“A complex supply chain…”

Trade is a major cause of global warming. Think of all those goods travelling from far away on polluting ships and raw materials and components whizzing across the world in complex supply chains.

The world can harness trade to save the planet

The right trade policies can also do a lot to save the planet. The solution is to tax trade in carbon-intensive goods and get rid of tariffs on clean ones while also subsidising green technologies and stopping aid to dirty ones. And to do all this fairly.

Trade wasn’t prominent at COP27, the United Nations climate conference which just finished in Egypt. It needs to be central by the time of next year’s COP28 in Dubai. Five principles would make a big difference.

The first step is to have even-handed carbon tariffs. Taxing companies according to the amount of carbon they emit would do a lot to stop climate change. It would encourage them to cut their emissions and switch to cleaner technologies. The International Monetary Fund thinks a tax of $75 for each tonne of carbon emitted by 2030 would do the trick.

Ukrainians suffer in cold, darkness as president implores U.N. to punish Russia

Ukrainian President Volodymyr Zelenskiy demanded the United Nations punish Russian air strikes on civilian infrastructure, after a missile barrage caused the worst nationwide power outages yet, plunging cities into freezing darkness.

With millions of Ukrainians enduring below zero temperatures at home, authorities were working hard on Thursday to get the lights and heat back on. Russia’s latest missile barrage killed 10 people, shut down Ukraine’s nuclear power plants and knocked out most power nationwide.

By Thursday morning, regional authorities in Kyiv said power had been restored to three quarters of the capital and water was working again in some areas. Transport was back up and running in the capital, with buses replacing electric trams.

Authorities hoped to restart the three nuclear power plants in Ukrainian-held territory by the end of the day.

Since early October, Russia has launched huge barrages of air strikes around once a week at energy targets across Ukraine, each time firing hundreds of millions of dollars worth of missiles to knock out Ukraine’s power grid.

Europe rushes to fill up on Russian diesel before ban begins

European traders are rushing to fill tanks in the region with Russian diesel before an EU ban begins in February, as alternative sources remain limited.

The European Union will ban Russian oil product imports, on which it relies heavily for its diesel, by Feb. 5. That will follow a ban on Russian crude taking effect in December.

With few immediate cost-effective alternatives, diesel from Russia has made up 44% of Europe’s total imports of the road fuel so far in November, compared with 39% in October, Refinitiv data shows.

Although Europe’s reliance on the Russian fuel has fallen from more than 50% before Moscow’s February invasion of Ukraine, Russia is still the continent’s largest diesel supplier.

Global regulators to target crypto platforms after FTX crash

The crash of FTX exchange has injected greater urgency into regulating the crypto sector and targeting such ‘conglomerate’ platforms will be the focus for 2023, the new chair of global securities watchdog IOSCO said in an interview.

Jean-Paul Servais said regulating crypto platforms could draw on principles from other sectors which handle conflicts of interest, such as at credit rating agencies and compilers of market benchmarks, without having to start from scratch.

Crypto assets like bitcoin have been around for years but regulators have resisted jumping in to write new rules.

But the implosion at FTX, which left an estimated one million creditors facing losses totalling billions of dollars, will help change that, Servais told Reuters.

“The sense of urgency was not the same even two or three years ago. There are some dissenting opinions about whether crypto is a real issue at the international level because some people think that it’s still not a material issue and risk,” Servais said.

“Things are changing and due to the interconnectivity between different types of businesses, I think it’s now important that we are able to start a discussion and that’s where we are going.”

ECB set to raise deposit rate 50 bps as euro zone enters recession

The European Central Bank will press on with policy tightening, adding 50 basis points to its deposit rate next month as it worries rapid price growth is becoming entrenched, despite the bloc almost certainly entering recession, a Reuters poll found.

Inflation in the region has soared due to surging energy prices following Russia’s invasion of Ukraine and disrupted supply chains, reaching 10.6% last month – more than five times the ECB’s 2.0% target.

Initially saying rising inflation was transitory, the central bank didn’t start raising interest rates until July, later than most of its major peers, but has since raised its key rates by 200 bps.

It will lift its deposit rate by another 50 bps on Dec. 15, taking it to 2.00%, and do the same to the refinancing rate, putting it at 2.50%, according to the median forecasts in the Nov. 15-21 Reuters poll.

That deposit rate view was held by a majority of 45 of 62 respondents, while 14 said it would add another 75 bps as it has done at its previous two meetings. Only three said it would opt for a modest 25-bp increase.

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