The US, Britain and Europe ‘led’ in creating climate change. China, Japan and Australia can lead the solution
- 10,973 offshore wind power turbines generate 30 per cent of the UK’s electricity needs. Hong Kong has one lonely turbine on Lamma Island that perhaps can power a village
- The 2021 IPCC report may be the turning point when we are forced consider where Hong Kong and the rest of Asia is on renewable energy
Brits in the UK love to talk about the weather. It is the topic of conversation which is guaranteed to come up when meeting and greeting, followed by blaming delays in public transport on the dreadful weather. It’s the same broken record: how rotten the summer is and, indeed, how all summers have worsened since 1976 – the best summer in living memory, now 45 years ago.
I’m just as bad. Sitting by the Discovery Bay ferry pier with my pint, I’m likely to witter on about how hot it has been this past week, or how wet it has been, and how mushrooms are growing on my unused ties in the closet.
The changing weather has recently got the globe talking too, with widespread storms this year flooding parts of China, Germany, Australia, and Britain – followed by giant hailstones the size of golf balls in northern England. There was record snow in Madrid, and rare and heavy snow in Texas and parts of Brazil. Air temperatures during the Pacific northwest “heat dome” cooked eggs while wildfires raged in Oregon and parts of Greece. The most recent oddity was a tropical storm that hit New England last week, landing on Rhode Island while some friends with kids cowered in their basement. And what about snow in Sichuan in August?
For a while, “global warming” became a buzz word to get university funding. If proposals for scientific projects included the magical phrase, the government would immediately pull out the chequebook. The long-term effect of that has been to breed sceptics – myself included – and until recently that was also the US government’s view. But the IPCC tells governments bluntly that our lifestyles, historically and currently, are now coming back to bite us. As the industrial revolution got under way some 250 years ago, we inadvertently started a process that would disrupt the delicate balance of the jet streams that dictate our weather. It is not a blanket of smog that is keeping us warm on Earth, it is far more complex and dangerous than that.
Please bear with my rudimentary understanding of meteorology. The weather on Earth is the result of a temperature imbalance as the sun’s warming rays hit us while the planet spins on its axis each day, at a slight angle, and orbits the sun each year. This causes heating and cooling in bands around the planet: one starting at the equator over sweaty Singapore, Kuala Lumpur and Balikpapan, then heading north or south. Another is over the chilly polar regions – in the northern hemisphere that means Siberia and northern parts of China, including the permanently frozen city of Mohe. Then there are the comfy parts sandwiched in the middle, with seasons of the year: Hong Kong, Beijing, Tokyo, etc.
These jet streams move around on their own and influence the weather on the ground. A jet-stream moving north in the northern hemisphere brings hotter, drier weather with clear and sunny days, and when moving south beings cold, rain and snow. The heating of the Earth’s upper atmosphere is now causing the jet streams to twist and turn further and more violently than normal, and the more they move the more extreme weather we get on the ground.
Can it be reversed? Probably not. Can it get worse? Certainly – or so it appears from the computer models. If that’s true, and we are able to put the brakes on further heating of the atmosphere, perhaps the future impact can be slowed down while we find a permanent fix.
Slowing climate change will largely rely on government-led investment and regulation of industries, not on the likes of you and I turning the air con down a notch. I am expecting there to be a crescendo of government promises and budget allocations ahead of the UN Climate Change Conference in Glasgow this November, and with it we are likely to see a convergence of ideas. So I think it is worth considering a selection of renewable energy stocks for the portfolio again.
I am expecting the following to happen:
Britain will be used as the model for offshore wind power, as the buildout has been so successful that the country’s wind farms can cover 30 per cent of its daily need, and Brits no longer rely on coal for power. The latest turbine technology at the Dogger Bank Windfarm can generate one day’s power for two houses with just one turn of a blade. By contrast, Hong Kong has one miserable turbine – a 15-year-old gift from Li Ka-shing to Lamma Island – with plans as stale as the turbine itself for more offshore capacity to generate up to 1 per cent of Hong Kong’s needs.
Australia could be the region’s model for green hydrogen and small, localised wind and solar farms. If demand does develop, there are few other places in Asia with the scale and the resources to do it.
The impact of severe weather is global, but the major effects on economic growth could be local. Across developing Asia, industries ranging from finance and commerce, to manufacturing, and primary industries such as farming are symbiotic across borders in a region that has more than its fair share of natural disasters.
Neil Newman is a thematic portfolio strategist focused on pan-Asian equity markets