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(NGMI = Not Gonna Make It...)
The loudest voices claim that THIS is the chance for a brand-new world...
An opportunity to do all of those things we wanted to do before, yet somehow couldn't...
These ambitions will surely fall short of being achieved, and unexpected changes are far more likely...
Take a look at the political playing field.
In Germany, Merkel's reign is set to end limply, with the party being led into elections by a weak candidate (Laschet), while more socialist/left-wing candidates (SPD and Greens) are far more popular, and likely to lead any coalition.
In Canada, Trudeau called early elections to try and cement a majority. The plan has backfired so far, with the Conservative candidate far more popular than predicted.
In the UK, Boris Johnson is announcing National Insurance hikes to 'fix social care'...
As one cabinet minister put it...
“After all that’s happened in the last 18 months they can’t seriously be thinking about a tax raid on supermarket workers and nurses so the children of Surrey homeowners can receive bigger inheritances.”
In the EU, political choices have pushed energy prices to record-highs and it's not even Winter yet...
France go to the polls in 2022 & Macron has never really been Mr Popular...
China has decided that this is the perfect time to redesign their national economy...
Japan's Prime Minister Suga has just resigned...
Over in the US, getting rid of Trump hasn't been the quick fix many hoped it would be...
All of this while the developed world is heading into a weird, transitory period of stagflation.
Supply chains are still broken, economies and labour markets are still recovering, while wealth inequality is still widening...
According to a Maersk executive, these supply chain problems will remain with us for a while longer:
“Consensus in the industry is we’re unlikely to see a cleaning up of the situation until deep into next year,”
“We need lower [consumer demand] growth to give the supply chain time to catch up, or differently spread out growth. Over a long period of time, we will need to recover efficiency.”
How long until this situation switches to irrecoverable (lost) profits rather than 'deferred growth'?
It's already limiting production
Perhaps more importantly, what does this say about the global economy going forward?
Government support is ending... What if lockdowns and restrictions return in the coming months? I wouldn't bet on the same levels of support...
Perhaps it's too soon for big political surprises, but the seeds are sown. All that's required is the right fertiliser...
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How about electric vehicles?
Net zero emission targets will require widespread adoption of fully electric vehicles by private motorists but there are significant social and economic barriers that will have to be overcome to make this a reality.
Motorists' fears about the availability of charging points, running out of power on long journeys, and lengthy waiting times to top up the battery (collectively known as "range anxiety") are often cited as the main obstacle.
All fixable, any other problems?
But the bigger problem is the high upfront capital cost of buying fully electric vehicles compared with hybrids and traditional gasoline and diesel-fuelled cars, which is a major barrier for middle and lower-income households.
Seventy years of research into the diffusion of innovations and new technologies has shown early adopters usually have more social and economic advantages
Ah yeah, THAT.
The above is taken from this column by Reuters Energy analyst John Kemp.
The inequality issue even reaches into charging...
Lower income households are likely to face significantly higher electricity costs for charging their vehicles because they are likely to rely more heavily on public charging points rather than charging at home.
Policymakers expect most fully electric vehicles will be charged at home overnight, taking advantage of cheap off-peak electricity, and possibly allowing owners to earn further discounts by providing grid balancing services.
But 30% of British households do not have access to off-street parking, which means they will have to rely on public charging points, which are likely to remain more expensive, and cannot participate in grid balancing.
Public charging points are currently two to four times more expensive than charging at home, and likely to remain more expensive, given the need for providers to earn a return on their investment.
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Then there's the grid itself.
There's a widely-held assumption that MORE power generation will be required.
Spare capacity exists, but not at times of peak demand...
Financial incentives (cheap overnight electric) will help with this, although some increased demand throughout the day is bound to occur.
Can the power grid be made resilient enough to support an increasingly electrified society?
Prolonged blackouts in Louisiana following Hurricane Ida are a reminder the power grid needs to become more resilient as well as reliable if even more services such as electric vehicles are going to depend on it in future.
But in the rush to electrify the entire energy system, policymakers may be inadvertently increasing the vulnerability of the economy and society in the event of a large-area, long-duration power failure.
Rather than several closely connected but separate systems for electricity, gas, oil, and transport, in future there will increasingly be only one very tightly integrated system, increasing its vulnerability to catastrophic failure.
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