Although I write an investment blog, I feel a need to discuss the incessant rape of Mother Earth today. As investors, we are affected by global events, especially natural disasters which can cause tumultuous upheavals to the stock market.
Since 2007, we have seen a slew of record breaking climate events. There was no let-off in the year 2008 as shocking images of one natural disaster after another captured our imagination.
Early this year, China experienced their worst winter in 50 years from savage ice and snow blitz. Over $20 billion in economic losses was estimated – power shortages, closed communication/transportation lines, massive crops and animals destruction. This resulted in soaring food prices which contributed to an inflation surge to 7.1 percent.
In May, we saw the wreckage in Myanmar from cyclone Nargis which claimed 4000 casualties and another 3000 are missing. This was followed closely by a devastating 8.0 magnitude earthquake which shattered China’s mountainous southwestern Sichuan province. More than 69,000 people were killed and about five million left homeless, sparking a nationwide relief drive.
Over at America, the rising Mississippi River broke water records in Iowa and Illinois, cresting almost 12 feet above flood stage in some areas. There were concerns of crop damage, toxic remnants being washed into neighborhoods, mosquito invasions, and contamination of clean drinking water. Communities further downstream are bracing for possible floods as well.
Just when we thought the worst is over for China, heavy rainfall caused flood chaos that affected nine provinces of southern China. More than 1.7 million people fled their homes, at least 171 people are killed and 52 reported missing, as rivers burst their banks. About 2.5 million hectares of crops and homes are submerged. Initial estimates of economic losses are put at $4 billion.
We really need to do something to protect our environment. There is increasing evidence that pollution in Asia is altering global weather patterns (more specifically, the Pacific storm track) by creating larger clouds and more powerful cyclones. Global air/heat circulation which has gone haywire resulted in warmer temperatures in the polar regions.
The rapid rise of China, with their immense market, presents lucrative opportunities for businessmen and investors. I believe many people fear, but at the same time, covet this juicy piece of economic pie. It is counter-productive to stop their pace of progress, but much emphasis has to be placed on environmental preservation, innovating energy efficient systems and developing alternative sources of energy.
China has announced with immediate effect the removal of subsidies to rein in their fuel consumption. This is certainly a step in the right direction. However, developing nations should not shoulder the problem of energy crisis and global warming alone.
America has to take the lead. I am disappointed by Bush’s initiative to open U.S. coastal waters and the Arctic National Wildlife Refuge in Alaska for oil exploration. It does not solve the root problem of oil usage habits and will further ravage our environment.
I will post more about this topic later. Till tomorrow.