G-8 Summit -- Good for the world's climate and economy

June 13, 2007

As chair of this year's G-8 Summit, EU President Angela Merkel brokered a historic agreement about climate change. This included getting the U.S. to agree that the climate change policy be under the auspices of the UN. Until now, President Bush has resisted subjugating U.S. actions to UN policy. Merkel also got Bush to agree to “seriously consider” cutting greenhouse gas emission in half by 2050.

The G-8 refused, however, to agree to a code of conduct for hedge funds, which are located primarily in the U.S. and the UK.

The G-8 also met with the other leaders of the G-20, and pledged to continue to include the emerging market countries, such as China, India and Brazil, in all ongoing discussions.

What the G-8 summit statement means:
Until now, the world’s leaders, especially the U.S. had not agreed that

1. Global warming was caused by human activity,
2. The UN was the right vehicle to enforce it and
3. Coordinated action must be taken.

Chancellor Merkel’s leadership on this issue is further indication that the EU is becoming more of a global leader than the U.S. This represents a significant change from the post-WWII / Marshall plan era. Part of Merkel's ability to broker the agreement came from her participation in the Kyoto Agreement as Germany’s then-environmental minister. Merkel is also fluent in Russian and English, thanks to her upbringing in Eastern Germany, which allows her to communicate more effectively with two opponents, Presidents Putin and Bush.

What needs to occur now is to turn the G-8 climate control intent into an action plan. This will occur over the next six months, leading up to the UN conference on climate change in Bali in December.

Chancellor Merkel will meet with the individual hedge funds themselves over the next six months to convince them of the wisdom in establishing a self-regulating code of conduct. Her efforts will help reduce the global risks that unregulated hedge funds have created. (See Hedge funds impact, 6/6/07)

Action steps:
It is said that “Luck is when opportunity meets preparation.” To prepare for a new world of opportunities, you must starting shifting your belief that the U.S. will continue to be the world leader, including economically. That will prepare you to spot the opportunities in the rest of the world, and draw greater luck into your life.

If you didn’t think that was enough action, then go ahead and make sure you have plenty of European funds in your portfolio. The U.S. economy is in a weakening trend. The smart money is going to where economic growth is strong, and that includes Europe and the G-20 nations.

Source: Der Spiegel, “Why the G-8 Might Work After All,” June 11, 2007

G-8 Global Summit Related Articles:

Last year's G-8 summit, 7/26/06

Merkel visits Bush, 1/10/07

Merkel to Putin "No more pipeline politics," 1/26/07

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