BCO221 GLOBAL ECONOMICS Task brief & rubrics
Task brief Description:
Individual task. First, answer the following two questions (60%) Then, write a report (40%).
Questions (60%)
Question 1 (30%). Explain the Bretton Woods system. You should refer to:
o As a result of the Bretton Woods system, what happened with the exchange rates? Was it fixed? Was it floating? (10p)
o Why did the Bretton Woods system collapse? (10p) o Would be such a system feasible nowadays?
Question 2 (30%). With reference to real world examples assess the pros and cons of different
exchange rate systems. In your answer you should refer to:
o Floating exchange rate regimes you should in particular consider whether floating currencies are condusive to promoting international trade.
o Pegged exchange rate regimes and pegged with bands exchange rate regimes you should consider the possibility of currency crises in relation to the pegged with bands
currency regimes and should consider an actual currency crisis such as the 1992 Black
Wednesday Crisis for the pound and its membership of the ERM.
o Single currencies in relation to single currencies you should consider the pros and cons of the Euro, you should bring in the Optimal Currency Area argument, and you
should in particular consider whether a nation like Greece in the aftermath of the
2008 Financial Crisis suffered more than it would have if it had not been a part of the
Eurozone (due to its inability to devalue its currency or implement a looser monetary
policy) and you should also consider whether the ECB has reponsed adequately to the
economic challenges of the current coronavirus crisis (i.e. should the ECB be
implementing a looser monetary policy in particular right now). You should consider
whether a one size monetary policy does fit all.
Report (40%)
You are asked to develop and write a final report to assess the case study of the transition to electric
mobility and its effects in global economics. Your work should come with in-depth reasoning and
justification with well founded facts, events, figures and academic arguments. Please also refer to
authors, models, themes and concepts learned in the course. You may define, evaluate and apply
these when needed. Critical thinking is welcomed when justyfiying your alternatives and answers.
Please read the following case study summary about the 2019 edition of the Global EV Outlook,
which is the flagship publication of the Electric Vehicles Initiative (EVI) within the IEA (International
energy agency), at the 10th Clean Energy Ministerial (CEM) meeting that was held in Vancouver on 27
May 2019.
Electric car deployment has been growing rapidly over the past ten years, with the global stock of
electric passenger cars passing 5 million in 2018, an increase of 63% from the previous year. Around
Stas Nepomnyashchiy
45% of electric cars on the road in 2018 were in China a total of 2.3 million compared to 39% in
2017. In comparison, Europe accounted for 24% of the global fleet, and the United States 22%.
Table 1. Global electric car sales and market share, 2013-18
The number of charging points worldwide was estimated to be approximately 5.2 million at the end
of 2018, up 44% from the year before. Most of this increase was in private charging points, accounting
for more than 90% of the 1.6 million installations last year.
Electric mobility is expanding at a rapid pace. In 2018, the global electric car fleet exceeded 5.1
million, up 2 million from the previous year and almost doubling the number of new electric car sales.
The Peoples Republic of China remains the worlds largest electric car market, followed by Europe
and the United States. Norway is the global leader in terms of electric car market share.
Policies play a critical role. Leading countries in electric mobility use a variety of measures such as
fuel economy standards coupled with incentives for zero- and low-emissions vehicles, economic
instruments that help bridge the cost gap between electric and conventional vehicles and support for
the deployment of charging infrastructure. Increasingly, policy support is being extended to address
the strategic importance of the battery technology value chain. Policies continue to have a major
influence on the development of electric mobility. EV uptake typically starts with the establishment
of a set of targets, followed by the adoption of vehicle and charging standards. An EV deployment plan
often includes procurement programmes to stimulate demand for electric vehicles and to enable an
initial roll-out of publicly accessible charging infrastructure. Fiscal incentives, especially important as
long as EVs purchase prices are higher than for ICE vehicles, are often coupled with regulatory
measures that boost the value proposition of EVs (e.g. waivers to access restrictions, lower toll or
parking fees) or embedding incentives for vehicles with low tailpipe emissions (e.g. fuel economy
standards) or setting zero-emissions mandates. Policies to support deployment of charging
infrastructure include minimum requirements to ensure EV readiness in new or refurbished buildings
and parking lots, and the roll-out of publicly accessible chargers in cities and on highway networks.
Adoption of standards facilitates inter-operability of various types of charging infrastructure.
Table 2. EV-related policies in selected regions
Technology advances are delivering substantial cost cuts. Key enablers are developments in battery
chemistry and expansion of production capacity in manufacturing plants. Other solutions include the
redesign of vehicle manufacturing platforms using simpler and innovative design architecture, and the
application of big data to right size batteries. Technology developments are delivering substantial cost
reductions. Advances in technology and cost cutting are expected to continue. Key enablers are
developments in battery chemistry and expansion of production capacity in manufacturing plants. The
dynamic development of battery technologies as well as recognition of the importance of EVs to
achieve further cost reductions in the broad realm of battery storage has put the strategic relevance
of large-scale battery manufacturing in the limelight of policy attention.
Other technology developments are also expected to contribute to cost reductions. These include the
possibility to redesign vehicle manufacturing platforms using simpler and innovative design
architecture that capitalise on the compact dimensions of electric motors, and that EVs have much
fewer moving parts than ICE vehicles. As well as the use of big data to customise battery size to travel
needs and avoid over sizing the batteries, which is especially relevant for heavy-duty vehicles.
The private sector is responding proactively to the policy signals and technology developments. An
increasing number of original equipment manufacturers (OEMs) have declared intentions to electrify
the models they offer, not only for cars, but also for other modes of road transport. Investment in
battery manufacturing is growing, notably in China and Europe. Utilities, charging point operators,
charging hardware manufacturers and other stakeholders in the power sector are also increasing
investment in the roll-out of charging infrastructure. This takes place in an environment that is
increasingly showing signs of consolidation, with several acquisitions by utilities and major energy
companies.
Other developments to induce continued cost cuts include options to redesign vehicle manufacturing
platforms to use simpler and innovative design architecture, taking advantage of the compact
dimensions of electric motors and capitalising on the presence of much fewer moving parts in EVs
than in ICE vehicles. This is in line with a recent statement from Volkswagen concerning the
development of a new vehicle manufacturing platform to achieve cost parity between EV and ICE
vehicles. Adapting battery sizes to travel needs (matching the range of vehicles to consumer travel
habits) is also critical to reduce cost by avoiding oversizing of batteries in vehicles. For example,
instruments allowing real-time tracking of truck positioning to facilitate rightsizing of batteries. Close
co-operation between manufacturers to design purpose-built EVs are not only relevant for freight
transport, but also in order to meet range, passenger capacity and cargo space requirements for
vehicles used in shared passenger fleets (e.g. taxis and ride-sharing).
Technology is progressing for chargers, partly because of increasing interest in EVs for heavy-duty
applications (primarily buses, but also trucks). Standards have been developed for high-power
chargers (up to 600 kilowatts [kW]). There is growing interest in mega-chargers that could charge at 1
megawatt (MW) or more (e.g. for use in heavy trucks, shipping and aviation).
Private sector response to public policy signals confirms the escalating momentum for
electrification of transport. In particular, recent announcements by vehicle manufacturers are
ambitious regarding intentions to electrify the car and bus markets. Battery manufacturing is also
undergoing important transitions, including major investments to expand production. Utilities,
charging point operators, charging hardware manufacturers and other power sector stakeholders are
also boosting investment in charging infrastructure. The private sector is responding proactively to
the EV-related policy signals and technology developments. Recently, German auto manufacturers
such as Volkswagen announced ambitious plans to electrify the car market. Chinese manufacturers
such as BYD and Yutong have been active in Europe and Latin America to deploy electric buses.
European manufacturers such as Scania, Solaris, VDL, Volvo and others, and North American
companies (Proterra, New Flyer) have been following suit. In 2018, several truck manufacturers
announced plans to increase electrification of their product lines.
Battery manufacturing is undergoing important transitions, notably with increasing investment in
China and Europe from a variety of companies, such as BYD and CATL (Chinese); LG Chem, Samsung
SDI, SK Innovation (Korean) and Panasonic (Japanese). This adds to the already vast array of battery
producers, which led to overcapacity in recent years, and confirms that major manufacturers have
increased confidence in rising demand for battery cells, not least because major automakers such as
BMW, Daimler and Volkswagen are looking to secure supply of automotive batteries.
Utilities, charging point operators, charging hardware manufacturers and other stakeholders in the
power sector are increasing investment in charging infrastructure. This is taking place in a business
climate that is increasingly showing signs of consolidation, with several acquisitions from utilities as
well as major energy companies that traditionally focus on oil. This covers private charging at home,
publicly accessible chargers at key destinations and workplaces, as well as fast chargers, especially on
highways. Examples of investments covering various types of chargers come from ChargePoint, EDF,
Enel (via Enel X), Engie (via EV-Box). Some utilities (e.g. Iberdrola), automakers and consortia including
auto industry stakeholders (e.g. Ionity) focus mostly on highway fast charging.
The projected EV stock in the New Policies Scenario would cut demand for oil products by 127
million tonnes of oil equivalent (Mtoe) (about 2.5 million barrels per day [mb/d]) in 2030, while
with more EVs the in the EV30@30 Scenario the reduced oil demand is estimated at 4.3 mb/d.
Absent adjustments to current taxation schemes, this could affect governments tax revenue base
derived from vehicle and fuel taxes, which is an important source of revenue for the development and
maintenance of transport infrastructure, among other goals. Opportunities exist to balance potential
reductions in revenue, but their implementation will require careful attention to social acceptability
of the measures. In the near term, possible solutions include adjusting the emissions thresholds (or
the emissions profile) that define the extent to which vehicle registration taxes are subject to
differentiated fees (or rebates), adjustments of the taxes applied to oil-based fuels and revisions of
the road-use charges (e.g. tolls) applied to vehicles with different environmental performances. In the
longer term, gradually increasing taxes on carbon-intensive fuels, combined with the use of location-
specific distance-based approached can support the long-term transition to zero-emissions mobility
while maintaining revenue from transport taxes. Location-specific distance-based charges are also
well suited to manage the impacts of disruptive technologies in road transport, including those related
to electrification, automation and shared mobility services.
The EV uptake and related battery production requirements imply bigger demand for new materials
in the automotive sector, requiring increased attention to raw materials supply. Traceability and
transparency of raw material supply chains are key instruments to help address the criticalities
associated with raw material supply by fostering sustainable sourcing of minerals. The development
of binding regulatory frameworks is important to ensure that international multi-stakeholder co-
operation can effectively address these challenges. The battery end-of-life management including
second-life applications of automotive batteries, standards for battery waste management and
environmental requirements on battery design is also crucial to reduce the volumes of critical raw
materials needed for batteries and to limit risks of shortages.
Absent adjustments to current transport-related taxation schemes, the increasing uptake of electric
vehicles has the potential to change the tax revenue base derived from vehicle and fuel taxes.
Gradually increasing taxes on carbon-intensive fuels, combined with the use of location-specific
distance-based charges can support the long-term transition to zero-emissions mobility while
maintaining revenue from taxes on transportation.
Questions to answer in your report (10% each):
The electric car is an innovation that will be a high disruptive change and that will have an important
effect into the global economics and the geopolitical international relations. As you know, petroleum
is a key driver for geopolitics and an innovation from the technological point of view can imply
different global economics relations and geopolitics relations. Please answer the following questions
based on the previous text
1) What will be the effects of the transition to electric mobility on the oil market (demand, price, supply, ). What will be the economic impacts and consequences in the worlds top oil
producers?
2) What type of trading and economic policies should be developed and promoted by the economic blocs (BRICS, EU, ) to enhance this transition and prospect for their enhanced
growth? How will this transition impact into their trade balances? How will this transition
affect the exchanges rates of the main world currencies?
3) What will be the effects on the multinational automotive companies and their international operations? How should they react to this disruptive innovation in order to adapt to this
transition? How will this innovation affect their 3 main types of foreign investments (vertical,
horizontal and conglomerate)?
4) How the international relations could be changed because of this disruptive innovation and its international consequences? Do you consider these new international relations could add new
values for the society so the corporate social responsibility can be developed and it can imply
a positive impact into society welfare?
Formalities:
Wordcount: From 2000 to 3000 words. Cover, Table of Contents, References and Appendix are excluded of the total wordcount. Font: Arial 12,5 pts. Text alignment: Justified. The in-text References and the Bibliography have to be in Harvards citation style.
Assignment Launch: Week 10.
Submission: Week 13 Via Moodle (Turnitin). Submission will be accepted all Week 13: From the
4 th
to the 10 th
of May.
Weight: This task is a 40% of your total grade for this subject.
Outcomes: This task assesses the following learning outcomes:
Develop a complex understanding of the main concepts of international economics and how to apply them.
Understand and analyze the different global economic theories.
Rubrics:
Exceptional
90-100
Good
80-89
Fair
70-79
Marginal Fail
60-69
Theoretical
analysis
(30%)
Student
effectively
employs a
variety of
relevant
theoretical
paradigms/mod
els and data for
analysis.
Student
engages with
theory/data in
a critical
manner.
Student
employs some
relevant
theoretical
paradigms/mod
els and data for
analysis (a few
key aspects
might be
missing).
Student makes
an attempt to
engage with
theory/data in
a critical
manner.
Student
employs a
limited range of
theoretical
paradigms/mod
els and/or data
for analysis
(although some
key aspects
might be
missing).
Student may be
unsuccessful in
attempts to
engage
critically with
theory/data.
Student employs
insufficient/irrelev
ant theoretical
paradigms/model
s and/or data for
analysis.
Student makes no
attempt to engage
with theory/data
in a critical
manner.
Critical
evaluation
(30%)
Student
effectively
engages in
critical
evaluation of all
aspects
presented in
the brief.
Student makes
a good attempt
at engaging in
critical
evaluation of
most aspects
presented in
the brief.
Student makes
a fair attempt
at engaging in
critical
evaluation of
some aspects
presented in
the brief
(argument
might be
weak).
Student makes an
insufficient
attempt to
critically evaluate
aspects presented
in the brief.
Critical
discussion &
formulation
of proposals
(30%)
Student
effectively
leads discussion
towards strong
theory/data-
driven
proposals.
Student makes
a good attempt
at leading
discussion
towards
theory/data-
driven
proposals.
Student makes
a fair attempt
at leading
discussion
towards
theory/data-
driven
proposals.
Student fails to
lead discussion
towards relevant
proposals.
Communicati
on
(10%)
Student
includes all
relevant
sections,
meeting
professional
standards of
presentation.
Correct
referencing
format.
Student
includes all
relevant
sections, but
falls short of
professional
standards of
presentation.
Largely correct
referencing
format.
Student
includes most
relevant
sections, but
falls short of
professional
standards of
presentation.
Some incorrect
referencing.
Student fails to
submit several
relevant sections
and/or falls
significantly short
of professional
presentation
standards. Largely
incorrect
referencing
format.
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Biology
Business & Finance
Chemistry
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Geography
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English
Environmental science
Spanish
Government
History
Human Resource Management
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Law
Literature
Mathematics
Nursing
Physics
Political Science
Psychology
Reading
Science
Social Science
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