Heat Wave Intensifies Energy Crisis in Europe

LouisYap

Publish date: Mon, 22 Aug 2022, 01:38 PM

Since July, high temperatures in many countries have continued, and sustained high temperatures of 40 degrees Celsius are no longer uncommon. At of now, Europe is experiencing the most severe drought in 500 years. There has been no significant rainfall for nearly 2 months, which has caused many fields and rivers to dry up. The lawn and green plants in many parks have turned yellow, and the water level of many major rivers in Europe has dropped sharply. Even the most famous source of romance and literature in Germany, the Rhine River, is close to drying up. Clearly, extreme weather events are increasing faster than anyone expected and have become the new normal in the history of global climate.

Looking at the world, the extreme weather this year is not only hot, but also various extreme phenomena such as torrential rain, floods, droughts, typhoons, etc. are spreading all over the world. Looking at the global climate history in the past 2 years, we can find that severe weather events like the above are becoming more and more frequent around the world, and it has become a trend. This trend, if not effectively curbed and improved early, will profoundly affect the operation of the global economy, especially the global agriculture, forestry, animal husbandry and fishery industries, supply chains, prices, and even fluctuations in the capital market.

This change is not only reflected in temperature, but also in floods, droughts, storms, snow, and other disasters. According to the 6th assessment report of the United Nations Intergovernmental Panel on Climate Change (IPCC), in the past 50 years, global warming has occurred at a rate unprecedented in the past 2,000 years. Due to the impact of climate change, the number of disasters has increased fivefold and disaster losses have increased more than sevenfold. Under this increasingly frequent extreme climate change, the impact on human activities and the economy must be profound and huge.

The drying up of the Rhine River is a microcosm of extreme weather. For example, the Rhine River is one of the most important waterways for the transportation of goods in Europe. Now that the river is cut off, not only life is affected, but also companies that rely on waterways to transport coal, gasoline and other goods must restrict production capacity, which in turn leads to supply and demand imbalances and price inflation. In July, European inflation remained unattainable, the economy slumped sharply, public confidence was getting lower and lower, and protests in the streets became more frequent, all of which are not good signs for the West. At that time, whether Europe will affect the world is worthy of profound pre-judgment and reflection.

In response to the increasingly severe global climate problem, many countries have become more and more aware of the seriousness and have formed a consensus on governance. For example, major governance programs such as the Paris Agreement and the Carbon Neutrality Plan. Objectively speaking, the extreme climate crisis has indeed brought a major impact on the human economy and life and has also profoundly changed the development and destiny of many industries and enterprises, but it has also brought many investment opportunities worth exploring. From an industry perspective, under the framework of carbon neutrality, the green economy, especially the photovoltaic and new energy vehicle industries, has become the strongest industry in the world, and countless super enterprises with a market value of 10 billion or even 100 billion have emerged from it, and this is only the past ten years. The achievements of the past few years and the space for them in the future are far more than that.

Therefore, it is important to seize the opportunity to invest.

Louis Yap

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