already have the technologies to switch from fossil combustion to zero-emission energy. The only thing missing is speed and scale. This is about saving the conditions under which markets, finance, and civilisation itself can continue to operate.”

Read the full story here.

Meanwhile back in the real world, Allianz are doing very well thank you! All of these supposed weather disasters have not made a dent in profits.

https://www.allianz.com/en/investor_relations/results-reports/annual-reports.html

Operating profits increased to £16.0 billion last year, a margin of 9% of premiums.

Taking away the Life Sector, the Property and Motor Sector still accounted for over half the total profit.

The insurance business is all about calculation of risk, which then leads to the setting of premiums. If risks increase, for whatever reason, premiums rise in line; the insurer over time continues to make his margin.

Some things may become uninsurable, a house built on a flood plain, for instance. That’s tough luck for the homeowner, but the house should clearly never have been built there.

But overall weather losses have been falling in real terms as a proportion of GDP:

https://rogerpielkejr.substack.com/p/climate-change-is-showing-its-claws

Given that the world’s GDP is estimated at $106 trillion, Roger Pielke’s figures suggest weather losses of about $200 billion a year, in line with the $2 trillion quoted by Aviva for the decade to 2023.

The Guardian would like its readers to believe that such numbers are catastrophic and unaffordable for the insurance industry. In reality it is just business as usual.

But what better way to push up premiums than to play the climate card.

Climate-Obsessed Pols Blew Canada’s Opportunity

“‘Canada absolutely has potential to be a global superpower,’ but the nation has lacked the visionary leadership and policy framework to capitalise on its advantages.”

From Science Matters

By Ron Clutz

Jamie Sarkonak summarizes the bogus start to Canada Federal elections in his National Post article Liberals pledge to make Canada a superpower after years of preventing it.  Excerpts in italics with my bolds and added images.

A tattered Canadian flag is shown on top of a building in downtown Calgary on Friday, Jan. 17, 2025 where the U.S. Consulate is located. Photo by Jim Wells/Postmedia

Sunday’s edition of the Financial Times included the oft-made observation that Canada is brimming with potential, and the oft-made conclusion that this country would be much better off if it simply developed its God-given gifts.

The article, Unlocking Canada’s Superpower Potential by Tej Parikh, made the bullish case for this country’s future prospects: Canada is geographically huge and loaded with natural resources — on paper, at least, it has the makings of an actual global superpower.

“‘Canada absolutely has potential to be a global superpower,’ but the nation has lacked the visionary leadership and policy framework to capitalise on its advantages.”

It was, with gentle vagueness, a condemnation of the federal Liberal government and what is now being called Canada’s “lost decade”: a period of 10 years in which the current government ratcheted up onerous environmental and Indigenous-consultation requirements and, where ministerial approvals are concerned, delayed decisions, all geared at keeping undeveloped parts of Canada in their natural state.

Terms like “circular economy” and “just transition” are the Liberal synonyms for this no-growth agenda, which has delivered us a fraction of a percentage of GDP growth per capita from 2014 to the end of 2024 — a time period in which peer countries have managed double-digits.

For anyone who missed out on all the bad governance robbing Canadians of superpower prosperity, this brief video exposes the crimes against the citizenry.  For those who prefer reading, I provide below a transcript from the closed captions.

Transcript

This is Alberta the fourth largest Province and home to about 4.6 million people. It ranks third in GDP just behind Quebec and first in GDP per capita primarily off the back of oil and gas extraction. While its discovery in the first half of the 20th century has brought Canada riches, for reasons from political to economic it never reached its full potential as an energy superpower, and Canadians as a whole lose out. We’ll be diving into how its energy policies have evolved and the path it is on whether for natural gas, nuclear, hydrogen and more.

Canada has the third largest proven oil reserves and by most estimates in the top 20 in terms of natural gas reserves. It is a top 10 producer of oil and gas, meaning it is engaged in extracting processing and supplying of these resources for domestic production.

Natural Gas

For natural gas exports it is in the top six, all of which goes to the US via pipelines. To export across water requires Investments to build liquid natural gas or LNG facilities to cool the gas into a liquid state in a process called liquefaction. In 2024 the the first export terminal will finally be completed in Kitimat BC called LNG Canada with gas coming through the coastal gas tank pipeline set to complete after 5 years of construction and a price tag that jumped from 6.6 billion to 14.5 billion.

But don’t expect other facilities to be constructed anytime soon. On February 9th, 2022, 2 weeks before the Russian invasion of Ukraine, the federal and Quebec governments rejected approval of an LNG plant in Saguenay that would have allowed for the export of Western Natural Gas to European markets.

They cited increased greenhouse gas emissions
and lack of social responsibility.

While most of the natural gas is located in Northern Alberta and BC in the Montney formation, there is also gas in the Atlantic provinces. However New Brunswick, Newfoundland and Labrador, and Nova Scotia have all banned the process of fracking used for shale gas development over safety fears, thereby losing out on tens of billions of economic potential. Ironically the same provinces import a lot of natural gas extracted from the US through the process of fracking, Quebec also has natural gas resources but in April 2022 banned all oil and gas extraction in the province.

This means not only are pipelines from western Canada rejected from going through Quebec, natural gas extraction and export facilities in these provinces have been rejected as well. The demand if not met by Canada will be filled by other countries that might not share the same values nor care about the environment, with the jobs, millions in royalties and taxes going elsewhere. Since 2011, of the 18 proposed LG export projects including five on the East Coast. only the Kitimat project has proceeded with the others being cancelled, blocked or abandoned.

While the US in the same time frame has built seven LG facilities, five more under construction and approved 15, enabling them to go from a net importer to a top three exporter in the world. Australia has 10 LG facilities with the majority built in the 2010s helping to satisfy energy demand from Asian countries and to help them move away from coal. Qatar too has benefited greatly from extracting its resources as European countries look for alternatives to Russian gas.

These three countries have all signed decades-long deals to supply natural gas. Yet when Japan, South Korea, and Germany showed interest in Canadian LG, the Prime Minister said, “There has never been a strong business case.” While critics point out that natural gas is a fossil fuel contributing to greenhouse gas emissions, it emits 40% less than coal and 30% less than oil.

Nuclear Energy

We can’t talk about energy policy without mentioning nuclear, because it does not emit greenhouse gases while being a reliable source of energy, not dependent on the wind blowing or the sun shining. Currently nuclear supplies 58% of Ontario’s electricity needs and 15% Nationwide with all but one of the 19 nuclear reactors. The one located outside of Ontario is in New Brunswick. No new reactors have been completed since 1993. Meanwhile coal is still used to generate 6% of Canada’s electricity needs despite the country having the third largest uranium reserves, the fuel needed for reactors.

But on September 19th 2023, Canada did reach a $3 billion deal to finance nuclear power . . .in Romania. In fairness this deal does support the export of made in Canada Candu style reactors. An industry in which historically Canada has been a leader. Any discussion should include nuclear, as one of the trends in the nuclear industry is small modular reactors or SMRs which should be easier to manufacture and transport enabling its use in remote regions.

Hydrogen

Another Trend that the federal government has prioritized in the 2023 budget relates to hydrogen. 16.4 billion has been allocated over 5 years for “clean” Technologies and “clean” hydrogen tax credits, which are subsidies for costs in setting up equipment to produce green hydrogen. When the German Chancellor Olaf Schultz arrived in Canada in August 2022 asking for LNG, Canada instead offered green hydrogen created by wind turbines generating electricity to perform electrolysis by splitting water to produce hydrogen. It is both inefficient and expensive to produce green hydrogen meaning there is little business case for it without subsidies, since more than 99% of hydrogen is currently produced using fossil fuel. While green hydrogen will likely play a role in industrial processes, such as replacing coal used in steel production or creating ammonia in fertilizer production, its role in transportation is likely negligible. Furthermore, using hydroelectricity, nuclear or natural gas to create hydrogen plays into Canada’s strengths in a way that solar or wind does not, as we’ll see shortly.

Solar and Wind

A big part of Canada’s net zero emissions by 2050 plan involves solar and wind energy, yet one of the biggest beneficiaries of that shift would be China given its dominance in the Clean Energy Solution space, whether solar panels, wind turbines or EVS. From the mineral extraction to the processing, refining and Manufacturing, there is much demand for critical minerals like copper cobalt nickel lithium and Rare Earth elements chromium zinc and aluminum. China owns stakes in many mines around the world including Canadian ones extracting these minerals to control the supply chain. According to 2022 data from the International Energy Agency, their share of refining is 35% for nickel, 60% for lithium, 70% for Cobalt and a whopping 90% for Rare Earth.

This dependence on one country means the power to squeeze Supply or raise prices at any moment, which is a big reason why on August 16th, 2022, the Biden Administration signed the ironically named Inflation Reduction Act which provides 369 billions of funding for clean energy projects. The intention is to not only reshore to the US but also Near shore or Friend shore to allies like Canada, Whether in mining of critical minerals to manufacturing.

Canada acted decisively a few months later in the same year to force
three Chinese companies to sell their stakes in Canadian mining companies
. . . Oh wait just kidding.

In all seriousness the country and especially Quebec can play a role in the supply chain so long as projects can be approved in a timely manner which really is the underlying theme of this video. Having these minerals also incentivizes battery and auto manufacturing companies to invest in factories, helped massively by subsidies of course. 13 billion over 10 years is what took Volkswagen to commit to a battery plant in Southern Ontario. Likewise, 15 billion in subsidies was committed for a Stellantis LG battery plant in Windsor and other projects like this. That’s a lot of money with these two subsidy awards not expected to break even for 20 years according to the Parliamentary budget office. And that’s if these Legacy auto companies like Stellantis and Volkswagen will be relevant by that time.

That’s the kind of energy policy decisions made in Canada in recent times,
and why we haven’t leveraged our natural resources into Superpower.

Mark Carney’s Climate Obsession Worse than Trudeau’s

The future of Canada’s badly governed energy sector is further threatened by replacing Trudeau with Carney. Terry Newman explains in his National Post article Mark Carney’s climate obsessions will put Trudeau to shame.  Excerpts in italics with my bolds and added images.

Don’t trust his pledge to turn Canada into an energy superpower.

For all of Carney’s supposed superior knowledge of the world and markets, the art of provincial negotiations and incentives for private investment in natural resources appears to have already escaped his grasp. There’s evidence to suggest this is because, at heart, Carney is likely to be a fully-fledged ESG prime minister (ESG being short for environmental, social, and governance principles being imposed on business).Unfortunately, everything Carney’s said and done up until this point suggests not only that he’d fail to unite Canadian provinces to create this energy super-economy, but that’s he’s not actually interested in doing so in the first place.

The Liberal party may have a new face, but Carney’s insistence on keeping an emissions cap and industrial carbon tax in place — both products of Justin Trudeau’s Liberal government — doesn’t invoke much confidence in his energy superpower plan.

Since the Liberals came to power in 2015, they implemented the Impact Assessment Act, which slowed approvals, the federal industrial carbon pricing system (2018) and the oil and gas emissions cap (slated for 2026) — all with the goal of reducing greenhouse gas emissions from the oil and gas sector to net zero by 2050.

Since 2015, many projects have been stalled or cancelled, including the Northern Gateway Pipeline (cancelled by government in 2016, citing a federal ban on tanker traffic and Indigenous opposition); the Energy East Pipeline (cancelled by the company in 2017, citing regulatory hurdles and low oil prices); Pacific NorthWest LNG (cancelled in 2017 due to market conditions and regulatory delays); the MacKenzie Valley Pipeline (cancelled in 2017 due to low gas prices and regulatory uncertainty); Énergie Saguenay LNG (cancelled in 2021, rejected by Quebec government over emissions concerns, not challenged by the federal government); Bay du Nord Offshore Oil (shelved in 2022, citing high costs and regulatory uncertainty); Teck Frontier Mine (cancelled in 2020, amid climate policy debates); and the Keystone XL Pipeline (cancelled 2021, due to failure to secure a U.S. permit and Canadian regulatory costs).

The only thing that’s changed about the Liberal party is the addition of Carney, and his record suggests that he will be driven by climate policy, at least as much as the Liberals have been, and potentially much more so. He was, not so long ago, the United Nations’ special envoy on climate action and finance and he founded and co-chaired the Glasgow Financial Alliance for Net Zero (GFANZ), resigning on Jan. 15, the day before he threw his hat into the Liberal leadership race.

These roadblocks long predate Carney’s ascension, and he has yet to explain how the Liberal government suddenly has either the ability or desire to address them.

Where’s the evidence Carney will be less stringent on energy projects and, therefore, better for the Canadian economy than his predecessor? If anything, especially given his longstanding ESG obsessions, all evidence appears to point to the contrary — that Mark Carney could be even more dedicated to strangling Canada’s resource economy than Trudeau.