I do not write about things I don't know much. The world of finance is not my area of expertise, so I don't usually write about it, but I mentioned something to acquaintances a few weeks ago that has been bothering me.
Last time I mentioned that Nature had published calculations of carbon dioxide emissions for 2020 and that in 2020 carbon dioxide emissions had been reduced by 7% compared to the previous year. That's four to five times the reduction that we saw during the last Financial Crisis. The first figure in the paper shows just how extraordinary last year's carbon emissions were. Another chart shows that while developed countries have reduced their carbon dioxide emissions since the Paris Agreement, middle and developing countries have continued to increase their emissions. However, Corona's impact has been almost equally to lower carbon dioxide emissions to around 7% year-on-year. With their considerably better than average performers, middle-developed countries do not appear at first glance to have reduced their carbon dioxide emissions. Still, looking at the median, the difference between developed, middle-developed and developing countries does not seem significant.
Carbon dioxide emissions are directly linked to an economic activity unless there is something wrong with the economy. Decoupling is an attempt to develop the economy without increasing carbon dioxide emissions. Only a few examples of how advanced countries might achieve this, but it is challenging to achieve decoupling in the middle and developed countries. That said, in countries where GDP reporting is unreliable, energy use and carbon emissions may be more accurate measures of economic performance.
I am talking about this because while the digital economy may have strengthened the decoupling of economies, the reality is that only a limited number of countries and regions have decoupled and that lower carbon emissions indicated an economic impact.
For example, last year, Indonesia's GDP growth was -2.2%, according to a World Bank report. This number is contrary to the country's target of 6% growth in the future, which the World Bank calculates will be 4.4% and 4.6% over the next two years.
In both the US and Japan, there will be fewer bankruptcies in 2020 than in 2019. That's because the government is helping to keep them from going under. Companies that would have gone under without the Corona may not have gone under because of the bailout. It's a situation where something is about to fall, but it's holding on to keep it from falling. I've explained it before—a critical slowdown. The European Union's TIPPING+ project looks at energy shifts and decarbonisation policies using this tipping phenomenon, where things change very rapidly. What we do know is that we can't predict when this tipping phenomenon, like a stock market crash, will happen.
Similarly, we can't predict when a critical slowdown will occur. But it is possible to observe critical slowdowns, isn't it? And the critical slowdown occurs before the tipping phenomenon occurs. In other words, if the critical slowdown is now, the tipping phenomenon will occur next. What would that be, a stock market crash? It could be bigger tipping. I'm not trying to scare people. I'm not a finance expert, but as a researcher studying climate change and tipping, I've done my analysis of what's happening.