This article titled “Davos 2020: Greta Thunberg blasts climate inaction; Lagarde fears Brexit cliff edge – Day Four as it happened” was written by Graeme Wearden in Davos, for theguardian.com on Friday 24th January 2020 16.37 UTC
Here’s our news story on the clash between Christine Lagarde and Steven Mnuchin at the final WEF session:
WEF is over! We’re clearing out of Davos — I’ll try to post a round-up, or more news, if I can….
If not, thanks very much for reading our coverage from the World Economic Forum.
There are some small signs of progress at least – even if things aren’t moving as fast as needed.
At today’s press conference Isabelle Axelsson said climate activists had been taken more seriously this year than before
“I don’t know how they evaluate what we say, hopefully they listen, but generally I do think they dismiss us because of our age.”
Axelsson added that there is too much media attention on the climate strikers:
“We need the focus to be on the science.”
Noted! In that spirit, here’s a new scientific study warning that the climate emergency will create a lot more weather disasters.
Here are the five climate activists who spoke to reporters in Davos today about the climate emergency.
From left to right, we have Vanessa Nakate, Luisa Neubauer, Greta Thunberg, Isabelle Axelsson and Loukina Tille:
Elsewhere in Davos, former US vice-president Al Gore has hit out at “cheap, destructive, extractive, exploitive business models”.
In a discussion about tackling plastic waste, Gore says that some firms as using “destructive practices that take advantage of the global commons”….
Here’s a clip of Greta Thunberg criticising world and business leaders for their lack of action…. although she expected nothing less.
Updated at 12.07pm GMT
And here’s a video clip of today’s climate activists marching through Davos:
The “Fridays For Future” protests are now taking place outside the World Economic Forum in Davos.
Reminder – if you missed the press conference with Greta Thunberg and fellow activists today you can watch a recording at the top of this blog.
Lagarde and Mnuchin clash over climate emergency
IMF chief Kristalina Georgieva cautions that the measures needed to tackle the climate emergency means that some industries will be less profitable in the future.
Christine Lagarde says the key to mobilising action is to remember the old advertising maxim:
There are three things that make people move — sex, fear and greed.
She’s not going to address the first (this is a family liveblog, Christine), but the other two can drive action.
Lagarde talks about need to price the cost of transitioning to a low carbon economy.
If we do that, and we have pressure — voluntary or no so -voluntary – we can get companies to move faster, she says.
Mnuchin, though, disputes whether green measures can really be priced.
We don’t know how to price the risk of climate change, so we’re over-estimating the cost, he claims.
If you want to introduce a carbon tax, then “go ahead” adds the Treasury secretary, adding that a carbon tax is “a tax on hard-working people”.
Updated at 11.53am GMT
The panel moves onto climate… and Steve Mnuchin says it is only one of several important issues.
He cites health (topical, given the coronavirus crisis) and the Middle East — Iran can’t be allowed to get a nuclear weapon, he insists.
Mnuchin says Donald Trump does care about clean air and water. He left the Paris Agreement because he felt it wasn’t fair.
There’s way too many people in the developing world who do not have access to electricity.
As much as we want to talk about the environmental issues …we need to work very hard to create an environment for these people where they have better lives.
German finance minister on Brexit
Germany’s finance minister, Olaf Scholz, tells Davos that his country won’t take an economic hit from Brexit.
It will be harder for the UK, though, Scholz warns — warning that the City of London will be less important after Brexit.
It will still be important, but the situation will be different, he says.
Speaking on today’s panel on the global economic outlook, Scholz warns that a country simply cannot have all the advantages of being a member of the EU while also enjoying the advantage of being outside as well.
I think we will find solutions, Scholz continues, but he adds that there might not be a “special, competitive advantage of being outside” the EU.
Updated at 11.31am GMT
UK ‘top of the list’ for US trade deal
On trade, Steve Mnuchin says the UK will be at the top of the list for a free trade deal, after Brexit.
Asked about the United States’ trade deal plan this year, the Treasury Secretary:
We’ve already started the conversions with the EU. We look forward to making progress with them.
On the UK, the president has been clear going back to the election that the UK is our number one ally and will be at the top of the list of trade agreements.
We look forward to getting that done this year.
We’re encouraged. We know they also have to get a deal with the EU.
Lagarde: Brexit cliff edge risk
ECB chief Christine Lagarde fears that Europe faces a Brexit “cliff edge” at the end of this year.
She tells Davos that there some positive signs surrounding the global economy – with employment very low, and trade tensions easing.
But the negotiations over Britain’s future relationship with the EU is a concern.
Brexit is a little bit less uncertain, but we still have that possible cliff edge in December of 2020.
We don’t’ know exactly what the trade relationship will be.
And it’s a big partner for the euro area, so that’s certainly a question mark.
Earlier this week, UK chancellor Sajid Javid told the World Economic Forum that a comprehensive deal can be reached by December.
But it’s going to be tough. Yesterday, Dutch prime minister Mark Rutte told Ed Conway of Sky News it was a 50:50 chance…..
Updated at 11.54am GMT
US Treasury secretary Steven Mnuchin, who took that nasty potshot at Thunberg yesterday, has told Davos that US government spending needs to be reined in.
We look at a very robust economic outcome through 2020, Mnuchin predicted.
He’s sitting alongside Zhu Min, Olaf Scholz, Kristalina Georgieva, Haruhiko Kuroda, and Christine Lagarde here at WEF.
Mnuchin adds that “fiscal policy has worked”, and predicts that Donald Trump’s tax cuts will pay for themselves over 10 years (some economists disagree about this, but we’ll see).
But looking ahead, Mnuchin says “we need to slow down the rate of growth of government spending, and lower it as a ratio basis.”
That might worry Americans who depend on welfare, for example.
IMF chief: growth is still sluggish
Back in the Davos congress hall, IMF chief Kristalina Georgieva is talking about the global economy.
She has a positive-ish message, saying:
We are in a better place in January 2020 than we were in October 2019.
There are three reasons:
- Trade tensions are receding – the signing of the US-China trade deal has raised confidence
- Central banks have ‘served the world well’; 49 central banks have cut interest rates 71 times
- The slump in manufacturing and industrial production seems to be bottoming out
That’s why the IMF has raised its growth forecast for 2020 to 3.3% from 3.1%. But that is still “sluggish”, Georgieva cautions.
The IM wants to see more aggressive fiscal policy, and structural reforms to create dynamism.
Greta Thunberg, and her fellow activists are now going to march down the icy pavements of Davos, to conduct their regular School Strike for the climate emergency.
That will allow them to lobby Davos delegates as they leave WEF and head for the railway station (although the global elite typically travel by chauffeur-driven cars).
Updated at 2.01pm GMT
Luisa Neubauer says there is “less climate denial, but more climate action denial.” (hardly progress!)
There is no point waiting for the crisis to come up before acting – the crisis is here now.
Neubauer reiterates that she met with Siemens CEO Joe Kaiser at Davos this week, to pressure him to ditch the Adani coalmine contract (to provide rail signalling technology).
We had a very good discussion here at Davos, so the dialogue is still going on.
She then urges all investors, and all companies responsible for making fossil fuel projects, to heed the crisis.
Our message to Joe Kaiser, and other business leaders, is that if you add up all the contracts that have been signed today on fossil fuel projects, we will be far beyond keeping temperature rises below two degrees C, she says.
Some, or all, of those projects need to be cancelled if we are to achieve the Paris Agreement goals.
This is not a radical demand, this is a rational demand.
Updated at 1.10pm GMT
Vanessa Nakate says she believes the leaders at Davos have heard the message from climate activists – but they’re choosing to ignore it.
Nakate also explains how social media has helped the climate activist movement — by letting her get her message out across Uganda.
Climate activists to protest at Siemens AGM
Climate activists will continue to lobby Siemens over its involvement in the Adani coalmine in Australia, says Luisa Neubauer.
Neubauer says activists have met with Siemens CEO Joe Kaiser, and explained why the mine will threaten any hopes of keeping global warming below 1.5 degrees.
We plan to speak at the Siemens AGM in February, Neubauer says.
Kaiser has written about the struggle he had about whether to pull out of the project, before deciding not to (a good example of the problem)
Q: How do you move the Davos community on, to a low-carbon future?
Isabelle Axelsson says it shouldn’t be up to the climate activists to find the solutions.
Politicians need to listen to the science, get a plan down on paper, and implement it, she says.
Q: The climate emergency isn’t a big issue to India – what’s your message to them, Greta?
My message to India is the same as to every other country, she replies.
We need to listen to the science, and we need to treat this crisis as the crisis it is.
Thunberg: Trump and Mnuchin don’t affect me
Q: How did it feel to be publicly insulted by the US president, and the US treasury secretary yesterday?
Greta Thunberg replies that it had “of course, no effect”.
Climate activists are used to such comments, she adds:
We are being criticised like that all the time. If we cared about that, we wouldn’t be able to do what we do.
Updated at 12.12pm GMT
Thunberg: Our demands have been completely ignored
Greta Thunberg has said that the World Economic Forum has completely ignored the climate movement’s demands (on fossil fuel divestment) this week.
As long as we do not treat this crisis as a crisis, and as long as the facts are ignored, we will not solve this crisis,Thunberg says.
We need to understand the urgency of this situation, she insists, adding:
Our demands have been completely ignored, and we expected nothing less.
As long as the science is being ignored, and as long as the facts are not being taken into account, leaders can continue to ignore the situation, Thunberg continues.
Youth climate activists speak
Back in Davos, activist Isabelle Axelsson from Sweden is speaking about the climate emergency.
We cannot rely on technologies that do not exist, she says (ie, world and business leaders can’t assume that something will turn up to tackle rising emissions).
Vanessa Nakate from Uganda says we need to look at climate justice – because we all have a story to tell about how the impact of the changing climate is affecting communities.
Nakate has been camping with other activists in tents in the Arctic base camp in Davos this week – this shows we have left our comfort zones, she explains.
Updated at 10.56am GMT
Some instant reaction to the PMIs:
UK economy returns to growth
Newsflash: The UK economy has returned to growth this month.
That’s a sign that confidence is rising following December’s election, making an interest rate cut next week less likely.
Markit’s flash PMI, which tracks activity across the economy, has risen to 52.4, which shows growth. That’s up from 49.3 in December, which signalled a contraction.
Meanwhile in the markets, excitement is building ahead of the UK Purchasing Managers’ survey of the British economy this month….
Greta Thunberg is giving a press conference shortly in Davos, along with fellow youth climate activists from the Fridays For Future campaign.
She’s joined by Vanessa Nakate from Uganda, Loukina Tille from Switzerland, Luisa Neubauer from Germany and Isabelle Axelsson from Sweden.
The head of the European Central Bank, Christine Lagarde, has a word of warning for the markets this morning:
She’s told Bloomberg that investors shouldn’t assume that current monetary policy is locked in for the foreseeable future just because officials are focused on reviewing their strategy:
She told Bloomberg TV:
“To those who think it’s on autopilot, that’s ridiculous…. Let’s look at the facts. Let’s look at how the economy evolves”
Introduction: Davos wraps up; UK PMIs in focus
Good morning from Davos, where the final day of the World Economic Forum is getting underway.
The annual shindig of the global elite, and some of their sternest critics, is wrapping up at lunchtime today.
Out on the streets, some of the corporations who took over Davos’s promenade are packing up, taking down their glossy posters.
But it’s not back to normal yet. Inside the Congress Hall, we’ll hear an update on the state of the world economy.
On the panel: Treasury secretary Steven Mnuchin, German finance minister Olaf Scholz, IMF chief Kristalina Georgieva, Bank of Japan chief Haruhiko Kuroda and ECB chief Christine Lagarde.
And outside the hall, Greta Thunberg (who Mnuchin thinks should go and learn economics) will be holding a school strike to focus attention on the climate emergency.
We’ll also get a new healthcheck on the UK economy today, when Markit’s survey of purchasing managers’ is released.
It will measure how businesses are faring this month, and whether there’s really a Boris Bounce taking place after the election. If not, then a weak reading raises the chances of a UK rate cut next week.
Ipek Ozkardeskaya of Swissquote Bank says:
Today’s data will give a first indication about the health of the British economy having found a certain political stability amid Johnson’s solid victory in December and a way to move out of the European Union avoiding the much-feared no-deal scenario.
A strong PMI read could tune down the rate cut expectations that spiked from nearly zero to 60% for the Bank of England’s January meeting. Any disappointment, on the other hand, should further revive the BoE doves and pave the way for the pound to slide below .30 before next week’s monetary policy meeting.
- 10.30am Davos / 9.30am GMT: UK flash PMIs
- 10.30am Davos / 9.30am GMT: Session on ending single-use plastic
- 11am Davos / 10am GMT: Greta Thunberg leads a school strike for the climate emergency
- 11.30am Davos / 10.30am GMT: Session on the world economic outlook with Lagarde, Mnuchin, Georgieva, Kuroda and Scholz.
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