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Weekly Roundup - Cost of Climate Change, China´s EV Industry and Apple´s Strategic Shift

Yulia Fedorova

19 Apr 2024

A study by researchers from Potsdam and Berlin, published in Nature, projects that climate change could cost the global economy $38 trillion annually by 2049, based on data analysis from over 1,600 regions over 40 years. This cost, which could range from $19 trillion to $59 trillion, is attributed to the impacts of temperature and rainfall changes on agriculture, labor productivity, and infrastructure. The study indicates that due to past emissions, a 19% income reduction in the global economy is already inevitable within the next 26 years, and costs could escalate with increased weather extremes. It highlights that the financial damages from inaction vastly exceed the $6 trillion required to meet the Paris Climate Agreement goals. The research emphasizes the disproportionate impact on tropical countries, which are less responsible for and less capable of adapting to climate change, underlining a significant equity issue. This situation complicates global negotiations, with poorer countries calling for wealthier nations to bear more adaptation costs. The upcoming COP29 summit in Baku, Azerbaijan, is expected to focus on climate financing, addressing these disparities. The study serves as a critical reminder of the economic and ethical imperatives for global action on climate change.

During his visit to China, German Chancellor Olaf Scholz expressed concerns about the overproduction of electric vehicles, mirroring U.S. Treasury Secretary Janet Yellen's earlier comments, while cautioning against protectionism amid the EU’s investigation into Chinese electric-car imports. Scholz emphasized the need for a balanced approach to address competitive challenges without resorting to protectionism, recognizing China's significant role in the global automotive market, especially for German companies like Volkswagen, BMW, and Mercedes-Benz. He highlighted the efficiency and innovation of China's EV industry, noting the strategic business practices and technological advancements of companies like BYD and CATL. Scholz's discussions with President Xi Jinping stressed the importance of cooperation and fair competition, underscoring the mutual benefits of engaging with China's rapidly evolving automotive sector.

Apple has shifted its strategic focus towards Southeast Asia, stepping away from its long-standing emphasis on China due to sales declines and supply chain risks. CEO Tim Cook's recent five-day tour of Vietnam, Indonesia, and Singapore marks an effort to explore new markets and diversify the company's supply chain. Southeast Asia, currently a small but rapidly growing part of the iPhone market, is seen as a high-end market with potential for future growth. Cook's visit highlighted manufacturing and investment opportunities, including increasing spending on Vietnamese suppliers, considering manufacturing facilities in Indonesia, and expanding Apple's campus in Singapore. This pivot towards Southeast Asia aims at reducing dependency on any single market or manufacturing hub, reflecting a broader trend among global companies towards supply chain diversification.

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Dive deep into research

"Hybrid machine learning-metaheuristic model for sustainable agri-food production and supply chain planning under water scarcity" by Mobina Mousapour Mamoudan, Ali Jafari, Zahra Mohammadnazari, Mohammad Mahdi Nasiri, Maziar Yazdani (2023)

"Towards a European supply chain for CO2capture, utilization, and storage by mineralization: Insights from cost-optimal design" by Hesam Ostovari, Luis Kuhrmann, Fabian Mayer, Hannah Minten, Andre Bardow (2023)

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