Page - 4 - in options, Volume winter 2020

News in brief According to the authors of a recent study, there was an 85% probability that after the great economic crisis of 2008, the next recession would happen before the start of 2020, in other words, before the onset of the coronavirus crisis. A recession, which is a significant decline in economic activity, can cause people to lose their jobs, companies to go bankrupt, and countries’ entire economies to land in financial turmoil. It can also lead to substantial losses in GDP, lower employment rates, and reduced investment spending. Nevertheless, each economic crisis varies in its duration and intensity. By using a novel statistical model and applying it to historical recessions in US and European markets, the authors were able to investigate economic recession patterns. “Recessions do not feature any regular periodicity, and this statistical study tried to understand how corrective actions like market adjustments, stimulus packages, regulations of the financial sector, and trade reforms affect the arrival times of new recessions. Our model accounts for the combined effect of these adjustment processes, as well as for the length and depth of previous recessions,” explains IIASA researcher Matthias Wildemeersch. Future recessions are inevitable, yet newly developed statistical tools such as the model developed as part of the study, can provide insights on the likelihood of the next recession, and help policymakers prepare the corrective measures that make the economy more resilient. Can the onset of recessions be predicted? Global emissions of methane have hit a new record high, according to an international team of more than 80 scientists. With the support of the Global Carbon Project, the team has found that in 2017, methane concentrations increased by around 9% (or approximately 50 million tons), above the 2000-2006 average. The main culprit of this increase is human-caused emissions, specifically from the agriculture and waste sector, and the fossil fuel sector, the study shows. This is manifested in emissions from livestock production, rice cultivation, and the extraction of oil, gas, and coal. Methane, a potent greenhouse gas, is 28 times more powerful per kilogram than CO₂ over 100 years. Its release poses the potential for critical tipping points that can accelerate climate disruptions. The comprehensive report released by the Global Carbon Project employed a dual “bottom-up” and “top-down” approach to estimate a global methane budget. “Identifying the sources bottom-up and verifying these top-down through atmospheric measurements is an important step towards finding effective methane mitigation strategies,” explains study coauthor Lena Höglund-Isaksson, a researcher in the IIASA Air Quality and Greenhouse Gases Program. If we want to maintain Earth’s temperature well- below 2°C and achieve the objectives of the Paris Agreement, we must limit both global CO₂ and methane emissions, researchers emphasize. Hence, this study paves the road for future monitoring of atmospheric methane concentrations while also pinpointing its sources, thereby allowing for the identification of abatement possibilities. Global methane spike threatens to disrupt climate mitigation goals Lena Höglund-Isaksson: hoglund@iiasa.ac.at Further info: pure.iiasa.ac.at/16569 By Shorouk Elkobros Further info: pure.iiasa.ac.at/16461 Matthias Wildemeersch: wildemee@iiasa.ac.at By Shorouk Elkobros 4 Options www.iiasa.ac.atWinter 2020