The Global Heatwave Is About To Hit Your Wallet

Bloomberg - Rachel Morison | Marvin G Perez | Nicholas Larkin

Scorching weather across the globe makes fields too dry for crops, rivers too warm to cool power plants, and leaves wind turbines idle – and it’s pushing commodities prices higher

A combine harvester cuts a field of rapeseed in the U.K. Major crops are expected to be smaller due to dry conditions. Photographer: Bloomberg Creative Photos/Bloomberg

Commodity producers are having a summer to remember, for all the wrong reasons.
A heatwave across swathes of North America, Europe and Asia, coupled with a worsening drought in some areas, is causing spikes in the prices of anything from wheat to electricity. Cotton plants are stunted in parched Texas fields, French rivers are too warm to effectively cool nuclear reactors and the Russian wheat crop is faltering.
The scorching heat is extracting a heavy human cost – contributing to floods in Japan and Laos and wildfires near Athens. Relief from soaring temperatures, which topped 30 degrees Celsius (86 degrees Fahrenheit) in the Arctic Circle,  may not arrive for at least two weeks.
It’s a timely reminder of the vulnerability of global commodity markets to the changing climate, as human activity disrupts the behavior of plants, animals and the march of the seasons.

Grain Pain
Wheat prices surge to a three-year high as the heatwave hurts Europe's crop

Source: Euronext

The heat and lack of rainfall is pummeling crops across Europe as far as the Black Sea. Output in Russia, the world’s top wheat exporter, is set to fall for the first time in six years, while concerns continue to mount about smaller crops in key growers such as France and Germany. Wheat futures for December have jumped almost 10 percent in the past month in Paris, with prices this week reaching the highest since the contract started trading in 2015.
After years of bumper harvests, global output could drop this year for the first time since the 2012 to 2013 growing season. This could have political and social ramifications. Egypt, which relies on subsidized bread to feed its almost 100 million people, is already paying the highest price for its imports in more than three years.

French Power
High temperatures are forecast to continue in France, disrupting power plants

Source: The Weather Co. using GFS model

French farmers aren’t the only ones finding the weather too hot to handle. The country’s fleet of nuclear power plants is also suffering. Rivers have become too warm to effectively cool the reactors, and Electricite de France SA may be forced to cut output later this week at two stations. The hot weather also has forced a German coal-fired plant to curb operations and reduced the availability of some plants in Britain fired by natural gas.
France gets more than 70 percent of its power from 58 atomic stations and is a net exporter of electricity to neighboring countries. Any reductions in output would potentially boost prices across the continent.
The sultry conditions are also leaving wind turbines virtually at a standstill. In Germany, wind output over the past 10 days has been a third lower than the average for the year so far. Windmills are also becalmed in Spain, Italy, the U.K., Denmark and Sweden. Solar operators are enjoying the weather, but they can’t fill the gap left by wind and demand for natural gas is rising.
French and German day-ahead wholesale power is at the highest for the time of year for a decade, while in Britain they’re the most since at least 2009.

Texas Power Surge
Electricity prices surge as Texas heat smashes records

Source: Data compiled by Bloomberg

Over in Texas, prices are also jumping due to the heat. The northern part of the state smashed a 93-year-old daily temperature record last week, sending demand surging as people heeded advice to stay indoors and crank up their air conditioning. Wholesale prices for electricity secured a day in advance reached three-year highs, although they’ve since fallen as temperatures moderated.
Temperatures got so high that the National Weather Service was advising north Texas residents to avoid walking their dogs, lest they burn Fido’s paws. But for farmers in the west of the state, the drought was hurting even more than the heat.



The West Texas cotton belt – the world’s most productive area for the crop – is brown, baked, cracked and dusty. The dryness is so bad that close to half of the state’s crop is in poor or very poor condition, U.S. government data show. About 4.5 million acres of the fiber are planted in the region, 60 percent of which depends on rain because it isn’t irrigated.
"I lost everything in the dry land,” said Lloyd Arthur, a fourth-generation farmer in Crosby County. He’s not expecting to harvest anything from about a quarter of the 2,000 acres of cotton he sowed this season.

Stunted Crop
Cotton futures are up more than 10% this year on drought fears

  

Ron Harkey, the president and chief executive officer of the world’s largest cotton warehouse in Lubbock, expects to get 1.5 million bales from members of a growers cooperative in the area this year. That’s down from 2.5 million last season. Tighter supplies have helped drive cotton traded in New York up more than 10 percent this year.

Links

• The world is hot, on fire, and flooding. Climate change is here.
• Global heatwave: Hundreds killed and injured across Europe and Asia
• Why is Europe going through a heatwave?
• Droughts, bushfires and heatwaves: Scientists' warning on global temperature rises
• A Global Heat Wave Has Set the Arctic Circle on Fire
• Greece wildfires: Dozens dead in Attica region
• Europe burns as climate change fuels 'forest fire danger extremes'
• Climate change brings catastrophe across the world
• The big heatwave: from Algeria to the Arctic. But what's the cause?

Government's Energy Plan Would Guarantee A 'Nightmare' Of Complexity

Fairfax - Peter Hannam

The Turnbull government's National Energy Guarantee is "terrifically complex", and its problems will become "more significant" if its emissions reduction goal is increased, according to the first report by the Victorian government's new energy policy hub.
The report by Bruce Mountain,  director of the Victoria Energy Policy Centre, argues thorough economic analysis of the impact of the two arms of the policy - to reduce emissions and to improve reliability - has yet to be done even though state and energy ministers are being asked to approve it by August 10.

The country's electricity market will be made a lot more complex if the National Energy Guarantee gets up, a leading analyst says. Photo: Nick Moir

The emissions component of the scheme, which obliges retailers to contract with generators according to the carbon pollution associated with the electricity production, is particularly complicated because transactions won't be public but stored instead in a registry.
Mr Mountain said market participants would have buy a combination of electricity volume and emissions intensity without knowing the alternatives, nor penalties if they buy too much or too little.
Unlike current National Electricity Market operations, they would have no access to the range of hedging instruments that help them minimise risk.
The effort to suppress price discovery is to avoid the emerge of a carbon price that is politically toxic to the Coalition, he said.“It’s that complexity which makes it a nightmare and it’s unavoidable as long as you are seeking to hide the underlying emissions price,” Mr Mountain said.
Fairfax Media sought a response from Environment and Energy Minister Josh Frydenberg. His office referred to recent comments by Mr Frydenberg that the guarantee would "deliver a more affordable and reliable energy system and has the backing of business, industry and community groups”.
The paper said existing renewable energy generators, including Snowy Hydro, Hydro Tasmania and operating wind and solar farms would enjoy a windfall from the scheme.
"Some part of this windfall will be funded by the more emission-intensive retailers, but the greatest part will fall onto the shoulders of consumers who will be required to pay more without any matching reduction in emissions," the report said.
"While we do not expect that windfalls will be a major issue as long as the emission reduction target is no more demanding than [business as usual] emission reductions, windfalls funded by customers could become significant if meaningful emission reduction targets are set."
The fact the emissions target of the scheme will likely be met within the first year of its operation meant that even it were to work well "it would be pointless since it will deliver no more than what would happen anyway", the paper said.
That weak target also meant any hope that the plan would deliver investment certainty was "wishful thinking".
"Australia’s inability to hold a steady course on emission reduction policy reflects deep-seated disagreement on the objective - emission reduction - not on the methods by which this is to be achieved," the paper said. "Implementing the [guarantee] does nothing to resolve the fundamental disagreement."

Links

• The National Energy Guarantee: decide in haste, repent at leisure: A critical assessment of the proposed National Energy Guarantee
• Victoria Energy Policy Centre
• Government's electricity plan caps offsets, offers review by 2024
• Electricity plan would all but hit emissions goal before it starts
• Tender Will Allow Coalition To Dig Its Way Out Of Coal Hole
• Renewables Will Replace Ageing Coal Plants At Lowest Cost, AEMO Says
• Prolong The Life Of Coal-Fired Power Stations In The National Electricity Market, Says Australian Energy Market Operator
• Greenpeace And Getup Launch Campaign To Kill National Energy Guarantee
• National Energy Guarantee 'Clumsy, Inefficient', Says VEPC's Mountain
• Phony Peace? Challenges To Energy Plan Sent Back To Modelling Board
• 'Not A Big Drama' For Electricity Industry To Slash Emissions, Says Scheme Architect
• Victoria Demands New Detailed Analysis On NEG After COAG Meeting
• NEG: A Bipartisan Agreement To Disagree?
• Independent Review of the Electricity and Gas Retail Markets in Victoria

Kids Around The World Are Suing Governments Over Climate Change—And It’s Working

QUARTZ - Ephrat Livni

Earth Day 2018 sand sculpture on the banks of the river Yamuna in Allahabad, India. (Reuters/Jitendra Prakash)

Nobody could have predicted the kids would get this far.
Back in 2015, a group of 21 young Americans decided to sue the US government over climate change. In Juliana v. US, the plaintiffs argue that the government has violated “the youngest generation’s constitutional rights to life, liberty, and property” by adopting policies that promote the use of fossil fuels—despite the knowledge that carbon dioxide emissions are a primary cause of global warming.
That might sound like an extreme claim. But in the years since, the lawsuit has kept succeeding against all odds. The Ninth Circuit Court of Appeals on July 20 denied the Trump administration’s attempt to dismiss the suit (pdf), and the case remains set for trial 0n October 29. “With the Ninth Circuit again ruling in our favor, we are going strong,” 12-year-old plaintiff Avery M. said in a statement (pdf). “The federal government is trying to block our path but we are persevering. We are optimistic and have the courage to keep standing up for our constitutional rights.”
To the average observer, the case may still seem like a long shot. But the kids are part of a global movement of concerned citizens advancing similar claims. Collectively, the lawsuits are creating new precedents that bolster activism—and may, in the long term, help alter the way governments think about their responsibility to protect citizens against climate change.
The young plaintiffs in Juliana v. US, who are now between 11 and 22 years old, are represented by the legal nonprofit Our Children’s Trust. The organization is involved in similar suits around the country and the globe. In this case, attorneys for the trust argue that a fundamental right to a stable climate that sustains life is implied in the US Constitution.
There’s no explicit mention of climate change in the Constitution, of course, since human-induced global warming wasn’t a concern in the 18th century. But the attorneys argue that, last century, once government officials became aware of the harm their energy policies were causing and persisted in approving measures that endanger the planet, the government ran afoul of the Constitution. The notions of life, liberty, and the pursuit of happiness are meaningless on a planet that can’t sustain life.
The children also claim that, as a result of the government’s past and current policy decisions, their generation has been disproportionately burdened by the environmental impact of climate change. As such, they say they’ve been discriminated against in violation of the Constitution’s Equal Protection Cause.
There’s reason for the plaintiffs to be hopeful about their chances at trial come October. This April, youth in Colombia succeeded in convincing the nation’s high court (pdf, in Spanish) to reverse a February decision denying their climate change lawsuit against the government. The Supreme Court of Justice of Colombia ruled in favor of the youth plaintiffs, who argued that deforestation in the Amazon and increasing temperature threatened their constitutionally-guaranteed rights to a healthy environment, life, health, food and water. Notably, the high court also found that the Colombian Amazon forest has legal personhood and that, as such, the government has a duty to protect the forest.
In Belgium, a climate change case against authorities is expected to proceed to trial this year after three years of procedural disputes. Similarly in India, a hearing is expected soon on the case of a ten-year-old plaintiff, Ridhima Pandey, who last year filed an affidavit with India’s National Green Tribunal arguing that the government has failed to implement its emissions reductions policies and adhere to its environmental laws. In 2016, a seven-year-old Pakistani girl sued the government for its environmental failures, and the case has been allowed to proceed.
Norwegian youth are appealing the Oslo District Court’s January denial (pdf) of their constitutional climate change case to the nation’s highest court. And lawyers in Australia, Canada, and the United Kingdom are working with Our Children’s Trust on filing actions there in the near future.
Although the children involved in the lawsuits may not know one another, they’re involved in a collective international effort. Judges considering the US case have looked at similar cases, like the one in the Netherlands, for guidance. It’s only fitting that the push to hold authorities accountable is a collaborative one, as climate change is an issue that transcends national borders.
In fact, the Dutch government unsuccessfully used that argument to try to disavow responsibility for the effects of its policies. When Dutch citizens sued the government over climate change in 2015, the government argued that the issue of climate change was too big for it to handle alone. But Dutch judges didn’t buy it, ruling in favor of the plaintiffs. The Dutch government was ordered to reduce emissions by 25% within five years. If the US kids keep winning, the American government could face a similar directive.
“Climate change is already destructive,” 13-year-old plaintiff Sahara V. said in a statement after the appeals court decided not to block the US case. “It’s harming me and my family, and will only get worse unless the government starts taking action to stop it rather than cause it.”

Links

• ‘Climate Kids’ Suit Against Government Allowed To Proceed
• Children Sue Washington State Over Climate Change
• Four Climate Change Lawsuits To Watch In 2018
• Dear Leaders: You've Failed Your Children On Climate Change
• Florida Kids Sue Gov. Scott Over Climate Change: You Have 'Moral Obligation' To Protect Us
• Kids around the world are suing their governments for ruining the planet
• Ninth Circuit Rules in Favor of Youth Plaintiffs Again (pdf)
• Judges Can Save Us From Climate Change, And They've Already Started
• Seven-year-old girl sues Pakistan government over climate change
• Urgenda Foundation Court Case