David Fickling’s View to 2022: Energy, Bitcoin and Climate

What 16th-Century Venice Teaches Us About Crypto: Gambling and the financial state are intimately bound up together. It’s little accident that the first modern lotteries originated in Venice, the city that issued the first sovereign bonds. The modern state can be remarkably tolerant of people winning and losing fortunes, so long as it gets some benefit. Where those are absent, however, governments grow impatient with the turmoil of unrestricted speculation, and crack down hard. If Bitcoin and its ilk are to survive an era when their downsides are becoming ever more apparent, they’ll need to find a way to betray their libertarian roots and cut deals with the state.   Covid Vaccines May Become a Viable Business. That’s a Problem: Despite being distributed, in many cases, to almost every person on the planet, vaccines have traditionally been an unprofitable backwater for the pharmaceutical industry. For decades, there have been concerns that the R&D pipeline for new ones is drying up. The rush of orders for Covid booster shots represents a break with that model. In the future, treating vaccines as just another branch of the pharmaceutical industry will leave their miraculous scientific potential hobbled by a broken business model. Vaccines aren’t consumer products. They’re infrastructure. Evergrande and China’s Energy Crisis Are Two Sides of One Coin: Premier Li Keqiang once came up with an index of electricity consumption, rail cargo and loan growth to provide a more reliable guide to China’s economy than easily fudged official GDP figures. With property developer Evergrande teetering and power cuts spreading, two of those signals flashed red this year. Growth has been fueled for decades by credit and carbon, and Beijing finally seems to be getting serious about changing that. Whether the economy can sustain such a drastic intervention remains to be seen. Pandora Papers Show the Rich Will Always Find a Way: So much money now moves through the world’s offshore financial centers that such paper transactions now account for a greater flow of capital than any country receives from genuine foreign investments. Far from taking a larger share, most developed nations have coped with the leakage of taxable profits over the past decade by cutting their own corporate tax rates — a tacit admission that enforcement has failed. Ultimately, the problem lies with the unrestrained global capital flows since the decline of the Bretton Woods system in the 1970s.  Don’t Blame Climate Activists for the Global Energy Crisis: From the way some analysts have been talking, you’d think that energy markets obeyed some version of the butterfly effect, where Larry Fink needs only to whisper “ESG” and natural gas and coal markets will explode 21 months into the future. What we’re really seeing, though, are the more mundane dislocations of an economy roaring back to life. The world is facing an energy deficit, to be sure — but the technology that will benefit is the one that can fill it most cheaply. In most cases, that is now renewable power. Don’t blame rhetoric for the current travails of the fossil fuel industry. Blame economics.