Forget the poetic flap of a butterfly’s wings in Beijing causing rain in Central Park. Climate issues in Asia-Pacific are measured in superlatives. The world’s biggest population. Two of the three largest carbon dioxide-emitting countries and the largest share of emissions globally. […]
By Ian Parry
Over the next decade, global greenhouse gas emissions need to be cut by 25– 50 percent to be on track for meeting the 2015 Paris Agreement goal of containing global warming to 1.5–2°C.The United States intends to do its part. Its climate plan pledges US carbon neutrality by 2050, with a 2030 emissions target to be announced shortly.
Global uncertainty reached unprecedented levels at the beginning of the COVID-19 outbreak and remains elevated. The World Uncertainty Index—a quarterly measure of global economic and policy uncertainty covering 143 countries—shows that although uncertainty has come down by about 60 percent from the peak observed at the onset of the COVID-19 pandemic in the first quarter of 2020, it remains about 50 percent above its historical average during the 1996–2010 period.
Uncertainty in systemic economies matters for uncertainty around the world.
What drives global uncertainty?
Economic growth in key systemic economies, like those of the United States and European Union, is a key driver of economic activity in the rest of the world. Is this also true when it comes to global uncertainty? For example, given the higher interconnectedness across countries, should we expect that uncertainty from the U.S. election, Brexit, or China-U.S. trade tensions spill over and affect uncertainty in other countries?
To answer this question, we construct an index that measures the extent of “uncertainty spillovers” from key systemic economies—the Group of 7 […]