Saturday, July 06, 2019

Trumping the markets


Donald Trump has conducted trade and tariff skirmishes with Europe, China, Canada and Mexico, and has done his best to stop oil production in Venezuela and Iran. These campaigns of Tweets and executive orders have impacted stock markets, with share prices rising or falling according to the latest presidential dictate. Before running for office as president, Trump’s career had been that of a confidence trickster. He constantly managed to over-sell himself and swindled his way into more wealth than he had started out with. After a lifetime on the lookout for profits, could this opportunity be passed by? Imagine an investment fund in some tax haven receiving coded orders to buy or sell before a White House announcement or a nocturnal Twitter feed. Since January 2017, and especially over the last year or so, that would have been immensely profitable, a sure gain every time. Going a step further, this could be the driving force behind the president’s commercial and diplomatic “strategy”. Restricting the production and sale of oil by Iran and Venezuela favours the production of shale, offshore and arctic oil in the US. Tariffs on imports and the retaliatory measures they incur favour some US companies and disadvantage others. They tend to reduce economic growth, and stock market values react promptly. With foreknowledge, president Trump’s seemingly erratic foreign policies could be used as a perfect speculative tool.

Monday, July 01, 2019

Life on Earth has an improbable future



Polar ice and arctic permafrost are melting much faster than predicted. That means the amount of additional carbon dioxide is already sufficient to upset the previous balance of temperatures between winters and summers. Both have warmed up and are disrupting global weather patterns. The oceans and the atmosphere, carrying heat from the Tropics to the Poles, are hotter than they were. And the warming of air and sea currents has necessary consequences. Those extra calories melt ice, but they also result in more evaporation and increase the air’s capacity to retain water vapour. Denser clouds bring more rain and thunderstorms. Clouds maintain hot air in the lower atmosphere, but they have an albedo effect and partly reflect incoming sunlight. Storms, hail and torrential rain are being experienced more frequently with greater intensity, as are suffocating heat and drought. Cloudless skies for long periods are also plaguing parts of the planet.

Climatic conditions are changing everywhere, with catastrophic results. Wildfires are burning, rivers are bursting their banks and crops are failing from too little or too much water. This is no longer a forecast for the end of the century, it is happening right now, relentlessly. As nothing has been done to stop, or even curb, greenhouse-gas emissions – the consumption of coal, oil and gas is in fact still increasing – the planet is becoming a disaster zone. Ultimately, no one will be spared. The lifestyle imagined and constructed during the 19th and 20th centuries is proving to be a mistake that is destroying life on Earth at an accelerating rate. Some species may survive the combined disruption of humanity’s toxic trash, from gases and plastics to radioactivity, and humans, with their capacity for adaptation thanks to technology, will probably be among the last survivors. After all, with rudimentary tools and weapons made from native materials, homo sapiens managed to live comfortably in the Tropics, around the Arctic Circle and in the space between them, in forests and steppes, up mountains, down valleys and on seashores. Animals and plants are not so adaptable. They need time to evolve, as they cannot mediate their environment with clothes and shelters, weapons and tools. And, if plants and animals disappear, humans with all their technology will probably not survive either.

With a few exceptions, humans are completely dependent on infrastructure. Road and rail, airways and sea routes, pipes, cables and wires make life possible. This complex network does not resist well to extreme weather conditions. As these increase and multiply, repairing the damages will be harder and harder to insure. When a snow storm makes roads impracticable and brings down power lines, rural populations manage to hold out until the roads are cleared and the supply of electricity is restored. As this happens frequently they are prepared. They have stocks of food and fuel, and a generator. Cut off from the world and without electricity, an urban population would not last long. As stocks are replenished on a daily basis, they would quickly run out and the city would plunge into chaos or come under the rule of martial law. And if no relief was forthcoming most would die. When infrastructure breaks down, towns and cities are the most vulnerable. But, in the developed world, even rural communities are largely dependent on outside supplies. The Amish would fare better than most.

How much of the destruction by elemental forces can continually be repaired? As the frequency and extent of the destruction increases, some places will become uninhabitable. This has already been happening in the subtropical regions because of repeated, prolonged droughts and floods, has resulted in migrations. This, alongside numerous armed conflicts, is multiplying refugees who are facing increased difficulties in finding safe havens. So far this has been a rural exodus from fairly sparsely populated regions, and has largely increased the numbers of urban poor. But what will happen when towns and cities are no longer supplied, and where will those refugees go to? As the planet becomes less hospitable and transport systems break down, sustaining urban concentrations will be increasingly difficult. Their vast daily intakes of food, fuel, electricity and water cannot be interrupted without dire and immediate consequences. Because of their artificiality, cities are particularly vulnerable to disruptions in supplies. So far rural communities have suffered the most from flooding, wildfires and drought, whereas the flows in and out of cities have barely been perturbed. But ever more extreme and violent meteorological events will change that. And the warning is out, the change could be quite sudden. All complex systems have a tipping point. For atmospheric temperatures and carbon dioxide levels, absorption by the oceans is reaching the critical stage where heat is still absorbed but the sea’s increased surface temperature reduces its capacity to dissolve carbon dioxide, some of which goes back into the atmosphere.

Life on planet Earth is being battered by storms, swept away by floods and roasted by intense heat waves, and 477 of the world’s largest investors (1) are asking governments to insure their profits. They have spent the last decades profitably destroying the environment, with considerable public subsidies, and now that things are turning nasty they are demanding more public assistance. It seems the taxpayer will contribute ever more generously to private profiteering. This plea from Big Business is a sign that climate disruption is beginning to impact profit margins, and insurers are probably the first concerned. As usual, corporations intend passing the bill for the clean-up to governments. But governments are not just broke, they are heavily in debt and are in no condition to pay. What they can and should do is oblige those 477 and all the others to supply the means for a turn around that may be able to avoid the worst predicted outcomes. Except that governments are accountable to those people and – apart from elections when even pies in the sky are promised – have little if any interest in the people they govern. That will have to change before anything else does. If the planet and its inhabitants are to be saved, people will have to take control of their destiny, and not leave it in the hands of a cluster of freebooters. What is far less certain, however, is the capacity of plastic and fossil fuel addicts to bring about such a revolution. As they are also addicted to video screens, they are more likely to follow some vociferous demagogue off a cliff.