This article is about economic issues beyond the financial market. For the series of financial market events, starting in July 2007, which suggested a weakening in the world economies, see Financial crisis of 2007-2008. For details on the stock market crashes and bank bailouts of late 2008, see Global financial crisis of 2008.
In 2008, a global economic crisis was suggested by several important indicators of economic downturn worldwide. These included high oil prices, which led to both high food prices (due to a dependence of food production on petroleum, as well as using food crop products such as ethanol and biodiesel as an alternative to petroleum) and global inflation; a substantial credit crisis leading to the bankruptcy of large and well established investment banks as well as commercial banks in various nations around the world; increased unemployment; and the possibility of a global recession.
Inflation
In February 2008, Reuters reported that global inflation was at historic levels, and that domestic inflation was at 10-20 year highs for many nations."Excess money supply around the globe, monetary easing by the Fed to tame financial crisis, growth surge supported by easy monetary policy in Asia, speculation in commodities, agricultural failure, rising cost of imports from China and rising demand of food and commodities in the fast growing emerging markets," have been named as possible reasons for the inflation.
In mid-2008, IMF data indicated that inflation was highest in the oil-exporting countries, largely due to the unsterilized growth of foreign exchange reserves, the term “unsterilized” referring to a lack of monetary policy operations that could offset such a foreign exchange intervention in order to maintain a country´s monetary policy target. However, inflation was also growing in countries classified by the IMF as "non-oil-exporting LDCs" (Least Developed Countries) and "Developing Asia", on account of the rise in oil and food prices.
Inflation was also increasing in the developed countries, but remained low compared to the developing world.
Monday, November 17, 2008
Global warming
Mean surface temperature anomalies during the period 1995 to 2004 with respect to the average temperatures from 1940 to 1980Global warming is the increase in the average measured temperature of the Earth's near-surface air and oceans since the mid-20th century, and its projected continuation.
Global surface temperature increased 0.74 ± 0.18 °C (1.33 ± 0.32 °F) during the 100 years ending in 2005.The Intergovernmental Panel on Climate Change (IPCC) concludes that most of the increase since the mid-twentieth century is "very likely" due to the increase in anthropogenic greenhouse gas concentrations.Natural phenomena such as solar variation combined with volcanoes probably had a small warming effect from pre-industrial times to 1950 and a small cooling effect from 1950 onward. These basic conclusions have been endorsed by at least 30 scientific societies and academies of science, including all of the national academies of science of the major industrialized countries. While individual scientists have voiced disagreement with these findings,[11] the overwhelming majority of scientists working on climate change agree with the IPCC's main conclusions.
Climate model projections summarized by the IPCC indicate that average global surface temperature will likely rise a further 1.1 to 6.4 °C (2.0 to 11.5 °F) during the twenty-first century. This range of values results from the use of differing scenarios of future greenhouse gas emissions as well as models with differing climate sensitivity. Although most studies focus on the period up to 2100, warming and sea level rise are expected to continue for more than a thousand years even if greenhouse gas levels are stabilized. The delay in reaching equilibrium is a result of the large heat capacity of the oceans.
Increasing global temperature is expected to cause sea levels to rise, an increase in the intensity of extreme weather events, and significant changes to the amount and pattern of precipitation, likely including an expanse of the subtropical desert regions. Other expected effects of global warming include changes in agricultural yields, modifications of trade routes, glacier retreat, mass species extinctions and increases in the ranges of disease vectors.
Remaining scientific uncertainties include the amount of warming expected in the future, and how warming and related changes will vary from region to region around the globe. Most national governments have signed and ratified the Kyoto Protocol aimed at reducing greenhouse gas emissions, but there is ongoing political and public debate worldwide regarding what, if any, action should be taken to reduce or reverse future warming or to adapt to its expected consequences.
Greenhouse effect
Main articles: Greenhouse gas and Greenhouse effect
The detailed causes of the recent warming remain an active field of research. The scientific consensus is that the increase in atmospheric greenhouse gases due to human activity caused most of the warming observed since the start of the industrial era, and the observed warming cannot be satisfactorily explained by natural causes alone. This attribution is clearest for the most recent 50 years, for which the most detailed data are available.
The greenhouse effect was discovered by Joseph Fourier in 1824 and was first investigated quantitatively by Svante Arrhenius in 1896. It is the process by which absorption and emission of infrared radiation by atmospheric gases warm a planet's lower atmosphere and surface. Existence of the greenhouse effect as such is not disputed. The question is instead how the strength of the greenhouse effect changes when human activity increases the atmospheric concentrations of some greenhouse gases.
Recent increases in atmospheric carbon dioxide (CO2). The monthly CO2 measurements display small seasonal oscillations in an overall yearly uptrend; each year's maximum is reached during the Northern Hemisphere's late spring, and declines during the Northern Hemisphere growing season as plants remove some CO2 from the atmosphere.Naturally occurring greenhouse gases have a mean warming effect of about 33 °C (59 °F), without which Earth would be uninhabitable. On Earth, the major greenhouse gases are water vapor, which causes about 36–70 percent of the greenhouse effect (not including clouds); carbon dioxide (CO2), which causes 9–26 percent; methane (CH4), which causes 4–9 percent; and ozone, which causes 3–7 percent.
Human activity since the industrial revolution has increased the concentration of various greenhouse gases, leading to increased radiative forcing from CO2, methane, tropospheric ozone, CFCs and nitrous oxide. The atmospheric concentrations of CO2 and methane have increased by 31% and 149% respectively since the beginning of the industrial revolution in the mid-1700s. These levels are considerably higher than at any time during the last 650,000 years, the period for which reliable data has been extracted from ice cores. From less direct geological evidence it is believed that CO2 values this high were last attained 20 million years ago.[26] Fossil fuel burning has produced approximately three-quarters of the increase in CO2 from human activity over the past 20 years. Most of the rest is due to land-use change, in particular deforestation.
CO2 concentrations are expected to rise due to ongoing burning of fossil fuels and land-use change. The rate of rise will depend on uncertain economic, sociological, technological, and natural developments. The IPCC Special Report on Emissions Scenarios gives a wide range of future CO2 scenarios, ranging from 541 to 970 ppm by the year 2100.Fossil fuel reserves are sufficient to reach this level and continue emissions past 2100, if coal, tar sands or methane clathrates are extensively used.
Global surface temperature increased 0.74 ± 0.18 °C (1.33 ± 0.32 °F) during the 100 years ending in 2005.The Intergovernmental Panel on Climate Change (IPCC) concludes that most of the increase since the mid-twentieth century is "very likely" due to the increase in anthropogenic greenhouse gas concentrations.Natural phenomena such as solar variation combined with volcanoes probably had a small warming effect from pre-industrial times to 1950 and a small cooling effect from 1950 onward. These basic conclusions have been endorsed by at least 30 scientific societies and academies of science, including all of the national academies of science of the major industrialized countries. While individual scientists have voiced disagreement with these findings,[11] the overwhelming majority of scientists working on climate change agree with the IPCC's main conclusions.
Climate model projections summarized by the IPCC indicate that average global surface temperature will likely rise a further 1.1 to 6.4 °C (2.0 to 11.5 °F) during the twenty-first century. This range of values results from the use of differing scenarios of future greenhouse gas emissions as well as models with differing climate sensitivity. Although most studies focus on the period up to 2100, warming and sea level rise are expected to continue for more than a thousand years even if greenhouse gas levels are stabilized. The delay in reaching equilibrium is a result of the large heat capacity of the oceans.
Increasing global temperature is expected to cause sea levels to rise, an increase in the intensity of extreme weather events, and significant changes to the amount and pattern of precipitation, likely including an expanse of the subtropical desert regions. Other expected effects of global warming include changes in agricultural yields, modifications of trade routes, glacier retreat, mass species extinctions and increases in the ranges of disease vectors.
Remaining scientific uncertainties include the amount of warming expected in the future, and how warming and related changes will vary from region to region around the globe. Most national governments have signed and ratified the Kyoto Protocol aimed at reducing greenhouse gas emissions, but there is ongoing political and public debate worldwide regarding what, if any, action should be taken to reduce or reverse future warming or to adapt to its expected consequences.
Greenhouse effect
Main articles: Greenhouse gas and Greenhouse effect
The detailed causes of the recent warming remain an active field of research. The scientific consensus is that the increase in atmospheric greenhouse gases due to human activity caused most of the warming observed since the start of the industrial era, and the observed warming cannot be satisfactorily explained by natural causes alone. This attribution is clearest for the most recent 50 years, for which the most detailed data are available.
The greenhouse effect was discovered by Joseph Fourier in 1824 and was first investigated quantitatively by Svante Arrhenius in 1896. It is the process by which absorption and emission of infrared radiation by atmospheric gases warm a planet's lower atmosphere and surface. Existence of the greenhouse effect as such is not disputed. The question is instead how the strength of the greenhouse effect changes when human activity increases the atmospheric concentrations of some greenhouse gases.
Recent increases in atmospheric carbon dioxide (CO2). The monthly CO2 measurements display small seasonal oscillations in an overall yearly uptrend; each year's maximum is reached during the Northern Hemisphere's late spring, and declines during the Northern Hemisphere growing season as plants remove some CO2 from the atmosphere.Naturally occurring greenhouse gases have a mean warming effect of about 33 °C (59 °F), without which Earth would be uninhabitable. On Earth, the major greenhouse gases are water vapor, which causes about 36–70 percent of the greenhouse effect (not including clouds); carbon dioxide (CO2), which causes 9–26 percent; methane (CH4), which causes 4–9 percent; and ozone, which causes 3–7 percent.
Human activity since the industrial revolution has increased the concentration of various greenhouse gases, leading to increased radiative forcing from CO2, methane, tropospheric ozone, CFCs and nitrous oxide. The atmospheric concentrations of CO2 and methane have increased by 31% and 149% respectively since the beginning of the industrial revolution in the mid-1700s. These levels are considerably higher than at any time during the last 650,000 years, the period for which reliable data has been extracted from ice cores. From less direct geological evidence it is believed that CO2 values this high were last attained 20 million years ago.[26] Fossil fuel burning has produced approximately three-quarters of the increase in CO2 from human activity over the past 20 years. Most of the rest is due to land-use change, in particular deforestation.
CO2 concentrations are expected to rise due to ongoing burning of fossil fuels and land-use change. The rate of rise will depend on uncertain economic, sociological, technological, and natural developments. The IPCC Special Report on Emissions Scenarios gives a wide range of future CO2 scenarios, ranging from 541 to 970 ppm by the year 2100.Fossil fuel reserves are sufficient to reach this level and continue emissions past 2100, if coal, tar sands or methane clathrates are extensively used.
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