BCO221 GLOBAL ECONOMICS – Task brief & rubricsTask briefDescription: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 carspassing 5 million in 2018, an increase of 63% from the previous year. Around 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, 2013-18The number of charging points worldwide was estimated to be approximately 5.2million 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 1.6million 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 People’s Republic of China remains the world’s 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 regionsTechnology 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 world’s top oil producers? 2) What type of trading and economic policies should be developed and promoted by the economic blocs (EU, ASEAN…) or groups of countries (BRICS, N-11 …) 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 Harvard’s citation style.Assignment Launch: Week 10.Submission: Week 13 – Via Moodle (Turnitin). Submission will be accepted all Week 13: From the 4thto the 10th 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/models and data for analysis. Student engages with theory/data in a critical manner. Student employs some relevant theoretical paradigms/models 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/models 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/irrelevant theoretical paradigms/models 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. Communication (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.