The world needs more energy to improve global living standards but with lower emissions, Ajay Chhibber, Chief Economic Advisor, Federation of Indian Chambers of Commerce and Industry (FICCI) said on Monday.
Speaking at the 20th International Energy Arena held by Strategic Technical Economic Research Center (STEAM) at Conrad Bosphorus Hotel in Istanbul, Chhibber said that there are 7 major risks in global energy sector, including global warming and climate change, rapid change in how energy is produced and consumed, cyber threats, regulation and public policy such as plastics ban,tariffs and trade tensions, talent retention and catastrophic events.
Indian economist explained that meanwhile the world faces with problems which are called as 'black-swan events' including hard Brexit, European debt crisis, India/Pakistan conflict, Korean peninsula war, increasing Iran-U.S. tension, expanding Saudi-Yemen conflict and Fukushima type nuclear disasters.
A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences.
'Furthermore the global risks interconnect with each other. For example if Africa's population increase a lot, it will increase the immigration from there,' Chhibber said, adding that there are interactions among global risks which create huge uncertainty for world.
- Another Great Depression ?
Chhibber said that global trade is growing slower than global gross domestic product (GDP), creating a similarity between today's world economy and its situation a century ago.
Causes of the Great Depression is eerily familiar with today, according to the Indian economist.
'Very loose monetary policy was leading to stock market boom and bust. Protective trade policies were performed after Smoot-Hawley tariff act. Inequality was rising and it was leading to decline in purchasing power,' he said.
'There were natural disasters and their ecological and economical damages such as dust bowl in 1930's. There were subsequent anti-business legislations such as restrictive labor laws and high taxes.'
By Muhsin Baris Tiryakioglu