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Why Are Central Banks Creating Digital Currencies?

Source: Atlantic Council

Nineteen countries have started to test a central bank digital currency (CBDC) on a small-scale with a limited number of participants. The Atlantic Council defines CBDC as “the digital form of a country’s fiat currency that is also a claim on the central bank.”

As of today, the People’s Bank of China (PBOC) and the European Central Bank (ECB) are prominent players in the digital currency realm. The United States currently lags behind in the research phase, yet the Federal Reserve has expressed continued interest in the digital dollar.

As digital currencies expand globally, there are challenges ahead — the legal, political and regulatory properties of CBDCs remain unclear. But the IMF notes that there are also multiple benefits to having government involvement in digital currencies, including lower cash transfer costs, greater accessibility to banking services and easier implementation of monetary policies. 

Electric Cars Gain Popularity As Fuel Costs Rise

Higher gas prices are incentivizing people around the world to buy an electric vehicle, a new survey from Oliver Wyman shows. More than half (58%) of consumers said that high gas prices would motivate them to buy an EV, with “very high” gas prices pushing that number to 73%.

Chinese car buyers were most likely to say they would buy an electric vehicle, with 90% saying that gas prices over 10 yuan per liter ($6 per gallon) would make them consider an EV. Government benefits in China also help support higher consumer interest, including subsidizing the purchases of EV buyers with longer driving ranges and allowing electric cars on restricted roads during rush hour. 

Brazilians were second-most likely to consider buying an EV, with 88% saying that gas prices over 8 real per liter ($1.56 per gallon) would incentivize them to switch. U.K. consumers were the least likely to buy an electric car; a potential result of the government ending its subsidies for new EV sales and expanding the U.K.’s charging station network instead.  

Apart from gas prices, free vehicle charging was the top incentive for buying an EV, with 59% of consumers saying it would motivate them to make a purchase. Discounts for EV purchases (43%) and free parking stations (31%) were also motivators.

The World Is Bullish on Solar—Can Supply Chains Keep Up?

The world is rapidly adopting solar power — solar energy generation increased 22% between 2020 and 2021. The International Energy Agency (IEA) expects that number to jump again this year, as countries that relied on Russian fossil fuels invest more in renewable energy. Government initiatives have also helped grow solar energy, with incentives in Brazil, subsidies in China, and new tax credits in the U.S. promoting growth.

In the U.S., residential solar power installations rose 34% from 2020 to 2021 — though solar power generated only 3% of electricity last year. In Europe, projects in Spain, France, Poland, and Germany accelerated solar adoption. Australia has the highest residential adoption rate of solar power, with 31% of homes using solar energy. China is the largest contributor of solar capacity, with 31% of the world’s capacity, most of it due to large solar farms. 

Solar power costs rose last year as COVID-19 supply chain disruptions have raised the cost of solar panel production and installation. In 2021, prices rose as much as 18% in some areas of the solar industry. Despite rising costs, the IEA predicts that solar power will retain or increase its cost advantage compared to other renewable energy sources, like onshore wind farms, over the next two years.

Majority of British Say Sunak Should Call Early Election

According to a new survey by YouGov, more than half of British adults think that new Prime Minister Rishi Sunak should call an early general election, rather than waiting until one is legally required. The poll, sampling opinions of 2,398 adults, shows near unanimous majorities in favor of calling an election across region and gender. The only surveyed demographic that did not fully align was age: 60% of those aged 18-24 and 66% of those aged 25-49 preferred calls for an early election; 50% of adults over 65 disagreed.

According to a new survey by YouGov, more than half of British adults think that new Prime Minister Rishi Sunak should call an early general election, rather than waiting until one is legally required. The poll, sampling opinions of 2,398 adults, shows near unanimous majorities in favor of calling an election across region and gender. The only surveyed demographic that did not fully align was age: 60% of those aged 18-24 and 66% of those aged 25-49 preferred calls for an early election; 50% of adults over 65 disagreed.

In his first public remarks as prime minister, Sunak reiterated that he would focus on stability and unity for the country. However, the BBC reports that the new prime minister told his party’s ministers behind closed doors that he had “ruled out” calling for an early general election, despite strong demands from the opposition Labour Party. 

The next general election must be called by January 2025 as the last one was held in ​​2019, which Boris Johnson and the Conservative Party won in a landslide, garnering the greatest share of popular vote of any party in a general election since 1979. Current polling shows that has flipped — some polls now show the largest public preference for Labour in a quarter-century.

Incentives and Imperatives Fuel a ‘White Gold Rush’ in Lithium Mining

A combination of energy shortages, new electric vehicle incentives and action toward governmental climate adaptation goals has created a “white gold rush” for lithium. Global mining efforts for the metal have tripled since 2015 as global demand is expected to rise to three to four million metric tons by 2030.

A combination of energy shortages, new electric vehicle incentives and action toward governmental climate adaptation goals has created a “white gold rush” for lithium. Global mining efforts for the metal have tripled since 2015 as global demand is expected to rise to three to four million metric tons by 2030.

Currently, only five countries — Argentina, Chile, Bolivia, Australia and China — are responsible for nine-tenths of the world’s extraction of lithium. However, more nations and coalitions are aiming to hop on the train in order to meet the increasing need for the alkali metal, particularly in Europe. Businesses in Portugal, Germany, Austria and Finland are increasingly investing in conventional extraction operations, while France is touting the innovation of “green lithium,” which is produced from geothermal sources.

The expansion of lithium mining is critical for both the expanded production and controlled pricing of batteries in more sustainable consumer products. The cost of lithium-ion batteries dropped 88% over the past decade, though experts fear that shortages of raw materials could cause costs to spike over 20% in the next few years.

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