Coppola Comment

The world is transitioning from a carbon-intensive to a metals-intensive economy. Low-carbon technologies use much larger amounts of metal than traditional fossil fuel-based systems. Demand for metals is thus rising exponentially, fuelling a boom in mining and production. But this creates an environmental challenge. Metals extraction and processing is a significant contributor to global warming and a major pollutant. Unless more environmentally-friendly ways of generating energy from renewable sources can be found, saving the planet from carbon emissions may prove extremely costly for our fellow creatures and even for ourselves.   Climate change is driving a metals and mining boom The Paris Climate Agreement , which was ratified by 174 countries and the European Union in 2016, aims to keep global warming “well below” 2 degrees Celsius this century and ideally not more than 1.5 degrees Celsius. Achieving this challenging target is dependent to an unknown degree on factors out...

Earlier today, the Governor of the Bank of England, Andrew Bailey, gave a speech at the Resolution Foundation outlining the nature of the Covid-19 crisis and the challenge that it poses for monetary policy. But as his speech progressed, it became clear that the Bank faces a much larger challenge. Covid-19 hit the UK economy at the end of a dismal decade. Returning to "where we were" before the pandemic won't be good enough.  Just how dismal the 2010s were is evident in this chart from Andrew Sentance:  Even before Covid-19 struck, average GDP growth was well below its historical average and heading downwards. The 2010s were, to put it bluntly, a decade of stagnation.  The 2000s were slightly worse, but that was because they included the deep recession after the financial crisis, during which the economy shrank by 6%. For the 2010s, there was no such excuse.  So Covid-19 hit an already under-performing economy. As a result, Sentance's forecast for the 2020s is frankl...