Newsletter: Bidenomics, reducing US internal divisions while sustaining international economic leadership

Newsletter: Bidenomics, reducing US internal divisions while sustaining international economic leadership

Tuesday, 10 November 2020

Funcas Europe

Good morning Future is blue readers,

This week we are covering the US elections. I've published an article with Juan Moscoso del Prado, Director of Global Affairs at Deusto Business School, where we argue that Biden’s biggest challenge will be to reduce the US internal divisions while keeping the US international economic leadership. I've included some of our main points below.

We’re also featuring an article by Alejandro Núñez Jiménez, Post-doc on Hydrogen at HKS Belfer Center in Harvard Kennedy School, and Nicola de Blasio, Senior Fellow at the HKS Belfer Center in Harvard Kennedy School, on the key role that hydrogen can play in the context of Europe’s green deal. Will Europe unite behind renewable hydrogen or fall in the traps of the past? More on that further down.

As usual, see at the very end what we are reading these days.

What to expect from Bidenomics?

Today I’m publishing an article with Juan Moscoso, Bidenomics, how to reduce US internal divisions while sustaining international economic leadership?

A republican senate majority will complicate Biden’s plans to recover from the pandemic crisis and solve the profound economic and social imbalances affecting the US.

The chaotic management of the health crisis is threatening the advances of the economy. New infections have multiplied, and they may collapse hospitals in some States, which would trigger new restrictions affecting economic activities.

Internationally, Biden’s presidency will be marked by a relative continuity in reaffirming the US role as the world’s biggest economy and the ongoing efforts to counterbalance the Chinese rise.

The EU will welcome Biden’s return to multilateralism, in particular when the US reenters to the Paris agreement. Regarding trade, however, the challenges to relaunch the Atlantic relationship will be substantial. Differences around data privacy, a digital tax, and States’ aid for the aeronautic sector will be difficult to overcome.

We expect the new administration to focus more on internal questions, such as controlling the sanitary crisis and putting together a stimulus package to relaunch the economy. 

Considering the uncertainties for the next few months, the EU needs to focus on building a stable economic space and try to bridge the gap in the Atlantic. On top of this, the EU should continue its efforts to gain influence on the world’s technological race and, in particular, keep developing its “strategic autonomy”.

Access here a full version of this article (in Spanish).

Will renewable hydrogen help unite Europe?

After enduring months of a global health pandemic that has unleashed a profound economic crisis, Europe should not lose the opportunity to leverage its recovery plans to kick-start a clean hydrogen society.

But this transformational effort will require close coordination between policy, technology, capital, and society - to avoid falling into the traps and inefficiencies of the past. Only by working together, can the European Union become a global leader in clean hydrogen innovation, and simultaneously contribute to the EU’s climate and energy security goals, a stronger economy, and a more integrated union.

While hydrogen has been a staple in the energy and chemical industries for decades, renewable hydrogen is enjoying unprecedented political and business momentum as a versatile and sustainable energy carrier that could be the missing piece in the carbon-free energy puzzle.

Renewables are widely perceived as an opportunity to break the hegemony of fossil fuels-rich states and to “democratize” the energy landscape. Yet the role countries are likely to assume in future renewable hydrogen systems will be based not only on their resource endowment but also on their policy choices.

If economic cooperation and energy security were to be prioritized, the EU could meet most of its hydrogen demand internally. Countries like Spain and France have the potential to develop their renewable hydrogen industries beyond domestic production needs and thus to export surpluses. While these nations lack the renewable resources potential to become major global export champions, they could still thrive as regional exporters.

In an increasingly competitive world, renewable hydrogen offers a unique opportunity.   Making it a significant part of the EU future energy mix will not be easy; requiring appropriate policies and market structures aimed at spurring innovation along the value chains; scaling technologies while lowering costs; and deploying enabling infrastructure at scale. Success is possible but will require a truly coordinated effort.

Will Europe unite behind renewable hydrogen or fall in the traps of the past?

A full version of this article by Alejandro Núñez Jiménez and Nicola de Blasio can be accessed here.

What we are reading

Joe Biden can get plenty done, even if Congress is divided
There is low-hanging fruit to be plucked by using executive powers and improving relations with Europe, argues Rana Foroohar.

2021 can be a climate breakthrough, but Biden and Europe need to talk
The new US administration and the EU have a real opportunity, through a “global net zero coalition”, to remove some of the key bottlenecks in the global path to climate neutrality.

What Biden means for Europe
On key issues from climate change to China, read how the next US president will revamp transatlantic ties.

Welcome to Bidenworld
The scramble for plum jobs in a new White House is already under way.

Have a nice week!

Raymond Torres
Funcas Europe Director


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