The Federal Reserve Holds Off On Interest Rate Hike

The Federal Reserve announced on Wednesday that it is leaving its benchmark interest rate unchanged, a move designed to encourage recently robust job creation to continue.

The decision by the Federal Open Market Committee, the central bank panel charged with adjusting its influential federal funds rate, means Americans will likely avoid paying higher interest rates on their mortgages, car payments and other loans.

The influential federal funds rate, or the interest rate banks charge one another for overnight lending, will remain at a target range of 0.25 to 0.5 percent. The Fed raises the interest rate to head off rising price inflation by slowing the pace of job market growth.

“With appropriate monetary policy, we continue to expect moderate economic growth, further labor market improvement and a return of inflation to our 2 percent objective in 2-3 years,” Federal Reserve Chairwoman Janet Yellen said at a press conference announcing the decision. “However, global economic and financial developments continue to pose risks.”

The last time the Fed raised the federal funds rate was in December, the first time since the 2008 financial crisis. It is a testament to the tenuous state of the economic recovery eight years later that the Fed is still exercising so much caution.

Wednesday's decision was widely expected, in light of modestly gloomier global economic conditions and lackluster U.S. wage growth.

As investors have become more anxious, credit has become harder to obtain in the United States. The tighter lending had the same depressing effect on the economy as a 1 percentage point Fed rate hike, according to economists at Goldman Sachs.

The dollar also continues to rise relative to foreign currencies, making U.S. exports less competitive.

And while the U.S. economy continues to produce jobs consistently, wages declined in February.

Yellen acknowledged that the robust job market had yet to produce significant wage growth.

“I must say, I do see broad-based improvement in the labor market and I’m somewhat surprised we’re not seeing more of a pickup in wage growth,” she said. “It is one of the factors that suggests to me there is continued slack in the labor market.”

Inflation is finally approaching the Fed’s 2 percent target, however, indicating that the Fed may soon have the evidence it needs to raise the interest rate when the FOMC meets again in April.

The price of consumer goods, excluding food and energy, rose 1.7 percent growth in the 12 months ending in January, according to the price index favored by the Fed.

SAUL LOEB/Getty Images

Federal Reserve Chair Janet Yellen speaking at a press conference on Wednesday after the Fed announced that the benchmark interest rate will not rise.

Indeed, all ten sitting members of the FOMC, as well as the seven regional Federal Reserve bank presidents not on the committee, believe economic conditions will allow for an interest rate hike before the year's end.

The 17 officials' predictions, however, released in a survey known as the "dot plot," show greater pessimism about the economy than when the Fed last met. The officials' median projection is that the Fed will raise the interest rate to 0.9 percent by the end of 2016, compared with the December 2015 median projection of 1.4 percent.

One sitting FOMC member, Kansas City Federal Reserve Bank President Esther George, voted against the decision, favoring a 0.25 percent rate hike at this time.

In a week dominated by presidential election and Supreme Court nomination news, the Fed’s announcement stands to draw only moderate attention.

But the lack of a rate hike, which gives the economy more leeway to grow unencumbered, is probably good news for Hillary Clinton’s presidential candidacy. The putative Democratic front-runner is poised to benefit from a positive economic outlook, since voters are more likely to return an incumbent party to power if the economy is doing well.

Public opinion polls and the populist electoral mood in both political parties suggest that voters still do not feel their economic fortunes palpably improving, despite a record streak of job growth. Many analysts argue that the lack of a political upside to the high-performing economy is because Americans are, on average, not making much more money.

That is why progressive economists and activist groups have been calling on the Fed to allow unemployment to dip even lower, so employers will begin raising wages more significantly in order to compete for workers.

The progressive Fed Up coalition, comprising groups representing low-income workers and communities of color, is calling on the Fed not to raise the benchmark interest rate at all in 2016.

“The Fed needs to connect the dots with reality: involuntary part-time work is still almost double pre-recession levels, labor force participation rates are still low, Black unemployment is more than double white unemployment and Latino unemployment and underemployment is still at crisis levels, and wage growth is almost non-existent,” Dushaw Hockett, executive director of SPACES, a Washington, D.C. community group that is part of the Fed Up coalition, said in a statement.

“Rather than slowing down progress, the Fed should do all it can to facilitate growth in 2016 and beyond.”

Etsy's New Parental Leave Policy Is Basically Perfect

Etsy just increased the amount of parental leave it offers. Starting April 1, all workers at the Brooklyn-based company known for selling hipster-precious, hand-crafted goods will be able to take 26 weeks off after the arrival of a child via birth or adoption. 

That’s a big increase from the company's old policy, and follows examples set by a bunch of other tech companies that are racing to improve benefits as the war for talent continues.

But what truly makes Etsy’s announcement notable? It's gender neutral. Men and women at the 800-person company will be eligible for six months leave and -- this is key -- Etsy will no longer give more time off to "primary" caregivers, a falsely neutral designation that companies effectively only apply to heterosexual women.

Etsy

Etsy's headquarters in the Dumbo neighborhood of Brooklyn.

Previously, Etsy gave "primary" caregivers 12 paid weeks off, and "secondary" parents five paid weeks.

"It was playing out in a gendered way," Juliet Gorman, Etsy’s director of culture and engagement, told The Huffington Post.

"Male employees read the policy and thought, 'I must only be eligible for secondary,'" she said, adding that there's no established definition of what constitutes a primary or secondary parent. 

The company is following on the heels of Netflix, Spotify and Facebook, which now offer men and women equal paid time off. The United States has no paid leave policy, but does guarantee 12 weeks of unpaid leave regardless of gender to some new parents.

Gorman pointed out that most millennials are raising their kids in dual-income households where the expectation is that both parents share responsibilities. Designating one of those parents the primary caregiver seemed like a "dated concept," she said.

Although she didn’t know how many Etsy workers fall into the millennial age bracket, Gorman said the company adheres to a "millennial ethic," which apparently means it has a progressive bent and is concerned about the well-being of its workers. Etsy also offers such benefits as six-week sabbaticals and paid time off to volunteer.

"Etsy, regardless of age, is a very kind of plugged-in, ear-to-the ground, socially progressive company," she said.

Of course, we don't know how Etsy's new policy will play out in real life. At Facebook, for example, new fathers still reportedly take about half the time off that's offered to them.

"In many places the idea of a man taking time off at all is stigmatized. For a man to say he’s a primary caregiver, it’s downright impossible," said Josh Levs, author of All In, a book that looks at how fathers are treated in the workplace.

Primary and secondary parent designations are basically just "coded language" that reinforces traditional gender stereotypes, Levs said. 

Using a policy based on these designations is harmful is a couple of ways. First, it puts women at a disadvantage at work, as colleagues and supervisors tend to either consciously or unconsciously expect them to stop prioritizing their jobs after the arrival of a child. This typically means that new mothers aren't promoted as much, or aren't asked to take on extra responsibilities like traveling. Indeed, one study found that women’s salaries decrease with every new baby they have. 

Men, on the other hand, see their incomes rise when they become fathers. However, they’re put on unequal footing at home, deprived of key bonding time with their children and the ability to provide support to their coparent. Men who take leave are less likely to have partners who suffer from depression, one study found.

A couple of years ago, Etsy CEO Chad Dickerson tweeted about taking a five-week paternity leave and encouraged other dads to follow suit.

@avleen @johngoulah @kellan CEOs & BODs should make leave not just acceptable but encouraged. Etsy BOD 100% supportive. Asked for baby pics.

— Chad Dickerson (@chaddickerson) November 7, 2014

Oh, and giving men and women different amounts of time off for caregiving -- beyond the time it takes a birthmother to heal from childbirth -- is considered discriminatory, said Peter Romer-Friedman, a Washington-based civil rights lawyer.

"Policies that give disproportionate amounts of parental leave are vulnerable to legal attack under sex discrimination laws," he said.

"Being a good dad" is now part of men's aspirations in addition to being tall & having a beard - E. Harðardóttir @IcelandUN #SharingtheCare

— MenCare Campaign (@MenCareGlobal) March 14, 2016

 

Levs knows this better than anyone. When he was working at CNN a few years ago, he tried to use the 10 weeks of parental leave his parent company Time Warner offered, but was told he wasn’t eligible. Men could get the 10 weeks if they adopted a child with their partner or used a surrogate, but fathers whose partners gave birth could only get two weeks paid time off. Ultimately, Levs filed a complaint against the company and Time Warner changed its rules.

Still, plenty of other firms hold fast to the "primary" caretaker concept, including Goldman Sachs, JP Morgan and Adobe.

When Levs asked Goldman if a heterosexual man with a wife who gives birth to a child would ever be eligible for paid leave, the company declined to comment. When HuffPost asked about this again recently, a Goldman spokeswoman said she didn’t have anything to add.

The Financial Crisis Film 'Boom Bust Boom' Falls Prey To The Big Problem It Addresses

Can a group of portly, middle-aged puppets explain the financial crisis?

They certainly can try.

In the new Terry Jones documentary, "Boom Bust Boom," which premiered Friday in New York City, the Monty Python comedian uses puppets, cartoons and interviews with real people to turn a difficult and often boring subject into a lively lesson on history and the human biases that drive huge swings in the economy. Think of it as a whimsical version of "The Big Short." 

Set for a national release on March 18, the film shows how markets can boom and bust with regularity. Over the course of centuries, we see this cycle play out over and over, and yet, before each bust, we learn how people convince themselves this time is different. It's frustrating. Why can't humans just get it right? 

Unfortunately, the film falls prey to its own thesis, almost shutting out the voices of anyone who isn't a middle-aged white man, leading to a narrow view of this complex topic. It's not very helpful for thinking critically about how we might change things, and perhaps that's why the film offers few solutions.

"Boom Bust Boom" is at its best when illustrating some of history's worst economic meltdowns. It has informative and fun depictions of the 1637 tulip mania in the Netherlands, the crash of the South Sea Company in early 18th-century Britain, and the 19th-century speculation in (and fantastic crash of) British railroad stock. It also describes how the heights of speculation in the 1920s led to the lows of the Great Depression, and, finally, the hard lessons of the 2008 mortgage crisis. Every time is the same: Euphoria over rising prices leads to speculation, which ends with a crash.

Humans are not rational, the movie tells us. We are hardwired, from the time of our primate ancestors, to have certain biases and blind spots. When it comes to capitalism, those blind spots lead to financial crises. And when someone sees the issue clearly, they are often disregarded until long after it's too late.

The problem is, the film doesn't take the next step and ask why policymakers and economists continue to think the same way and follow the same patterns from one crisis to another.

Here's one reason: The world's top economists (and government officials) more or less all have the same background. They went to a handful of schools, studied under a few dozen of the same professors, have read the same books and mingle in the same circles. Oh, and, to a large extent, they're all white and male. That doesn't encourage diversity of thought. 

Neither does this film. I counted about a dozen puppets woven into the story, and nearly all of them depicted middle-aged (or older) white men. Activist-actor and Huffington Post blogger John Cusack makes several somewhat puzzling appearances in this movie, too. (No disrespect to Mr. Cusack.)  

Nick Rutter

Women and minorities are almost entirely left out of this film -- not unlike the way they've been left out of financial and economics professions. Yet, we know that women are slightly better at managing financial risk than men are. Study after study over the last five years has found that female financial managers consistently outperform their male peers. They think differently.

The two expert women the movie manages to talk to are Lucy Prebble, a playwright who once wrote a play about the collapse of Enron, and Laurie Santos, a Yale psychology professor who studies how monkeys make decisions. Neither have a background in economics, or in the 2008 crisis. 

But there is a long list of people -- who aren't white men -- who would have made great interview subjects for the filmmakers.

Where was Christina Romer, who wrote a paper in 2015 examining the impact of financial crises on advanced economies? Where was Brooksley Born, who warned against the danger of unregulated derivatives -- which ended up creating the 2008 financial crisis -- when she was head of the Commodity Futures Trading Commission in the 1990s? Where was Harvard economist Carmen Reinhart, who literally wrote a book called This Time is Different: Eight Centuries of Financial Folly? Where was Raghuram Rajan, India's top central banker, who warned of a potential financial crash way back in 2005, when he was working at the International Monetary Fund? 

If the world is to develop a framework for thinking differently about economics, it might help to start with more diverse sources.

4 Things You Need To Know About The Latest Jobs Report

The monthly jobs report came out on Friday, and things are pretty good overall.

The big headline numbers were great: The economy added 242,000 jobs in February, much higher than the 195,000 that economists estimated, and the unemployment rate remained at 4.9 percent, which is nice and low. 

But if you drill down into the data, the picture is a little murkier.

Here are four things we know about the economy from the details in this report:

1) Wages aren't growing much, and it's hard to say why.

Average hourly earnings were down by 3 cents in February, to $25.35. Year-over-year, wages are up about 2.2 percent. That's not great -- although, thanks to very low oil prices and low inflation, it's not terrible either. But it's worth asking why wage growth since 2010 hasn't been as robust as growth in previous recoveries. 

Shane Ferro/Huffington Post

2) Nonetheless, people are coming back into the labor force.

As we said earlier, the economy added 242,000 jobs this month. But perhaps more importantly, details in the household survey show that more than 500,000 entered the labor force by starting to look for work again. In order to be officially unemployed, a person must not have a job and must be looking for work. Discouraged workers, who have given up looking for jobs, aren't counted as part of the labor force. It's a sign of a healthy economy when those people start looking for jobs again, even if they don't find work immediately.

3) But the unemployment rate for blacks is twice the unemployment rate for whites.

The unemployment rate for whites in the United States is 4.3 percent. For blacks, it's 8.8 percent. This is an economic dynamic that has been persistent since the Labor Department started tracking unemployment by race back in the 1970s. The chart below is not really America's best look: 

Shane Ferro/Huffington Post

There's a huge racial disparity in the unemployment rate in this country.

4) There is a lot of growth in low-wage industries.

The retail industry added 55,000 jobs last month, and food service added 40,000. These have been some of the strongest growth industries over the last few years, which means the economy is adding a lot of low wage, service sector jobs. That said, the economy also added a lot of health care (38,000) and construction (19,000) jobs in February, which tend to pay quite well. 

How Americans Get Duped Into Buying Endangered Animal Items

You might be contributing to the decimation of endangered animal species without even realizing it. 

When illegal ivory, tiger pelts or rhino tusks make their way to markets and e-commerce sites, traffickers may try to conceal how the products were obtained. They'll use terms like "bone" or "walrus tusk" to describe ivory, duping retailers and customers alike. What's more, uninformed shoppers or tourists might not know that tortoiseshell and certain types of coral or wood are also part of this illicit trade network, which is estimated to be worth between $50 and $150 billion per year. 

Major companies across the e-commerce, retail and travel industries are now banding together to raise awareness and reduce the amount of illegal wildlife products Americans buy. 

Google, eBay, Etsy, JetBlue and Tiffany & Co are among the 16 firms committing to eliminating these products from their supply chains, the U.S. Wildlife Trafficking Alliance and the Obama administration announced Thursday.

“A lot of Americans are just not aware that they could be buying illegal products and adding to this global problem,” David J. Hayes, chair of the alliance and former chief operating officer at the Department of Interior, told The Huffington Post.

Each company will take action within its own sphere of commerce. Some will warn customers about the impacts of illegal wildlife products, while others will flag items on sale that potentially violate wildlife policies or provide educational videos on sustainability for travelers.

ChinaFotoPress via Getty Images

Illegal ivory and ivory products confiscated in China. 

Several online retailers have already taken steps to block harmful items from their sites. eBay and the online bidding platform LiveAuctioneers.com have banned illegal ivory sales. Etsy has banned all ivory and prohibited sellers to list goods made from threatened or endangered animal parts. 

"It's hard for the consumer to know what's legal and what's illegal, and it can be hard for the retailer to know," said Beth Allgood, U.S. campaigns director for the International Fund for Animal Welfare, a conservation nonprofit that has worked with eBay, Etsy and LiveAuctioneers to remove illegal ivory listings. "We can be partners to retailers who don't know all the regulations."

For JetBlue, the awareness campaign will primarily inform passengers traveling to and from the Caribbean and Latin America, said Sophia Mendelsohn, JetBlue’s head of sustainability. In videos to be shown on JetBlue’s flights, residents and small business owners from the region will speak about how sustainable tourism practices can support wildlife diversity.

“We want to stop this issue at its root cause,” Mendelsohn told HuffPost. “We’re going to cut out unwitting demand so there’s less profit in drawing out these natural resources, whether it’s for tech, necklaces or special meals” at local restaurants.

Lam Yik Fei via Getty Images

Leopard skins seized by Hong Kong customs officials.

Other corporate partners that have pledged to work with the alliance include Ralph Lauren and Royal Caribbean Cruises. The Association of Zoos and Aquariums will exhibit seized illegal wildlife products in its parks to highlight the threats posed to various species. Discovery Communications will produce virtual reality content focusing on trafficking and conservation. 

The household brands committed to this new effort will work to establish best practices for smaller names in the travel, e-commerce and retail industries.

“These companies are accepting industry leadership and making sure smaller ones aren’t involved in wildlife trafficking,” Hayes said. “These are true industry-wide efforts.”

Stockbyte via Getty Images

An illegal haul of rhino horn.

Awareness of wildlife conservation has been growing for some time. President Barack Obama issued an executive order to implement a wildlife taskforce in 2013. The corporate alliance announced this week is a result of that effort.

Public interest in the issue spiked last year following the killing of Cecil the Lion. The backlash against the Minnesota dentist who shot down the lion in Zimbabwe heightened scrutiny of trophy killings and spurred action from the travel industry.

American Airlines, United Airlines and Delta Airlines announced last summer that they would ban transport from Africa of the “big five” game animals -- lion, elephant, rhino, leopard and buffalo.

ASSOCIATED PRESS

A lion in an enclosure of the Lion Park, in Johannesburg, South Africa.

Warren Buffett Is Wrong About Climate Change

Warren Buffett doesn't want you to know how his empire is preparing to deal with the disastrous effects of climate change. In fact, he said in a letter released Saturday, he isn't exactly sure this whole "climate change" thing is real, anyway.

In his annual letter to investors in his conglomerate Berkshire Hathaway, the billionaire investor fought back against a proposed shareholder resolution demanding his insurance subsidiaries measure and disclose the risks that climate change poses to their business and how the company is responding to the threat. Buffett compared fears over climate change to the brouhaha around apocalyptic Y2K predictions.

“It seems highly likely to me that climate change poses a major problem for the planet,” the 85-year-old wrote in the letter, released Saturday morning. “I say ‘highly likely’ rather than ‘certain’ because I have no scientific aptitude and remember well the dire predictions of most ‘experts’ about Y2K.”

Insurance companies take on losses after major weather disasters (think droughts, Hurricane Katrina and other big storms), so it makes sense they'd be concerned about climate change. If that's true, why would Buffett say he's not so sure this is real? Because skepticism is better business.

Buffett isn’t denying climate change, but rather using language climate deniers feel comfortable with and will likely cite in future attempts to derail environmental policy. Climate change affects Buffett's business: He owns a Nevada utility that has fought and won against solar development in that state, and his railroad, Burlington Northern, in large part depends on the demand for coal and oil.

Buffett argues in favor of seeing climate change as a likely risk to the world, but against the need for more oversight, transparency or regulation of his companies. It’s a position he’s taken before -- Buffett argued against designating reinsurers, of which he owns the world’s fifth-largest, as too-big-to-fail institutions. Though he said he never spoke directly to regulators about the issue, he made his views public. Regulators, thus far, have agreed.

Why Buffett's Words Matter

Markets, governments and companies aren’t properly pricing the risk of climate change. For instance, are beachfront homes in low-lying areas as valuable as their owners believe? Experts reckon that only once markets and others attach a price to the threat of climate change will the rest of the world finally move to limit the potential consequences. If insurers -- which must grow their assets in order to make good on their guarantees -- measure the potential losses they could incur as a result of climate change, they can then price that risk. Then everyone else could follow.

Buffett's views against disclosure put him in sharp disagreement with Bank of England Governor Mark Carney, who has said that financial markets can help limit the effects of climate change, but only if companies -- such as insurers -- supply the kind of information that Buffett doesn't want to disclose. 

In September remarks to the insurance industry, the chief overseer of the world’s third-largest insurance sector warned about the numerous economic and financial risks posed by climate change. Carney urged companies, particularly insurers, to start taking seriously their responsibility to measure their potential losses. Their own solvency could be at stake, Carney warned.

Insurance companies invest their money in places like the stock market. But “stranded" oil, gas and coal reserves, left in the ground due to the world’s commitment to halt rising temperatures, could render related financial assets worthless. Or the disruption of trade resulting from an extreme weather event could affect related investments.

Cynthia McHale, director of the insurance program for Ceres, a nonprofit group that pushes investors to pay attention to the financial risks of climate change, said in an interview earlier this month that neither insurers nor their government overseers have a good handle on the risks that climate change poses to insurers’ various financial assets.

McHale compared the situation to the one faced by big banks in 2008, when few sufficiently realized the magnitude of potential losses from the U.S. property bust. 

Weathering Heights

Buffett's case against the resolution boils down to this: “Thinking only as a shareholder of a major insurer, climate change should not be on your list of worries.”

First, he said, his company can handle any possible losses thanks to rising premiums. Because insurance policies are typically written for one year and repriced annually, Buffett's company can hike premiums to better account for the heightened risk of climate change-driven losses.

Second, Buffett asserts that climate change has produced neither “more frequent nor more costly hurricanes nor other weather-related events covered by insurance.”

But eight of the 10 costliest hurricanes in U.S. history, in terms of insured losses, have occurred since 2000, according to the Insurance Information Institute. Nine of the 10 costliest floods in U.S. history, when measured by payouts from the federal government’s National Flood Insurance Program, also have occurred since 2000, according to the insurance group.

NOAA

The U.S. experienced five different types of extreme weather last year. 

Munich Re, the world’s biggest reinsurer, estimated that extreme weather events led to $510 billion in insured losses from 1980 to 2011.

Carney said that according to Lloyd’s of London, the world’s oldest insurance market, the roughly 8-inch rise in sea level at the tip of Manhattan since the 1950s increased the insured losses from Hurricane Sandy by 30 percent in New York alone.

PAUL J. RICHARDS via Getty Images

A house in Staten Island, New York, hit in Hurricane Sandy. Scientists say we should prepare for more weather events like the massive storm.

Insurance companies should care about climate change from a selfish perspective if they want to stay in business. Carney has warned that insurers that jack up premiums or exit markets after realizing the potential losses associated with climate change could unwittingly cause the value of their own assets to shrink.

He also warned about potential losses from claims on policies written by insurers. For example, insurance companies could be forced to make massive payouts if victims of climate change successfully hold accountable companies that contributed to it. He likened the situation to the one faced by U.S. insurers stung by tens of billions of dollars in losses from asbestos claims.

In fact, Carney said that as a result of recent weather trends, some now estimate that insurers are undervaluing their potential losses by as much as 50 percent.

Insurance companies caught unprepared for the effects of climate change could cause problems for government officials and put taxpayers at risk.

For example, governments may have to cover markets that insurers dump as a direct result of climate change, the Bank of England chief said, putting taxpayers on the hook.

Bloomberg via Getty Images

Mark Carney, the U.K.'s top central banker, says insurers may be undervaluing their potential risks by 50 percent. 

What Could Change If Insurers Opened Up About This Risk

Disclosing climate change information would improve policymaking, Carney said. It could make climate policy more like monetary policy, where officials who set interest rates often tinker with their stance based on markets’ reactions.

The Financial Stability Board, a global group of the world’s financial regulators, wants financial companies to disclose their risks, too.

Some state insurance regulators in the U.S. are demanding insurers take the threat posed by climate change into account when investing their customers’ money and underwriting insurance policies. Washington state’s insurance regulator, Mike Kreidler, has criticized some insurers for failing to take climate change risks seriously, arguing their own solvency was at risk.

Buffett sounded more alarmed by the prospect of climate change in 2007, when scientific evidence of the impacts of climate change was less well-understood. In his annual letter that year, Buffett wondered aloud whether the deadly and expensive hurricanes of 2004 and 2005 marked the first warning of a new type of climate.

“It would be a huge mistake to bet that evolving atmospheric changes are benign in their implications for insurers,” Buffett wrote in his letter.

He warned that it was “naïve” to think of Hurricane Katrina -- the costliest hurricane in U.S. history -- “as anything close to a worst-case event.”

“These could rock the insurance industry,” Buffett added.

 

Half Of New Cars Could Be Electric By 2040

Electric vehicles could make up half of all new car sales by 2040, as long as oil prices eventually increase, according to a study released Thursday by Bloomberg New Energy Finance.

The cost of the lithium-ion batteries that power electric vehicles is quickly decreasing, but sales suffered last year as oil slid below $30 per barrel, making gas-guzzling vehicles more affordable in the United States. If oil remains at rock-bottom prices, it could delay electric vehicles from becoming mainstream for at least the next four years.

“In a scenario where they become widespread in fleets and ride sharing scheme, new EV sales could reach 50% of new car sales by 2040,” Salim Morsy, senior analyst at BNEF, wrote in the study. “However, persistently low crude oil prices could also keep adoption as low as 25% by 2040.”

Electric vehicles currently make up about 1 percent of global annual car sales. Four major factors will determine whether they'll make up half of the market by 2040.

First, battery prices must continue to fall. This is likely to happen for a few reasons. Demand continues to be high, as more automakers release electric vehicles and the energy storage industry begins to pick up pace. To fill those orders, manufacturers are upping their production. Tesla, for example, is building a $5 billion factory in Nevada that will, at its peak, produce more lithium-ion packs per year than were created in the entire world in 2013.

“It’s very important, insofar as being a first move for establishing large-scale manufacturing assets globally,” Morsy told The Huffington Post on Wednesday. “But, relative to the install demand needed in the future to supply what we project to be demand, it is certainly not as important.”

Second, self-driving technology must become commercially viable. At the Consumer Electronics Show in Las Vegas last month, nearly every major automaker unveiled some kind of autonomous driving technology. And with good reason: Google is testing driverless, electric cars. Tesla just released a limited autonomous feature that allows its cars to steer themselves. Uber last year raided Carnegie Mellon University's robotics department, hiring away its top scientists to develop self-driving technology that will eventually replace its drivers. 

Analysts expect Tesla, Uber and other car companies to eventually own and operate fleets of autonomous vehicles. If they're advanced enough to drive themselves, they'll ideally be advanced enough not to use oil.

Third, oil prices need to bounce back. Unless the price of crude returns to $50 and $70, as some predict it will by 2020, electric vehicles are unlikely to exceed 5 percent of new sales in most markets for the next four years, Morsy said. Low price projections actually halve electric vehicles’ market share forecast. If current oil prices continue into the next decade, electric vehicles may only make up 25 percent of new car sales by 2040.

Fourth, the electric auto industry must overcome the fact that it’s navigating a combustion engine’s world. By 2030, BNEF expects charging ports to become standardized, much in the same way any vehicle on the road now can connect to a petrol pump at any gas station. Improved infrastructure -- and the normalization of plugging your car in nightly at home or at the office during the day -- will help the industry clear the range issue that has long dogged it. Just as no one likes having a dead smartphone, no one wants to be left with a car that runs out of battery.  

“By and large, by 2030, we think the infrastructure issues around charging EVs will be addressed,” Morsy said. “That means standardization around charging for vehicles -- at the moment, it’s not a standardized market -- as well as availability of charging points.”

Yet one of the biggest challenges to electric vehicle adoption may not be an economic headwind, but political sabotage. Last week, HuffPost reported that billionaire brothers Charles and David Koch are planning to launch a $10 million campaign aimed at once again killing the electric car. Still, at this point, the industry may be too far along.

Tesla Motors CEO Elon Musk, one of the most famous business leaders fighting to wean humanity off fossil fuels, summed it up nicely:

Sigh …https://t.co/VelOzAKIW6

— Elon Musk (@elonmusk) February 19, 2016