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    Fragile Global Economy Faces New Crisis in Israel-Gaza War

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    A war in the Middle East could complicate efforts to contain inflation at a time when world output is “limping along.”The International Monetary Fund said on Tuesday that the pace of the global economic recovery is slowing, a warning that came as a new war in the Middle East threatened to upend a world economy already reeling from several years of overlapping crises.The eruption of fighting between Israel and Hamas over the weekend, which could sow disruption across the region, reflects how challenging it has become to shield economies from increasingly frequent and unpredictable global shocks. The conflict has cast a cloud over a gathering of top economic policymakers in Morocco for the annual meetings of the I.M.F. and the World Bank.Officials who planned to grapple with the lingering economic effects of the pandemic and Russia’s war in Ukraine now face a new crisis.“Economies are at a delicate state,” Ajay Banga, the World Bank president, said in an interview on the sidelines of the annual meetings. “Having war is really not helpful for central banks who are finally trying to find their way to a soft landing,” he said. Mr. Banga was referring to efforts by policymakers in the West to try and cool rapid inflation without triggering a recession.Mr. Banga said that so far, the impact of the Middle East attacks on the world’s economy is more limited than the war in Ukraine. That conflict initially sent oil and food prices soaring, roiling global markets given Russia’s role as a top energy producer and Ukraine’s status as a major exporter of grain and fertilizer.“But if this were to spread in any way then it becomes dangerous,” Mr. Banga added, saying such a development would result in “a crisis of unimaginable proportion.”Oil markets are already jittery. Lucrezia Reichlin, a professor at the London Business School and a former director general of research at the European Central Bank, said, “the main question is what’s going to happen to energy prices.”Ms. Reichlin is concerned that another spike in oil prices would pressure the Federal Reserve and other central banks to further push up interest rates, which she said have risen too far too fast.As far as energy prices, Ms. Reichlin said, “we have two fronts, Russia and now the Middle East.”Smoke rising from bombings of Gaza City and its northern borders by Israeli planes.Samar Abu Elouf for The New York Times Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, said it’s too early to assess whether the recent jump in oil prices would be sustained. If they were, he said, research shows that a 10 percent increase in oil prices would weigh down the global economy, reducing output by 0.15 percent and increasing inflation by 0.4 percent next year. In its latest World Economic Outlook, the I.M.F. underscored the fragility of the recovery. It maintained its global growth outlook for this year at 3 percent and slightly lowered its forecast for 2024 to 2.9 percent. Although the I.M.F. upgraded its projection for output in the United States for this year, it downgraded the euro area and China while warning that distress in that nation’s real estate sector is worsening.“We see a global economy that is limping along, and it’s not quite sprinting yet,” Mr. Gourinchas said. In the medium term, “the picture is darker,” he added, citing a series of risks including the likelihood of more large natural disasters caused by climate change.Europe’s economy, in particular, is caught in the middle of growing global tensions. Since Russia invaded Ukraine in February 2022, European governments have frantically scrambled to free themselves from an over-dependence on Russian natural gas.They have largely succeeded by turning, in part, to suppliers in the Middle East.Over the weekend, the European Union swiftly expressed solidarity with Israel and condemned the surprise attack from Hamas, which controls Gaza.Some oil suppliers may take a different view. Algeria, for example, which has increased its exports of natural gas to Italy, criticized Israel for responding with airstrikes on Gaza.Even before the weekend’s events, the energy transition had taken a toll on European economies. In the 20 countries that use the euro, the Fund predicts that growth will slow to just 0.7 percent this year from 3.3 percent in 2022. Germany, Europe’s largest economy, is expected to contract by 0.5 percent.High interest rates, persistent inflation and the aftershocks of spiraling energy prices are also expected to slow growth in Britain to 0.5 percent this year from 4.1 percent in 2022.Sub-Saharan Africa is also caught in the slowdown. Growth is projected to shrink this year by 3.3 percent, although next year’s outlook is brighter, when growth is forecast to be 4 percent.Staggering debt looms over many of these nations. The average debt now amounts to 60 percent of the region’s total output — double what it was a decade ago. Higher interest rates have contributed to soaring repayment costs.This next-generation of sovereign debt crises is playing out in a world that is coming to terms with a reappraisal of global supply chains in addition to growing geopolitical rivalries. Added to the complexities are estimates that within the next decade, trillions of dollars in new financing will be needed to mitigate devastating climate change in developing countries.One of the biggest questions facing policymakers is what impact China’s sluggish economy will have on the rest of the world. The I.M.F. has lowered its growth outlook for China twice this year and said on Tuesday that consumer confidence there is “subdued” and that industrial production is weakening. It warned that countries that are part of the Asian industrial supply chain could be exposed to this loss of momentum.In an interview on her flight to the meetings, Treasury Secretary Janet L. Yellen said that she believes China has the tools to address a “complex set of economic challenges” and that she does not expect its slowdown to weigh on the U.S. economy.“I think they face significant challenges that they have to address,” Ms. Yellen said. “I haven’t seen and don’t expect a spillover onto us.” More

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    In Provence, Winemakers Confront Climate Change

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    “You can taste the climate change.”Frédéric Chaudière, a third-generation winemaker in the French village of Mormoiron, took a sip of white wine and set down his glass.The tastes of centuries-old varieties are being altered by spiking temperatures, scant rainfall, snap frosts and unpredictable bouts of extreme weather. The hellish summer was the latest reminder of how urgently the $333 billion global wine industry is being forced to adapt. Temperature records were set in Europe, the United States, China, North Africa and the Middle East as hail, drought, wildfires and floods on a biblical scale inflicted damage.Grape vines are some of the most weather-sensitive crops, and growers from Australia to Argentina have been struggling to cope. The imperative is particularly great in Europe, which is home to five of the world’s top 10 wine-producing countries and includes 45 percent of the planet’s wine-growing areas.Chêne Bleu is one of the highest vineyards in Provence, France. Winegrowers have been increasingly searching for higher altitudes for cooler temperatures. For many vineyards, new weather patterns are resulting in smaller grapes that produce sweeter wines with a higher alcohol content.A tractor driver loading grapes picked by harvesters. Chêne Bleu is one of the region’s leaders in developing adaptations for cultivation and processing that are regenerative and organic.Mr. Chaudière is the president of an association of wine producers in Ventoux. His winery, Château Pesquié, is in the Rhône Valley, where the impact of climate change over the past 50 years on winegrowers has been significant.The first burst of buds appear 15 days earlier than they did in the early 1970s, according to a recent analysis. Ripening starts 18 days earlier. And harvesting begins in late August instead of mid September. Change was expected, but the accelerating pace has come as a shock.For many vineyards, the new weather patterns are resulting in smaller grapes that produce sweeter wines with a higher alcohol content. These developments, alas, are out of step with consumers who are turning to lighter, fresher tasting wines with more tartness and less alcohol.For other vineyards, the challenges are more profound: Dwindling water supplies threaten their existence.How to respond to these shifts, though, is not necessarily clear.A harvester clipping clusters by hand and dropping them into round baskets, which are then moved into trucks.Emergency irrigation, for example, can save young vines from dying when the heat is scorching. Yet over the long haul, access to water near the surface means the roots may not drill down deep into the earth in search of the subterranean water tables they need to sustain them.Chêne Bleu, a small and relatively new family winery on La Verrière, the site of a medieval priory above the village of Crestet, is one of the region’s leaders in developing adaptations for cultivation and processing that are regenerative and organic.“We’re all going to get whacked by similar weather challenges,” said Nicole Rolet, who inaugurated the winery in 2006 with her husband, Xavier.In her view, there are two responses to climate change: You can fight it with chemicals and artificial additives that battle nature, she said, or “you can create a balanced functioning of the ecology through biodiversity.”Gardeners tending to the fruit and vegetable quarter. Scientists have found that expanding the variety of plants and animals can reduce the impact of shifting climate on crops. Between the rows, grasses blanket the ground. They help manage erosion, retain water, enrich the soil, capture more carbon and control pests and disease.There is a bee colony on the property to increase cross-pollination. The natural approach was on display one morning as harvesters slowly inched down the rows of vines, clipping plump purple clusters of Grenache grapes by hand.Stationary wooden pickets have been replaced by a trellising system that can be adjusted upward as vines grow so that their leaves can be positioned to serve as a natural canopy to shade grapes from a burning sun.Between the rows, grasses blanket the ground. They are just some of the cover crops that have been planted to help manage erosion, retain water, enrich the soil, capture more carbon and control pests and disease.Scientists have found that expanding the variety of plants and animals can reduce the impact of shifting climate on crops, highlighting, as one study put it, “the critical role that human decisions play in building agricultural systems resilient to climate change.”Surrounding Chêne Bleu’s emerald fields are wildflowers, a wide range of plant species and a private forest. There is a bee colony to increase cross-pollination and a grove of bamboo to naturally filter water used in the winery.Sheep provide the manure for fertilizer. The vineyard also dug a muddy pool — nicknamed the “spa” — for roaming wild boar, to lure them away from the juicy grapes with their own water supply.The Rolets have teamed up with university researchers to experiment with cultivation practices. And they are compiling a census of animal and plant species, including installing infrared equipment to capture rare creatures like a genet, a catlike animal with a long, ringed tail.“People are formally and informally doing experimental work, promoting best practices,” Ms. Rolet said, as she sat in a grand dining hall topped by stone archways at the restored priory. “It’s surprisingly hard to do.”“No one has time or money to take nose off the grindstone to look at what someone is doing on the other side of the world,” she explained.Harvesters sifting through grapes on a conveyor belt in the winery, looking to pick out stray leaves or bad grapes.At the winery, the morning’s harvest is emptied onto a conveyor belt, where workers pick out stray leaves or damaged berries before they are dropped into a gentle balloon press. The golden juice drips down into a tray lined with dry ice, producing vaporous swirls and tendrils. The ice prevents bacterial growth and eats up the oxygen that can ruin the flavor.Chêne Bleu has several advantages that many neighboring vineyards don’t. Its 75 acres are relatively isolated and located in a Unsesco biosphere reserve, a designation aimed at conserving biodiversity and promoting sustainable practices. Because it is situated on a limestone outcropping on the ridge of a tectonic plate, the soil contains ancient seabeds and a rich combination of minerals. And, at 1,600 feet, it is one of the highest vineyards in Provence.Winegrowers have been increasingly searching for higher altitudes because of cooler nighttime temperatures and shorter periods of intense heat. In Spain’s Catalonia region, the global wine producer Familia Torres has in recent years planted vineyards at 3,000 to 4,000 feet up.An assistant winemaker. A cellar assistant cleaning equipment.The wine cellar with barrels made of French oaks.Chêne Bleu has other resources. Mr. Rolet, a successful businessman and former chief executive of the London Stock Exchange, has been able to finance the vineyard’s cutting edge equipment and experiments. A larger marketing budget enables the vineyard to take chances others might not want to risk.The Rolets, for example, chose to sometimes bypass traditional appellations — legally defined and protected wine-growing areas — to experiment with more varieties for their high-end offerings.Although the wine map has changed, France’s strict classification system has not. Appellations were instituted decades ago to ensure that buyers knew what they were purchasing. But now, those definitions can limit the type of varieties that farmers can use as they search for vines that can better withstand climate change.Dry ice being added to the press pan to help protect the juice from oxygen. The juice drips down into a tray lined with dry ice, which prevents bacterial growth and eats up the oxygen that can ruin the flavor.“There is a big, frustrating lag time between what the winemakers are experiencing and what the authorities are doing,” said Julien Fauque, the director of Cave de Lumières, a cooperative of roughly 50 winegrowers who farm 450 hectares of land in the Ventoux and Luberon areas.Climate change may mean that growers must reconsider once unthinkable practices.Adding tiny amounts of water could reduce the alcoholic content and prevent fermentation from stalling, he said, but the practice, strictly forbidden across the European Union, could land a winemaker in prison. California, by contrast, allows such additions.There is flexibility in the system, said Anthony Taylor, the director of communications at Gabriel Meffre in Gigondas, one of the larger wineries in southern Rhône. But “they’re on a wire,” he said of official regulators. “They want to preserve as much as possible a profile that is successful, and they’re also listening to the other side, which argues we need to change things or introduce new varieties.”The pace of change, though, is accelerating, Mr. Taylor said: “The speed at which we’re moving is quite frightening.”A chef uses only local products, mainly from the vegetable garden on the estate.Harvesters taking a lunch break before returning to work.Chêne Bleu is on La Verrière, the site of a medieval priory. More

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    Want to Spur Green Energy in Wyoming? Aim for the Billionaires.

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    If the area around Jackson, Wyo., boasts two things, they’re natural resources and very rich locals. Nathan Wendt is trying to use the Biden administration’s clean energy incentives to bring the two together.Mr. Wendt, the president of the Jackson Hole Center for Global Affairs, has spent years working on issues related to climate change and local economic development. And as President Biden pushed one climate-related policy after another through Congress — first the infrastructure law, and then the Inflation Reduction Act — and a dizzying array of tax credits, loans and grants became available, he sensed an opportunity.“For Jackson Hole investors looking for the next big thing, there’s no need to look beyond state lines,” Mr. Wendt wrote this spring in an opinion essay in The Jackson Hole News & Guide, where he extolled the “flush tax credits” the law provided. “This decade’s great money-making opportunity,” he wrote, “will be in investing in net zero projects in energy communities, including in Wyoming.”Wyoming is both the nation’s largest coal producer and a Republican stronghold where the clean energy transition has at times faced stark opposition. Its entire congressional delegation voted against the Inflation Reduction Act. But the state is unusually well suited to benefit from some of the green incentives the government is offering.Wyoming’s geology and legal landscape make it a top candidate for fledgling carbon capture technologies, which the law promotes through sweetened and extended tax credits. Its existing pipeline infrastructure and energy industry work force could help with hydrogen development. And, perhaps most important, the state has plenty of people whom the Inflation Reduction Act is courting — well-heeled investors who are looking for a way to turn a profit off the green energy transition.Nathan Wendt is hoping that Wyoming’s combination of wealthy residents, a work force primed for energy industries and local resources could make the state a magnet for clean energy investment.Ryan Dorgan for The New York TimesThe Biden administration’s climate law works by attracting private capital to clean energy. While the plan includes targeted grants, many of its potentially most significant provisions aim to transition the nation’s energy supply — and its energy work force — by luring people with capital to invest. Tax breaks and other incentives mean it’s more attractive to make financial bets on risky, but possibly transformational, green technologies.That has Mr. Wendt and other climate researchers across the state looking at Jackson, a town full of potential investors who could pour money into new projects. The elite enclave nestled next to Grand Teton National Park boasts the highest-income county in the United States by some measures. And, Mr. Wendt reasons, many of its millionaires and billionaires work in financial markets but decamped from big coastal cities because they loved the natural beauty that Wyoming has to offer.They might, he figures, have both the money and the motivation to make local climate investment a reality.“Teton County has been historically disconnected from the wider Wyoming economic story,” Mr. Wendt said on a late August morning in Jackson’s town square, a few yards away from an arch made of elk antlers and a few hundred yards away from a number of wealth management offices. “We’re trying to bridge that gap.”Mr. Wendt said, “Teton County has been historically disconnected from the wider Wyoming economic story.”Ryan Dorgan for The New York TimesThe town of roughly 10,000 is the only municipality in Teton County, which boasts the highest per capita income of any county in the United States.Ryan Dorgan for The New York TimesLocal climate activists see Jackson as a place that could help bankroll local clean energy development.Ryan Dorgan for The New York TimesIt’s not just Mr. Wendt who has sensed a profit opportunity. Investors and companies across the country have taken notice. Just since August, about 150 corporations have talked about the Inflation Reduction Act during investor presentations, based on Bloomberg transcripts.In fact, interest has exceeded expectations. The Congressional Budget Office had at one point forecast that energy and climate outlays tied to the law would total about $391 billion from 2022 to 2031, with more than 60 percent of that coming from claims for various tax credits.But Goldman Sachs analysts have estimated that the total could be three times that amount, as people and businesses make much heavier use of the incentives than the government expected. That could mean that some $3 billion pours into green energy investment over the coming decade — $1.2 trillion from the government in the form of tax credits and other incentives, matched by even more in capital from private companies. While their estimates are on the high side, other research groups and the government itself have revised their forecasts upward.Wyoming, for its part, could be well placed to take advantage of some of the law’s more cutting-edge provisions. Some estimates have suggested that the state could see the largest per capita investment related to the legislation of any state in the nation.The opportunities are linked to both local policies and local resources, said Scott Quillinan, the senior director of research for the School of Energy Resources at the University of Wyoming.For instance, the law incentivizes hydrogen development with a new tax credit, making it a much cheaper potential fuel. Wyoming already has pipeline and rail networks that could help transport hydrogen mixtures, Mr. Quillinan said.The law also expanded a tax credit for what is known as direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products. Wyoming is home to spongelike rocks filled with pockets of saltwater, which are ideal for storing captured carbon. It is also easier to get the necessary permits to set up such projects in Wyoming than in many other states.And while it used to be difficult to make cost-intensive direct capture projects pencil out, the law changed that, increasing the credit for directly captured carbon stored in saline rock formations to $180 per ton from $50.“The incentives finally make these investments profitable,” said Michele Della Vigna, a researcher at Goldman.Environmentalists sometimes question both hydrogen and direct carbon capture technologies, in part because they’re relatively untested. But since the law’s passage last year, announcements of carbon capture projects — including a large one in Wyoming — have spiked.Project Bison, a carbon capture facility under development by the firm CarbonCapture, is set to be the biggest project of its kind, and big names like BCG and Microsoft have signed on for its carbon removal credits.Jonas Lee, CarbonCapture’s chief commercial officer, said that, without the law, the project would most likely have been smaller and slower moving. Even with the law’s help, its planned opening this year has been delayed. Mr. Lee did not provide a reason or a new opening date, but said the firm still expected to operate at scale. Rusty Bell, the director of the Office of Economic Transformation at the Gillette College Foundation in Wyoming, thinks the administration’s climate push is destined for such hiccups. New technologies take time to roll out. The maze of incentives and grants on offer can be difficult to navigate.But Mr. Bell, who wrote the opinion essay with Mr. Wendt, also says Campbell County, where he is based, recognizes that its future as a coal-producing area will hinge partly on seizing new technologies. Residents can look at flailing coal communities elsewhere and realize “we don’t want to be like that in 10, 15, 20 years,” he said.The law also expanded a tax credit for direct carbon sequestration, the process of removing carbon from the air and storing it underground or turning it into new products.Ryan Dorgan for The New York Times More

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    Biden’s Climate Law Is Reshaping Private Investment in the United States

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    Lucrative tax incentives have fueled a surge in solar panels but failed to boost wind power, data from a new project show.Private investment in clean energy projects like solar panels, hydrogen power and electric vehicles surged after President Biden signed an expansive climate bill into law last year, a development that shows how tax incentives and federal subsidies have helped reshape some consumer and corporate spending in the United States.New data being released on Wednesday suggest the climate law and other parts of Mr. Biden’s economic agenda have helped speed the development of automotive supply chains in the American Southwest, buttressing traditional auto manufacturing centers in the industrial Midwest and the Southeast. The 2022 law, which passed with only Democratic support, aided factory investment in conservative bastions like Tennessee and the swing states of Michigan and Nevada. The law also helped underwrite a spending spree on electric cars and home solar panels in California, Arizona and Florida.The data show that in the year since the climate law passed, spending on clean-energy technologies accounted for 4 percent of the nation’s total investment in structures, equipment and durable consumer goods — more than double the share from four years ago.The law so far has failed to supercharge a key industry in the transition from fossil fuels that Mr. Biden is trying to accelerate: wind power. Domestic investment in wind production declined over the past year, despite the climate law’s hefty incentives for producers. And so far the law has not changed the trajectory of consumer spending on some energy-saving technologies like highly efficient heat pumps.But the report, which drills down to the state level, provides the first detailed look at how Mr. Biden’s industrial policies are affecting clean energy investment decisions in the private sector.The data come from the Clean Investment Monitor, a new initiative from the Rhodium Group, a consulting firm; and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research. Its findings go beyond simpler estimates, from the White House and elsewhere, providing the most comprehensive look yet at the effects of Mr. Biden’s economic agenda on America’s emerging clean-energy economy.The researchers spearheading the first cut of the data include Trevor Houser, a former Obama administration official, who is a partner at Rhodium; and Brian Deese, a former director of Mr. Biden’s National Economic Council, who is an innovation fellow at M.I.T.The climate bill President Biden signed into law last year includes a wide range of lucrative incentives to encourage domestic manufacturing and speed the nation’s transition away from fossil fuels. Doug Mills/The New York TimesThe Inflation Reduction Act, which Mr. Biden signed into law in August 2022, includes a wide range of lucrative incentives to encourage domestic manufacturing and speed the nation’s transition away from fossil fuels. That includes expanded tax breaks for advanced battery production, solar-panel installation, electric vehicle purchases and other initiatives. Many of those tax breaks are effectively unlimited, meaning they could eventually cost taxpayers hundreds of billions of dollars — or even top $1 trillion — if they succeed at driving enough new investment.Biden administration officials have tried to quantify the effects of that law, along with bipartisan legislation on infrastructure and semiconductors signed by the president earlier in his term, by tallying up corporate announcements of new spending linked to the legislation. A White House website estimates that companies have so far announced $511 billion in commitments for new spending linked to those laws, including $240 billion for electric vehicles and clean energy technology.The Rhodium and M.I.T. analysis draws on data from federal agencies, trade groups, corporate announcements and securities filings, news reports and other sources to try to construct a real-time estimate of how much investment has already been made in the emissions-reducing technologies targeted by Mr. Biden’s agenda. For comparison purposes, its data stretch back to 2018, under President Donald J. Trump.The numbers show that actual — not announced — business and consumer investment in clean-energy technologies hit $213 billion in the second half of 2022 and first half of 2023, after Mr. Biden signed the climate law. That was up from $155 billion the previous year and $81 billion in the first year of the data, under Mr. Trump.Trends in the data suggest that the impact of Mr. Biden’s agenda on clean-energy investment has varied depending on the existing economics of each targeted technology.Mr. Biden’s biggest successes have come in spurring increased investment in American manufacturing, and in catalyzing investment in technologies that remain relatively new in the marketplace.Fueled partly by foreign investment, like in battery plants in Georgia, actual investment in clean-energy manufacturing more than doubled over the last year from the previous year, the data show, totaling $39 billion. Such investment was almost nonexistent in 2018.The bulk of that spending was focused on the electric-vehicle supply chain, including in the new Southwest cluster of activity across California, Nevada and Arizona. The Inflation Reduction Act includes multiple tax breaks for such investment, with domestic-content requirements meant to encourage production of critical minerals, batteries and automotive assembly in the United States.The big winners in manufacturing investment, though, as a share of states’ economies, remain traditional auto states: Tennessee, Kentucky, Michigan and South Carolina.Mr. Biden’s bipartisan infrastructure law targets the clean-energy economy, including spending to build out more charging stations for electric vehicles.Gabby Jones for The New York TimesThe climate law also appears to have supercharged investment in so-called green hydrogen, which splits water atoms to create an industrial fuel. The same is true of carbon management — which seeks to capture and store greenhouse gas emissions from existing energy plants or pull carbon out of the atmosphere. All those technologies struggled to gain traction in the United States before the law showered them with tax breaks.Hydrogen and much of the carbon-capture investment is concentrated along the coast of the Gulf of Mexico, a region filled with incumbent fossil fuel companies that have begun to branch into those technologies. Another cluster of carbon-capture investment is concentrated in Midwestern states like Illinois and Iowa, where companies that produce corn ethanol and other biofuels are beginning to spend on efforts to sequester their emissions.The incentives for those technologies in the Inflation Reduction Act, along with other support in the bipartisan infrastructure law, “fundamentally change the economics of those two technologies, making them broadly cost-competitive for the first time,” Mr. Houser said in an interview.Other incentives have not yet budged the economics of critical technologies, most notably wind power, which boomed in recent years but is now facing global setbacks as projects become increasingly expensive to finance.Wind investment was lower in the first half of this year than at any point since the database was started.In the United States, wind projects are struggling to navigate government processes for permitting, transmission and locating projects, including opposition from some state and local lawmakers. Solar projects and related investment in storage for solar power, Mr. Houser noted, can be built closer to power consumers and have fewer hurdles to clear, and investment in them grew by 50 percent in the second quarter of 2023 from a year earlier.Some consumer markets have yet to be swayed by the promise of tax breaks for new energy technologies. Americans have not increased their spending on heat pumps, even though the law covers up to $2,000 toward the purchase of a new one. And over the last year, the states with the highest spending as a share of their economy on heat pumps are all concentrated in the Southeast — where, Mr. Houser said, consumers are more likely to already own such pumps, and to be in need of a new one. More

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    Bill Gates, Marie Kondo and World Bank Head Will Speak at Times Climate Event

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    Sign up to watch the livestream and connect with online attendees about solutions to the climate crisis on Thursday, Sept. 21.Climate change is an issue that stretches across borders, touching every facet of our lives. Addressing it likewise requires shifts in almost every industry and institution. On Sept. 21, The New York Times will bring together newsmakers, including innovators, activists, scientists and policymakers, for an all-day event examining the actions needed to confront climate change.The livestream is available for Times subscribers.Sessions will include:Ajay Banga, president of the World Bank GroupAl Gore, former vice president of the United StatesBill Gates, founder of Breakthrough Energy and co-chair of the Bill & Melinda Gates FoundationEbony Twilley Martin, executive director of Greenpeace USAEleni Myrivili, global chief heat officer to U.N. Habitat and the Arsht-Rock Resilience CenterMarie Kondo, tidying expert and founder of KonMari MediaMichael R. Bloomberg, founder of Bloomberg L.P. and Bloomberg PhilanthropiesRobin Wall Kimmerer, scientist and authorTimes journalists, including the managing correspondent for the Climate Forward newsletter, David Gelles, and domestic correspondent, Somini Sengupta, and national food correspondent, Kim Severson, will drive the conversation.Signing up for the livestream will also give you an opportunity to connect with other online attendees on the messaging platform Slack. Each day will feature a different topic and guests, along with prompts from Times editorial staff.Details about the Slack channel and event schedule will be shared after registering. More

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    Heat Is Costing the U.S. Economy Billions in Lost Productivity

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    From meatpackers to home health aides, workers are struggling in sweltering temperatures and productivity is taking a hit.As much of the United States swelters under record heat, Amazon drivers and warehouse workers have gone on strike in part to protest working conditions that can exceed 100 degrees Fahrenheit.On triple-digit days in Orlando, utility crews are postponing checks for gas leaks, since digging outdoors dressed in heavy safety gear could endanger their lives. Even in Michigan, on the nation’s northern border, construction crews are working shortened days because of heat.Now that climate change has raised the Earth’s temperatures to the highest levels in recorded history, with projections showing that they will only climb further, new research shows the impact of heat on workers is spreading across the economy and lowering productivity.Extreme heat is regularly affecting workers beyond expected industries like agriculture and construction. Sizzling temperatures are causing problems for those who work in factories, warehouses and restaurants and also for employees of airlines and telecommunications firms, delivery services and energy companies. Even home health aides are running into trouble.“We’ve known for a very long time that human beings are very sensitive to temperature, and that their performance declines dramatically when exposed to heat, but what we haven’t known until very recently is whether and how those lab responses meaningfully extrapolate to the real-world economy,” said R. Jisung Park, an environmental and labor economist at the University of Pennsylvania. “And what we are learning is that hotter temperatures appear to muck up the gears of the economy in many more ways than we would have expected.”A study published in June on the effects of temperature on productivity concludes that while extreme heat harms agriculture, its impact is greater on industrial and other sectors of the economy, in part because they are more labor-intensive. It finds that heat increases absenteeism and reduces work hours, and concludes that as the planet continues to warm, those losses will increase.The cost is high. In 2021, more than 2.5 billion hours of labor in the U.S. agriculture, construction, manufacturing, and service sectors were lost to heat exposure, according to data compiled by The Lancet. Another report found that in 2020, the loss of labor as a result of heat exposure cost the economy about $100 billion, a figure projected to grow to $500 billion annually by 2050.A U.P.S. delivery in Manhattan on Monday.Spencer Platt/Getty ImagesOther research found that as the mercury reaches 90 degrees Fahrenheit, productivity slumps by about 25 percent and when it goes past 100 degrees, productivity drops off by 70 percent.And the effects are unequally distributed: in poor counties, workers lose up to 5 percent of their pay with each hot day, researchers have found. In wealthy counties, the loss is less than 1 percent.Of the many economic costs of climate change —- dying crops, spiking insurance rates, flooded properties — the loss of productivity caused by heat is emerging as one of the biggest, experts say.“We know that the impacts of climate change are costing the economy,” said Kathy Baughman McLeod, director of the Adrienne Arsht-Rockefeller Foundation Resilience Center, and a former global executive for environmental and social risk at Bank of America. “The losses associated with people being hot at work, and the slowdowns and mistakes people make as a result are a huge part.”Still, there are no national regulations to protect workers from extreme heat. In 2021, the Biden administration announced that the Occupational Safety and Health Administration would propose the first rule designed to protect workers from heat exposure. But two years later, the agency still has not released a draft of the proposed regulation.Seven states have some form of labor protections dealing with heat, but there has been a push to roll them back in some places. In June, Governor Greg Abbott of Texas signed a law that eliminated rules set by municipalities that mandated water breaks for construction workers, even though Texas leads all states in terms of lost productivity linked to heat, according to an analysis of federal data conducted by Vivid Economics.Business groups are opposed to a national standard, saying it would be too expensive because it would likely require rest, water and shade breaks and possibly the installation of air-conditioning.Martin Rosas, the vice president for the United Food and Commercial Workers Union International. “When it’s extremely hot, and their safety glasses fog up, their vision is impaired and they are exhausted, they can’t even see what they’re doing,” he said of the workers he represents.Brett Deering for The New York Times“OSHA should take care not to impose further regulatory burdens that make it more difficult for small businesses to grow their businesses and create jobs,” wrote David S. Addington, vice president of the National Federation of Independent Business, in response to OSHA’s plan to write a regulation.Marc Freedman, vice president of employment policy at the United States Chamber of Commerce, said, “I don’t think anyone is dismissing the hazard of overexposure to heat.” But, he said, “Is an OSHA standard the right way to do it? A lot of employers are already taking measures, and the question will be, what more do they have to do?”The National Beef slaughterhouse in Dodge City, Kan., where temperatures are expected to hover above 100 degrees Fahrenheit for the next week, is cooled by fans, not air-conditioning.Workers wear heavy protective aprons and helmets and use water vats and hoses heated to 180 degrees to sanitize their equipment. It’s always been hot work.But this year is different, said one worker, who asked not to be identified for fear of retribution. The heat inside the slaughterhouse is intense, drenching employees in sweat and making it hard to get through a shift, the worker said.National Beef did not respond to emails or telephone calls requesting comment.Martin Rosas, a union representative for meatpacking and food processing workers in Kansas, Missouri and Oklahoma, said sweltering conditions present a risk for food contamination. After workers skin a hide, they need to ensure that debris doesn’t get on the meat or carcass. “But when it’s extremely hot, and their safety glasses fog up, their vision is impaired and they are exhausted, they can’t even see what they’re doing,” Mr. Rosas said.Almost 200 employees out of roughly 2,500, have quit at the Dodge City National Beef plant since May, Mr. Rosas said. That’s about 10 percent higher than usual for that time period, he said.Maria Rodriguez, who has worked at the same McDonald’s in Los Angeles for 20 years, walked out on July 21.Jessica Pons for The New York TimesBut even some workers in air-conditioned settings are getting too hot. McDonald’s workers in Los Angeles walked off the job this summer as the air-conditioned kitchens were overwhelmed by the sweltering heat outside.“There is an air-conditioner in every part of the store, but the thermostat in the kitchen still showed it was over 100 degrees,” said Maria Rodriguez, who has worked at the same McDonald’s on Crenshaw Boulevard in Los Angeles for 20 years, but walked out on July 21, sacrificing a day of pay. “It’s been hot before, but never like this summer. I felt terrible — like I could pass out or faint at any moment.”Nicole Enearu, the owner of the store, said in a statement, “We understand that there’s an uncomfortable heat wave in LA, which is why we’re even more focused on ensuring the safety of our employees inside our restaurants. Our air-conditioning is functioning properly at this location.”Tony Hedgepeth, a home health aide in Richmond, Va., cares for a client whose home thermostat is typically set at about 82 degrees. Last week, the temperature inside was near 94 degrees.Any heat is a challenge in Mr. Hedgepeth’s job. “Bathing, cooking, lifting and moving him, cleaning him,” he said. “It’s all physical. It’s a lot of sweat.”Warehouse workers across the country are also feeling the heat. Sersie Cobb, a forklift driver who stocks boxes of pasta in a warehouse in Columbia, S.C., said the stifling heat can make it difficult to breathe. “Sometimes I get dizzy and start seeing dots,” Mr. Cobb said. “My vision starts to go black. I stop work immediately when that happens. Two times this summer I’ve had heart palpitations from the heat, and left work early to go to the E.R.”In Southern California, a group of 84 striking Amazon delivery workers say that one of their priorities is getting the company to make it safe to work in extreme heat. Last month, unionized UPS workers won a victory when the company agreed to install air-conditioning in delivery trucks.Amazon delivery drivers striking at the company’s Palmdale, Calif., warehouse and delivery center on Tuesday.Robyn Beck/Agence France-Presse — Getty Images“Heat has played a tremendous role — it was one of the major issues in the negotiations,” said Carthy Boston, a member of the International Brotherhood of Teamsters representing UPS drivers in Washington, D.C. “Those trucks are hotboxes.”Many factories were built decades ago for a different climate and are not air-conditioned. A study on the effects of extreme temperatures on the productivity of auto plants in the United States found that a week with six or more days of heat exceeding 90 degrees Fahrenheit cuts production by an average of 8 percent.In Tulsa, Okla., Navistar is installing a $19 million air-conditioning system at its IC Bus factory, which produces many of America’s school buses. Temperatures on the floor can reach 99 degrees F. Currently, the plant is only cooled by overhead fans that swirl high above the assembly line.Shane Anderson, the company’s interim manager, said air-conditioning is expected to cost about $183 per hour, or between $275,000 and $500,000 per year — but the company believes it will boost worker productivity.Other employers are also adapting.Brad Maurer, who leads a construction contracting business in Michigan, where heat has caused his employees to stop working hours before quitting time at some sites.Emily Elconin for The New York TimesBrad Maurer, vice president of Leidal and Hart, which builds stadiums, hospitals and factories in Michigan, Ohio, Indiana, Kentucky and Tennessee, said managers now bring in pallets of bottled water, which they didn’t used to do, at a cost to the company of a few thousand dollars a month.Rising heat around Detroit recently caused his employees to stop working three hours early on a Ford Motors facility for several days in a row — a pattern emerging throughout his company’s work sites.“It means costs go up, production goes down, we may not meet schedules, and guys and women don’t get paychecks,” Mr. Maurer said. Labor experts say that as employers adapt to the new reality of the changing climate, they will have to pay one way or the other.“The truth is that the changes required probably will be very costly, and they will get passed on to employers and consumers,” said David Michaels, who served as assistant secretary of labor at OSHA during the Obama administration and is now a professor at the George Washington School of Public Health.“But if we don’t want these workers to get killed we will have to pay that cost.”David Gelles More

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    Canada Offers Lesson in the Economic Toll of Climate Change

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    Wildfires are hurting many industries and could strain households across Canada, one of many countries reckoning with the impact of extreme weather.Canada’s wildfires have burned 20 million acres, blanketed Canadian and U.S. cities with smoke and raised health concerns on both sides of the border, with no end in sight. The toll on the Canadian economy is only beginning to sink in.The fires have upended oil and gas operations, reduced available timber harvests, dampened the tourism industry and imposed uncounted costs on the national health system.Those losses are emblematic of the pressure being felt more widely as countries around the world experience disaster after disaster caused by extreme weather, and they will only increase as the climate warms.What long seemed a faraway concern has snapped into sharp relief in recent years, as billowing smoke has suffused vast areas of North America, floods have washed away neighborhoods, and heat waves have strained power grids. That incurs billions of dollars in costs, and also has longer-reverberating consequences, such as insurers withdrawing from markets prone to hurricanes and fires.In some early studies of the economic impact of rising temperatures, Canada appeared to be better positioned than countries closer to the Equator; warming could allow for longer farming seasons and make more places attractive to live in as winters grow less harsh. But it is becoming clear that increasing volatility — ice storms followed by fires followed by intense rains and now hurricanes on the Atlantic Coast, uncommon so far north — wipes out any potential gains.“It’s come on faster than we thought, even informed people,” said Dave Sawyer, principal economist at the Canadian Climate Institute. “You couldn’t model this out if you tried. We’ve always been concerned about this escalation of damages, but seeing it happen is so stark.”Nonetheless, Mr. Sawyer and his colleagues did try to model it out. In a report last year, they calculated that climate-related costs would mount to 25 billion Canadian dollars in 2025, cutting economic growth in half. By midcentury, they forecast a loss of 500,000 jobs, mostly from excessive heat that lowers labor productivity and causes premature death. Then there are the increased costs to households, and higher taxes required to support government spending to repair the damage — especially in the north, where thawing permafrost is cracking roads and buildings.The recent fires have forced some lumber mills to idle. It’s not clear how widespread the damage will be to forest stocks.Jen Osborne for The New York TimesIt is too early to know the cost for the current fires, and several months of fire season remain. But the consulting firm Oxford Economics has forecast that it could knock between 0.3 and 0.6 percentage points off Canada’s economic growth in the third quarter — a big hit, especially since hiring in the country has already slowed and households have more debt and less savings than their neighbors to the south.“We already think we’re teetering into a downturn, and this would just make things worse,” said Tony Stillo, director of economics for Canada at Oxford. “If we were to see these fires really disrupt transportation corridors, disrupting power supply to large population centers, then you’re talking about even worse consequences.”Estimates of the overall economic drag are built on damage to particular industries, which vary with each disaster.The recent fires have left some lumber mills idle, for example, as workers have been evacuated. It’s not clear how widespread the damage will be to forest stocks, but provincial governments tend to reduce the amount of timber they allow to be harvested after large blazes, according to Derek Nighbor, chief executive of the Forest Products Association of Canada. Infestations of pine beetles, which have flared up as milder winter temperatures fail to kill off the pests, have curtailed logging in British Columbia.Although lumber prices have been depressed in recent months as higher interest rates have weighed on home construction, Canada is confronting a housing shortage as it works to bring in millions of new immigrants. Reduced availability of wood will make its housing problem more difficult to solve. “It’s safe to say there’s going to be a supply crunch in Canada as we work through this,” Mr. Nighbor said.The tourism industry is also being hit, as the fires erupted just as operators were going into the crucial summer season — sometimes far from the fires. Business plunged in the peninsula town of Tofino, a popular destination for whale watching off Vancouver Island, when its only highway access was cut off by a fire two hours away. The road has since reopened, but only one lane at a time, and drivers need to wait up to an hour to get through.Sabrina Donovan is the general manager of the Pacific Sands Beach Resort and the chair of Tofino’s local tourism promotion organization. She said that her hotel’s occupancy sank to about 20 percent from 85 percent in the course of June, and that few bookings were coming through for the rest of the year. Employers commonly house their staff during the summer, but after weeks without customers, many workers left for jobs elsewhere, making it difficult to maintain full service in the coming months.“This most recent fire has been pretty devastating for the majority of the community,” Ms. Donovan said, noting that the coast had never in her career had to deal with wildfires. “This is something we now have to be thinking about in the future.”The wildfires could depress spending when households are already strained.Jen Osborne for The New York TimesRegardless of the severity of any particular episode, the costs mount as disasters get closer to critical infrastructure and population centers. That is why the two most expensive years in recent history were 2013, when major flooding hit Calgary, and 2016, when the Fort McMurray fire wiped out 2,400 homes and businesses and hamstrung oil and gas production, the area’s main economic driver.This year, most of the burning has been in rural areas. While some oil drilling has been disrupted, the damage overall to the oil industry has been minor. The greater long-term threat to the industry is falling demand for fossil fuels, which could displace 312,000 to 450,000 workers in the next three decades, according to an analysis by TD Bank.But there is still a long, hot summer ahead. And the insurance industry is on alert, having watched the increasing damage in recent years with alarm. Before 2009, insured losses in Canada averaged around 450 million Canadian dollars a year, and now they routinely exceed $2 billion. Large reinsurers pulled back from the Canadian market after several crippling payouts, increasing prices for homeowners and businesses. That is not even counting the life insurance costs likely to be incurred by excessive heat and smoke-related respiratory ailments.Craig Stewart, vice president of federal affairs for the Insurance Bureau of Canada, said climate issues had become a primary concern for the organization over the past decade.The mounting cost of catastrophic events in CanadaPayouts including adjustment expenses by property and casualty insurers for disasters that total more than $30 million, in 2021 Canadian dollars.

    Source: Insurance Bureau of CanadaBy The New York Times“Back in 2015, we sent our C.E.O. across the country to talk about the need to prepare for a different climate future,” Mr. Stewart said. “At the time, we had the Calgary floods two years before in the rear view mirror. We thought, ‘Oh, we’ll get another event in two to three years.’ We never could’ve imagined that we’re now seeing two or three catastrophic events in the country per year.”That’s why the industry pushed hard for the Canadian government to come up with a comprehensive adaptation strategy, which was released in late June. It recommends measures like investing in urban forests to reduce the health effects of heat waves and developing better flood maps that help people avoid building in vulnerable areas. Fire and forestry experts have called for the forest service, decimated by years of austerity, to be restored, and prescribed burns to be scaled up — all of which costs a lot of money.Mike Savage, the mayor of Halifax, doesn’t have to be convinced that the spending is necessary. His city was the largest to sustain fire losses this spring, with 151 homes burned. That calamity came on the heels of Hurricane Fiona last year, which submerged much of the coastline. Mr. Savage worries about the fate of the isthmus that connects Nova Scotia to New Brunswick, and the power systems that now peak in the hot summer instead of the frigid winter.“I certainly believe that when you invest in mitigation there’s a dramatic positive impact from those investments,” Mr. Savage said. “It’s going to be a challenging time. To think we got through this fire and say, ‘OK, that’s good, we’re done,’ that would be a little bit naïve.” More

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    Why What We Thought About the Global Economy Is No Longer True

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    While the world’s eyes were on the pandemic, the war in Ukraine and China, the paths to prosperity and shared interests have grown murkier.When the world’s business and political leaders gathered in 2018 at the annual economic forum in Davos, the mood was jubilant. Growth in every major country was on an upswing. The global economy, declared Christine Lagarde, then the managing director of the International Monetary Fund, “is in a very sweet spot.”Five years later, the outlook has decidedly soured.“Nearly all the economic forces that powered progress and prosperity over the last three decades are fading,” the World Bank warned in a recent analysis. “The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world.”A lot has happened between then and now: A global pandemic hit; war erupted in Europe; tensions between the United States and China boiled. And inflation, thought to be safely stored away with disco album collections, returned with a vengeance.But as the dust has settled, it has suddenly seemed as if almost everything we thought we knew about the world economy was wrong.The economic conventions that policymakers had relied on since the Berlin Wall fell more than 30 years ago — the unfailing superiority of open markets, liberalized trade and maximum efficiency — look to be running off the rails.During the Covid-19 pandemic, the ceaseless drive to integrate the global economy and reduce costs left health care workers without face masks and medical gloves, carmakers without semiconductors, sawmills without lumber and sneaker buyers without Nikes.Calverton National Cemetery in New York in early 2021, where daily burials more than doubled at the height of the pandemic.Johnny Milano for The New York TimesCaring for Covid patients in Bergamo, Italy, in 2020. Cost-cutting and economic integration around the globe left health care workers scrambling for masks and other supplies when the coronavirus hit.Fabio Bucciarelli for The New York TimesThe idea that trade and shared economic interests would prevent military conflicts was trampled last year under the boots of Russian soldiers in Ukraine.And increasing bouts of extreme weather that destroyed crops, forced migrations and halted power plants has illustrated that the market’s invisible hand was not protecting the planet.Now, as the second year of war in Ukraine grinds on and countries struggle with limp growth and persistent inflation, questions about the emerging economic playing field have taken center stage.Globalization, seen in recent decades as unstoppable a force as gravity, is clearly evolving in unpredictable ways. The move away from an integrated world economy is accelerating. And the best way to respond is a subject of fierce debate.Of course, challenges to the reigning economic consensus had been growing for a while.“We saw before the pandemic began that the wealthiest countries were getting frustrated by international trade, believing — whether correctly or not — that somehow this was hurting them, their jobs and standards of living,” said Betsey Stevenson, a member of the Council of Economic Advisers during the Obama administration.The financial meltdown in 2008 came close to tanking the global financial system. Britain pulled out of the European Union in 2016. President Donald Trump slapped tariffs on China in 2017, spurring a mini trade war.But starting with Covid-19, the rat-a-tat series of crises exposed with startling clarity vulnerabilities that demanded attention.As the consulting firm EY concluded in its 2023 Geostrategic Outlook, the trends behind the shift away from ever-increasing globalization “were accelerated by the Covid-19 pandemic — and then they have been supercharged by the war in Ukraine.”A view of the destruction in Bakhmut, Ukraine, in May.Tyler Hicks/The New York TimesUkrainians lined up to receive humanitarian aid in Kherson last year. Trade and shared economic interests weren’t enough to prevent wars, as once thought.Lynsey Addario for The New York TimesIt was the ‘end of history.’Today’s sense of unease is a stark contrast with the heady triumphalism that followed the collapse of the Soviet Union in December 1991. It was a period when a theorist could declare that the fall of communism marked “the end of history” — that liberal democratic ideas not only vanquished rivals, but represented “the end point of mankind’s ideological evolution.”Associated economic theories about the ineluctable rise of worldwide free market capitalism took on a similar sheen of invincibility and inevitability. Open markets, hands-off government and the relentless pursuit of efficiency would offer the best route to prosperity.It was believed that a new world where goods, money and information crisscrossed the globe would essentially sweep away the old order of Cold War conflicts and undemocratic regimes.There was reason for optimism. During the 1990s, inflation was low while employment, wages and productivity were up. Global trade nearly doubled. Investments in developing countries surged. The stock market rose.The World Trade Organization was established in 1995 to enforce the rules. China’s entry six years later was seen as transformative. And linking a huge market with 142 countries would irresistibly draw the Asian giant toward democracy.China, along with South Korea, Malaysia and others, turned struggling farmers into productive urban factory workers. The furniture, toys and electronics they sold around the world generated tremendous growth.China joined the World Trade Organization at a signing ceremony in 2001. ReutersThe favored economic road map helped produce fabulous wealth, lift hundreds of millions of people out of poverty and spur wondrous technological advances.But there were stunning failures as well. Globalization hastened climate change and deepened inequalities.In the United States and other advanced economies, many industrial jobs were exported to lower-wage countries, removing a springboard to the middle class.Policymakers always knew there would be winners and losers. Still, the market was left to decide how to deploy labor, technology and capital in the belief that efficiency and growth would automatically follow. Only afterward, the thinking went, should politicians step in to redistribute gains or help those left without jobs or prospects.Companies embarked on a worldwide scavenger hunt for low-wage workers, regardless of worker protections, environmental impact or democratic rights. They found many of them in places like Mexico, Vietnam and China.Television, T-shirts and tacos were cheaper than ever, but many essentials like health care, housing and higher education were increasingly out of reach.The job exodus pushed down wages at home and undercut workers’ bargaining power, spurring anti-immigrant sentiments and strengthening hard-right populist leaders like Donald Trump in the United States, Viktor Orban in Hungary and Marine Le Pen in France.In advanced industrial giants like the United States, Britain and several European countries, political leaders turned out to be unable or unwilling to more broadly reapportion rewards and burdens.Nor were they able to prevent damaging environmental fallout. Transporting goods around the globe increased greenhouse gas emissions. Producing for a world of consumers strained natural resources, encouraging overfishing in Southeast Asia and illegal deforestation in Brazil. And cheap production facilities polluted countries without adequate environmental standards.It turned out that markets on their own weren’t able to automatically distribute gains fairly or spur developing countries to grow or establish democratic institutions.Jake Sullivan, the U.S. national security adviser, said in a recent speech that a central fallacy in American economic policy had been to assume “that markets always allocate capital productively and efficiently — no matter what our competitors did, no matter how big our shared challenges grew, and no matter how many guardrails we took down.”The proliferation of economic exchanges between nations also failed to usher in a promised democratic renaissance.Communist-led China turned out to be the global economic system’s biggest beneficiary — and perhaps master gamesman — without embracing democratic values.“Capitalist tools in socialist hands,” the Chinese leader Deng Xiaoping said in 1992, when his country was developing into the world’s factory floor. China’s astonishing growth transformed it into the world’s second largest economy and a major engine of global growth. All along, though, Beijing maintained a tight grip on its raw materials, land, capital, energy, credit and labor, as well as the movements and speech of its people.Globalization has had enormous effects on the environment — including deforestation in Roraima State, in the Brazilian Amazon.Victor Moriyama for The New York TimesDistributing food in Johannesburg in 2020, where the pandemic caused a significant spike in the need for assistance.Joao Silva/The New York TimesMoney flowed in, and poor countries paid the price.In developing countries, the results could be dire.The economic havoc wreaked by the pandemic combined with soaring food and fuel prices caused by the war in Ukraine have created a spate of debt crises. Rising interest rates have made those crises worse. Debts, like energy and food, are often priced in dollars on the world market, so when U.S. rates go up, debt payments get more expensive.The cycle of loans and bailouts, though, has deeper roots.Poorer nations were pressured to lift all restrictions on capital moving in and out of the country. The argument was that money, like goods, should flow freely among nations. Allowing governments, businesses and individuals to borrow from foreign lenders would finance industrial development and key infrastructure.“Financial globalization was supposed to usher in an era of robust growth and fiscal stability in the developing world,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst. But “it ended up doing the opposite.”Some loans — whether from private lenders or institutions like the World Bank — didn’t produce enough returns to pay off the debt. Others were poured into speculative schemes, half-baked proposals, vanity projects or corrupt officials’ bank accounts. And debtors remained at the mercy of rising interest rates that swelled the size of debt payments in a heartbeat.Over the years, reckless lending, asset bubbles, currency fluctuations and official mismanagement led to boom-and-bust cycles in Asia, Russia, Latin America and elsewhere. In Sri Lanka, extravagant projects undertaken by the government, from ports to cricket stadiums, helped drive the country into bankruptcy last year as citizens scavenged for food and the central bank, in a barter arrangement, paid for Iranian oil with tea leaves.It’s a “Ponzi scheme,” Ms. Ghosh said.Private lenders who got spooked that they would not be repaid abruptly cut off the flow of money, leaving countries in the lurch.And the mandated austerity that accompanied bailouts from the International Monetary Fund, which compelled overextended governments to slash spending, often brought widespread misery by cutting public assistance, pensions, education and health care.Even I.M.F. economists acknowledged in 2016 that instead of delivering growth, such policies “increased inequality, in turn jeopardizing durable expansion.”Disenchantment with the West’s style of lending gave China the opportunity to become an aggressive creditor in countries like Argentina, Mongolia, Egypt and Suriname.A market in Buenos Aires. China has become an aggressive creditor to countries like Argentina. Sarah Pabst for The New York TimesSelf-reliance replaces cheap imports.While the collapse of the Soviet Union cleared the way for the domination of free-market orthodoxy, the invasion of Ukraine by the Russian Federation has now decisively unmoored it.The story of the international economy today, said Henry Farrell, a professor at the Johns Hopkins School of Advanced International Studies, is about “how geopolitics is gobbling up hyperglobalization.”Old-world style great power politics accomplished what the threat of catastrophic climate collapse, seething social unrest and widening inequality could not: It upended assumptions about the global economic order.Josep Borrell, the European Union’s head of foreign affairs and security policy, put it bluntly in a speech 10 months after the invasion of Ukraine: “We have decoupled the sources of our prosperity from the sources of our security.” Europe got cheap energy from Russia and cheap manufactured goods from China. “This is a world that is no longer there,” he said.Supply-chain chokeholds stemming from the pandemic and subsequent recovery had already underscored the fragility of a globally sourced economy. As political tensions over the war grew, policymakers quickly added self-reliance and strength to the goals of growth and efficiency.“Our supply chains are not secure, and they’re not resilient,” Treasury Secretary Janet L. Yellen said last spring. Trade relationships should be built around “trusted partners,” she said, even if it means “a somewhat higher level of cost, a somewhat less efficient system.”“It was naïve to think that markets are just about efficiency and that they’re not also about power,” said Abraham Newman, a co-author with Mr. Farrell of “Underground Empire: How America Weaponized the World Economy.”Economic networks, by their very nature, create power imbalances and pressure points because countries have varying capabilities, resources and vulnerabilities.Russia, which had supplied 40 percent of the European Union’s natural gas, tried to use that dependency to pressure the bloc to withdraw its support of Ukraine.The United States and its allies used their domination of the global financial system to remove major Russian banks from the international payments system.The Port of Chornomorsk near Odesa, last year. In 2021, Ukraine was the largest wheat exporter in the world.Laetitia Vancon for The New York TimesHarvesting grapes at a vineyard in South Australia. China blocked Australian exports of wine and other goods after the country expressed support for Taiwan.Adam Ferguson for The New York TimesChina has retaliated against trading partners by restricting access to its enormous market.The extreme concentrations of critical suppliers and information technology networks has generated additional choke points.China manufactures 80 percent of the world’s solar panels. Taiwan produces 92 percent of tiny advanced semiconductors. Much of the world’s trade and transactions are figured in U.S. dollars.The new reality is reflected in American policy. The United States — the central architect of the liberalized economic order and the World Trade Organization — has turned away from more comprehensive free trade agreements and repeatedly refused to abide by W.T.O. decisions.Security concerns have led the Biden administration to block Chinese investment in American businesses and limit China’s access to private data on citizens and to new technologies.And it has embraced Chinese-style industrial policy, offering gargantuan subsidies for electric vehicles, batteries, wind farms, solar plants and more to secure supply chains and speed the transition to renewable energy.“Ignoring the economic dependencies that had built up over the decades of liberalization had become really perilous,” Mr. Sullivan, the U.S. national security adviser, said. Adherence to “oversimplified market efficiency,” he added, proved to be a mistake.While the previous economic orthodoxy has been partly abandoned, it is not clear what will replace it. Improvisation is the order of the day. Perhaps the only assumption that can be confidently relied on now is that the path to prosperity and policy trade-offs will become murkier.A solar farm in Yanqing district, in China. The country makes 80 percent of the world’s solar panels.Gilles Sabrié for The New York Times More