Now or never

Your Balance of Newsletter focuses on the race to halt climate change. [View in browser]( [Bloomberg]( Signs everywhere are pointing to a now-or-never moment to act on climate change. The warming of the planet is unrelenting, while European Union leaders are rushing to compete with the ambitious US climate law and pressure is building on President Joe Biden to implement his agenda this year. Lauded as the biggest climate legislation in American history, the US Inflation Reduction Act depends on a host of other policies to succeed. Rules for vehicles, soot or smog need to be finalized this year to ensure they survive legal challenges and Republican opposition. EU leaders, meanwhile, are scrambling to stop businesses being lured to the US by billions of dollars in subsidies. Key reading: - [The Year That Seared Europe Ends as 5th Warmest on Record]( - [We Know 2022 Was Hot. Here’s What We Don’t Know About Global Warming]( - [Biden Nears Now-or-Never Point for Cementing New Climate Rules]( - [US Climate Disasters Racked Up $165 Billion in Damage in 2022]( - [EU Doubts Biden Will Make Europe-Friendly Tweaks to Climate Bill]( Yet it is noteworthy that EU nations have done better than expected in cutting greenhouse-gas emissions, and the bloc is expected to approve a more ambitious emissions target — a 57% cut by 2030 from 1990 levels, compared to a previous goal of 55%. The action is much needed. Last year ended as the fifth-warmest on record, EU Earth observation agency Copernicus said yesterday. The past eight years have been the hottest ever registered for the planet, with Europe heating up faster than anywhere else, though far from alone in witnessing the impact of climate change. Catastrophic floods killed at least 1,700 people in Pakistan, while drought plagued east Africa. Heat waves led to at least 20,000 deaths in France, Germany, Spain and the UK alone. In the US, climate disasters killed at least 474 people in 2022 and collectively racked up $165 billion in damages, the National Oceanic and Atmospheric Administration said. These events weren’t one-offs: In only the first days of January, unusually mild weather in Europe and a deluge in California point to more dramatic climate extremes. — [Laura Millan Lombrana]( Firefighters block a road after a storm in Carpinteria, California, on Monday. Photographer: Apu Gomes/AFP/Getty Images Click [here]( to listen to our Twitter space conservation today at 9am ET/2pm London about the riots in Brazil and the year ahead for Latin America. And if you’re enjoying this newsletter, [sign up here](. Global Headlines Document surprise | Biden said he was [surprised]( that classified documents were found in an office he used before he was elected. Congressional Republicans have promised an investigation of the episode, in which the president’s lawyers say a small number of classified documents were discovered on Nov. 2 in a locked closet. The records were reported the same day to the National Archives, which took possession of them the next morning. - The new Republican majority in the US House is readying a [fusillade of investigations]( into Biden, his family and his administration, upholding a key promise of the midterm election campaigns following Democrat-led inquiries into former President Donald Trump. Hard ground | Temperatures well below freezing in eastern Ukraine have hardened the ground, [opening a window]( for potential winter offensives by both Russian and Ukrainian forces. Yet, as [Marc Champion]( and [Alberto Nardelli]( report, military analysts say that while the shift from muddy to frozen terrain is important in enabling the use of heavy vehicles, it’s just one of many factors commanders would consider before risking a major new assault. - Follow our rolling coverage of the war [here](. China’s population likely [started shrinking]( last year for the first time in decades, a significant milestone that will have long-term repercussions for the economy. The government’s official data for the total number of births in 2022 — expected to be released next week — will probably show a record low of 10 million, according to independent demographer He Yafu. Increased provocation | China said it’s sending more [warplanes]( toward Taiwan due to the island’s “military collusion” with the US. The comments from the spokesman for China’s Taiwan Affairs Office today were an apparent reference to US lawmakers last month agreeing to a spending bill that included $2 billion in weapons funding for Taiwan next year and as much as $10 billion through 2027. Best of Bloomberg Opinion - [China Now Wants the World to Live With the Virus: Gearoid Reidy]( - [Electric Car Boom Can’t Slake US Thirst for Oil: Javier Blas]( - [On China, Congress May Just Be Its Own Worst Enemy: Mihir Sharma]( Baseless claims | Days after his supporters ransacked government buildings in protest against what they claimed was a “stolen” election, former Brazilian President Jair Bolsonaro shared a video of [voter fraud]( conspiracies on his Facebook account. While his post doesn’t comment on the claims, the person in the clip raises questions about the integrity of voting machines and alleges that Luiz Inacio Lula da Silva wasn’t legitimately elected to the presidency. - Read this account of how Bolsonaro found [refuge]( in Florida near “the most magical place on Earth.” The Supreme Federal Court building in Brasilia on Monday following an attack by Bolsonaro supporters. Photographer: Arthur Menescal/Bloomberg Explainers you can use - [Why Strike-Averse Britain Is Gripped by Labor Unrest]( - [How Vietnam’s Anti-Corruption Fight Keeps Expanding]( - [Why Northern Ireland Keeps the UK and Europe at Odds]( Army pact | The UK and Japan will allow their military forces to be deployed to one another’s nations, as Tokyo expands bilateral [cooperation]( with US allies amid concerns about China’s rise. The defense agreement to be signed today is the most significant deal of its type between the two countries in more than a century, and the first for Japan with a European nation. Tune into Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - Biden asked Treasury Secretary Janet Yellen in mid-December to [stay]( in her post, and she agreed, a White House official said, as the president prepares for cabinet changes. - Peru’s Congress confirmed President Dina Boluarte’s cabinet yesterday, passing a key test for her month-old administration that has faced [mass unrest]( and left roughly 40 dead. - Just two months after Prime Minister Anwar Ibrahim took power, one of his most important coalition allies is facing an internal leadership challenge that [risks upending]( Malaysia’s newfound stability. - South Africa has entered a critical phase of revamping its [sole nuclear plant]( that it needs to perform well to avoid record power cuts that are wreaking havoc on the economy. - A hacking campaign suspected to be linked to an Asian government [breached]( seven high-profile targets in Southeast Asia and Europe, including government and military agencies, the cybersecurity firm Group-IB said. And finally ... Mexican President Andres Manuel Lopez Obrador gave a 28-minute [monologue]( to answer a question at a news conference with Biden and Canadian Prime Minister Justin Trudeau in Mexico City yesterday, leaving his guests fiddling uncomfortably during his reply. Questioned about immigration, AMLO discussed malaria vaccines, scholarships for disabled children, his Mayan train project and TV crime dramas. He finally requested help for Mexican immigrants from Biden, who along with Trudeau spent the near-half hour staring politely at their lecterns, their feet and the sky. Biden, AMLO and Trudeau in Mexico City yesterday. Photographer: Alejandro Cegarra/Bloomberg Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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