Click here to listen to Rick’s column: Download baby_its_hot_outside.mp3
Having lived in Rapid City all my life, I thought I’d experienced about every type of weather there is in this region. Our weather can change on a dime. I’ve seen the temperature go from 20 below to 67 above within 36 hours. I’ve witnessed hailstorms, tornadoes, drought, and devastating floods.
But recently I’ve experienced something new—temperatures of 110 and higher. For the past two weeks, we’ve had almost daily temperatures over 100 degrees. One day the mercury climbed to 113.5 degrees at my house. Thank God, the humidity was only 10 percent. I can’t even imagine what 110 degrees must feel like in Miami or Chicago.
The Dakotas are taking the brunt of a drought that is affecting the entire midsection of the United States. I also notice that London hit a high of 98 degrees a few weeks ago. This is devastatingly hot in England, where anything above 80 is a serious heat wave.
All of this leads me to believe that the “theory” of global warming has become reality. A friend of mine observed that the only question left for debate about global warming is why it is happening.
About six months ago I ate dinner with a high-ranking official from Shell Oil. I asked his opinion of global warming, and his answer surprised me. He said the fact that the planet is warming is a foregone conclusion and that CO2 emissions play a significant role. I had expected quite the opposite reaction from one of the largest petroleum companies in the world. He indicated that Shell was aggressively developing alternative fuels.
Global warming is the main topic of debate on one of the online financial planning forums to which I belong. The general consensus among scientists seems to support the Shell Oil executive’s statement. I’ve been told that CO2 particles in the atmosphere have averaged below 300 ppm (parts per million) for most of history. These levels have recently risen to 379 ppm and are currently increasing at about two ppm per year. At this rate, in about 10 years CO2 emissions will reach 400 ppm, which one source has determined to be a tipping point where reversing the trend will be improbable.
One source indicates that the US is not the main culprit in global warming, as we account for only about 25% of the elevated levels and none of the increase. According to a DOE report, the US, Europe, and South America have virtually frozen annual CO2 emissions increases since 2000.
Who, then, is the biggest culprit when it comes to increasing CO2 levels? It is China, with a 60% increase in emissions since 2000, and more specifically, it is Chinese coal. According to the DOE, in 2003 China accounted for over half of the total global increase in CO2. “The International Energy Agency in Paris predicts that the increase in greenhouse gas emissions from 2000 to 2030 in China alone will nearly equal the increase from the entire industrialized world.”
Realistically, there isn’t much the US or anybody else can do to control China’s consumption of energy. It appears to me that, contrary to the picture painted by environmental extremists, the US has done a good job in addressing and capping its CO2 emissions. Certainly, more can be done, like starting to build nuclear power stations as opposed to those that burn coal.
How will global warming affect our day-to-day lives and investments? It’s too soon to tell, but it definitely will be a factor, and investment analysts are paying attention to it. In the meantime, investing in swimming pool and air conditioning businesses seems like a really cool idea.