We need to do more to cut carbon emissions.
That’s according to the Australian Financial Review (AFR).
We’re now even worse than Italy…whatever that means. The AFR writes:
‘…the serious takeout’s from the meeting [climate change meeting] in the city of Katowice [Poland] are that pressure is building on Australia and other laggard countries to adopt carbon policies that can demonstrably achieve their Paris targets and the much more ambitious targets that would be required to limit global temperature increases to 1.5 degrees Celsius.’
The paper pointed to our manufacturing industry (yes, we still have one).
The pressure is building on Australia
When we make stuff we use a lot more energy than others. In fact, we’re lagging all other developed countries in terms of efficiency.
We have no way of meeting our Paris agreement targets either, the paper says.
And this is our great source of shame. Delegates at the climate change meeting were shaking their heads at us.
Tsk-tsk Australia! You’ve got to do better.
OK, so what should we do?
How do we want to punish an inefficient industry (manufacturing) that’s losing cheap labour to Asia anyway?
Should we just tax people and those businesses?
Are we just hoping that the people of Australia don’t turn into the people of France?
Why the European Union is destined to fail
This is something I don’t understand. And it’s not just about climate change.
For some reason, people want governments to do more. They want policy makers to intervene. If government pokes its head into more problems, maybe they’ll have the solution…
But has that worked ever?
Is there a point in history where government had all the solutions? Is there a time when we gave governments more power over people and it turned out to be a good thing?
When listening to the mainstream, it’s almost as if they’ve forgotten the purpose of governments.
Officials and politicians, their sole role is to serve.
Not to control.
The only power governments should have is to protect our rights.
They have a duty to make sure I don’t infringe on your rights and you don’t infringe on mine.
This is the very limited role governments should play.
But that’s not how people want it.
They want politicians to think for them. They want government to make the tough decisions.
But what they come up with are terrible solutions. It’s because politicians, like everyone else, have their own influences and biases too.
French President Emmanuel Macron found out firsthand what happens when governments overstep their role.
The French government, along with many others in Europe, have been doing it for years.
They tax citizens like crazy. They try to have a hand in almost everything. And they make just about everything worse.
It’s why there are riots in France.
It’s why there are riots in Brussels.
A carbon fuel tax was the last straw.
People took to the streets and demanded government to get out of their lives.
Who knows what’s best for the individual? The individual themselves, or a separate third party with their own incentives and biases?
It’s one of the reasons why I think the European Union (EU) is destined to fail.
What affect does Europe’s political turmoil have on the markets?
How can you expect people in Italy to suffer for the benefit of Germans? How can you put limitations on one country and not the other?
Yet this is what the EU does.
And it’s why the UK is getting out.
Not only are the French suffering under Macron, people of Italy are even worse off.
As an EU member, Italy needs to submit budget plans every so often.
According to the EU, these budgets need to be in the best interest of the Union.
They can’t let anyone spend all their money and go broke. If they do, then it will be the EU that has to pick up the pieces.
Right now, the EU doesn’t want Italy to spend any more than they have to.
‘Italy’s 2.3 trillion euro national debt dwarfs that of Greece and the euro zone bailout fund would not be able to cope with the costs of supporting its government in a crisis. Any such crisis could threaten the euro itself, seen by many as the EU’s greatest achievement.’
But spending is exactly what Italy wants to do. One of their policies is to give handouts to the poor in southern Italy.
I doubt it will help the poor much, but this vote baiting policy has momentum. And the EU wants them to cut it out.
It’s why they sent Italy’s budget back to Rome and told them to come up with something better.
‘The European Commission on Tuesday gave Italy three weeks to rewrite it budget draft – or face further consequences.
‘…5Stars leader and Deputy Prime Minister Luis Di Maio immediately posted on his Facebook page: “We won’t give up because if we do, technocrats who are pro-banks and pro-austerity would be back…It’s the first Italian budget the European Commission doesn’t like. It doesn’t surprise me because it’s the first budget that is written in Rome and not in Brussels.”’
If you remember yesterday, I wrote about what I thought could push stocks around in 2019.
This is it. The political disruption going on in Europe could be a defining moment of 2019.
But while it might push stocks prices around (in the short-term), you shouldn’t let it dictate where you invest in the new year.
In fact, you shouldn’t even take notice.
There are a lot of stocks on the ASX that will move up or down because of what’s happening in Europe. But the events in Europe really have no material effect on what these businesses can earn.
And this is what you probably want to focus on in 2019.
You want to look for cheap businesses earning lots of cash. And perhaps even ones that are growing their cash earnings.
Editor, Money Morning
PS: In this just released report, Matt Hibbard shows you his top five dividend picks for 2019. Click here to claim your copy today.