A New Ice Age?

I just read an interesting article in the Wall Street Journal about whether we are approaching another Ice Age. That is hard to imagine considering I saw some people wearing shorts in mid-December in the Northeast. However, according to the article, it has been as warm as this or warmer for less than 10% of the time over the past million years. Ironically, Newsweek in the 1970s had an article in which lead climatologists were fearing another Ice Age. Of course, if you talk to people in Eastern Europe right now, they would say that we are already in an Ice Age with record low temperatures.

There are theories that the Earth's climate in more prone to Ice Ages. This has been tied to the salinity levels in the ocean. In fact, there are theories that as the fresh water glaciers melt in Greenland and run into the Atlantic Ocean, this will reduce the salt water levels in the ocean. As a result this could slow down the conveyor belt effect in the Atlantic Ocean that brings the warm waters from the Gulf of Mexico, which in turn keeps the temperature levels higher in the Atlantic Ocean, which avoids us going into a deep freeze. Some scientists claim this is already happening. It has been reported there is a fresh body of water the size of Lake Victoria coming down from the Greenland.

So who would be impacted more by this? It is believed that Northern Europe would feel this deep freeze effect, especially in the UK and Scandinavia. It does seem counter intuitive with rising temperatures and more mild winters that there is a threat of an Ice Age, but then again who could really predict the weather anyway.

Dodd Frank Legislation: Protector of Civil Rights

There are many controversial provisions in the Dodd Frank legislation; however, one that seems to be going under the radar without much notice from the protagonists against this legislation is a provision that requires companies to disclose whether raw materials essential to their products include minerals from Congo and neighboring nations.

The Congo? What does the Congo have to do with legislation that was designed to overhaul the rules and regulations of the financial industry to prevent another financial market meltdown?

This is what happens in Congress. Many times random pieces of provisions are included in legislation that have no association with each other. For example, the unemployment benefits and employer payroll tax extension bills include provisions for the construction of an oil pipeline from Canada to Houston, Texas.

Here, there was pressure by human rights groups to some how fight back against the atrocities in the Democratic Republic of Congo. As a result, Congress ordered the US Securities and Exchange Commission in the Dodd Frank legislation to require companies to disclose this information about whether certain materials it uses for its products come from Congo and its neighbors. Clearly, this will not effect every company. The minerals from the Congo are casserite, columbite-tantalite, gold and wolframite. The only mineral here that I recognize is gold. Then again, I am not a geologist. However, if you take a look at your phone and many other electronic products around your house, including this computer that I am using to type this posting on my blog, many of these products include this minerals. Unfortunately, the mining industry in that region consists of corruption, kidnapping, child labor, racism, torture and murder.

The intent here is that if companies have to disclose that some of their suppliers are rapists, murders, kidnappers and just all around bad dudes, perhaps that will force the company to find a more friendlier, gentler and kinder supplier. Let's face it. In today's society, image is almost as important as the quality of the product. Does that mean there will be a shortage of iPhones and other electronic devices because companies stop doing business with the Congo. Most likely, the answer is no. The Congo only supplies 20% of the global demand for these raw materials. However, companies will face additional cost because of the added cost for auditing its suppliers in order to properly disclose on its 10K whether or not it has such a nefarious supplier. This also has not had an impact on companies' stock prices. For those companies that already disclosed this information, their stock was not impacted by this information. I guess investors are not concerned about companies being human rights stalwarts. As long as the company is meeting it numbers, investors are happy. However, that may become a different story with consumers. There is this hidden intangible capital about people feeling good. Perhaps, people will not feel comfortable to do his or her Facebook update on a computer that includes minerals that came from children mining the mines in the Congo. Maybe I should check Apple's disclosure. It would be contradictory for me to write this story and not confirm that this computer does not have any components with such Congolese minerals.

Then again, I have stock in Apple and there is no way I am going to sel that stock right when its 2012 growth projections are through the roof. What can I say, I am a pragmatist not an idealist.

Update on Climate Change Conference

It was the last day of the talks and the last hours of the Conference. It seemed as if this would be another conference of failed opportunities. However, at the end of this conference, an agreement was made between all 194 participating groups.

They agreed to start negotiations on a new accord that would place all countries under the same international requirements with respect to controlling the emission of greenhouse gases, which would take effect, at the latest, by 2020. This is a historical deal like the Kyoto treaty; however, the participants in this deal would be more expansive, especially if the US, China and India follow their commitments here.

In addition, to the agreement on greenhouse gas emissions, the parties agreed to set up bodies that will collect, govern and distribute tens of billions of dollars a year for poor countries. This is very important because many of the countries that will be hit hardest economically by climate change are the poor countries and, more importantly, the poor countries need additional funding to advance their technology to more green/carbon neutral type of products.

Also, the agreement sets out rules for monitoring and verifying emission reductions, protecting forests and transferring clean technologies to developing countries.

This is a good start, with the emphasis "start". They key will be all the parties to this agreement following through. More importantly, following through sooner than later. Unfortunately, the Earth's climate is already changing. Depending how quickly we act, we may be able to slow down this process of change where the concept of a white Christmas in the Northeast of the United States does become something of folklore and myths, like that red nosed reindeer.

Update from Durban- Drama at Sunnyvale High

Surprise, surprise, surprise. Another stalemate on an agreement for carbon emissions cuts at the Climate Summit in Durban, South Africa. It seems to be a repeat of a teenage coming of age made for TV movie.

There is the rich spoiled powerful character that is being played by the U.S. She is the most popular girl in the school. This character has caused serious damage and harm to many people's social lives; however, everyone is afraid to stand up to this diva type of character because of the repercussions, especially her click of friends known as the industrialized countries, like Japan and Europe. Then there is a new character that has recently arrived into town, who lives on the other side of the tracks and is getting the attention of the US friends. Of course, these this character, being played by either India and China, is relatively poor compared to the US, but is getting to be popular with everyone in the high school. Now, in this story, there is a major crisis that the US caused, but the US will not agree to a solution unless China/India agrees to it. Unfortunately, China/India will not agree because the US wants China/India to make certain sacrifices for things that US did. That is the problem in a nutshell.

Now back to reality. The US has been the largest emitter of carbon emissions in the world over the past decades and will agree to a emission reducing pact as long as China and India agree to the same restrictions. China, in particular, will agree to it only if the US agrees to a larger amount in emission cuts to catch up for the enormous levels of Co2 emissions it released in the atmosphere over the past decades. Of course, the US will not do it.

So there you are. It is the same story in Copenhagen and that is now playing out in Durban. It is also the same story you could find in any high school teenage drama on ABC Family, CW or Nickteen on cable/satellite TV. In these stories there is some happy ending where the popular girl realizes she is wrong and becomes friends with the outsider girl and they work together to resolve the major crisis at the high school. Of course, there really is no happy ending here. We hear it all the time. If there is not immediate commitment and action to reduce our carbon emissions, the end result will be catastrophic. These two high school girls will not be fighting over who gets elected president or gets to take the star athlete to prom. Instead they will be fighting for their own survival.

It is time for the US, China and India and the rest of the world to grow up and act like adults instead of teenagers in high school. At least, that is what the main characters did in Sunnyvale High School Day, the made for TV movie on Nickteen. They acted like adults and resolved their differences.

Kepler 22b- The Goldilocks Planet

Great news. If things do not work out here, we can hop on the space ark and go to Kepler 22b. Yes, NASA has discovered a new planet where life can exist. Apparently, it meet the Goldilocks principle. It's location to its sun in its own solar system is not too hot and not to cold, but just right.

We have to thank the kepler planet-hunting telescope that spotted it launched by NASA in May 2009. The planet is 2.4 times the size of Earth and orbits a star similar to Earth's sun. Also the surface temperature is 22 degrees Celsius. So pack your bags. Well, unfortunately, it is 3,600 trillion miles away, 600 light years. Therefore, we most likely not visit it in my generation or my children's generation. However, the kepler telescope is looking for other plants the matches Earth's climate. So far the telescope has detected 2,326 planets. They are still going through the data to see if any of these planets have a similar climate to Earth, but a little closer in distance. Keep your fingers crossed. At the very least, check for updates on ticket prices for that space ark on Travelocity.

China- The Climate Change Leader

Unbeknownst to many of us, South Africa is hosting the United Nations-led climate change talks. There was a surprise yesterday when China called for binding emission cuts. In addition, they have requested that $100 billion a year be set aside to to held poor countries impacted by climate change and a system be created for rich countries help poor ones with technology. Of course, there is still great skepticism here by the West. Many believe it is nothing more than a political stunt. However, if China is sincere here, this is a major step. At last major climate change summit, China pulled out of any commitments to cut green house gases. As a result, there was no green house gas emission deal in Copenhagen because the US was unwilling to commit to anything without China.

The big question here is what does China really want or why are they concerned now. Keep in mind that China has a population that exceeds a billion people with an increasing demand for resources. More importantly, China has seen the impact that a global crisis can have on China when the financial markets melted down and then there was the real nuclear melt down in Japan. In addition, it witnessed excessive flooding in Thailand and its own natural disasters. China has invested a lot of money in green technology; however, it is realizing that without a united efforts from all industrialized countries, its and the rest of the world's economic growth and future will be in jeopardy. The big question is what will the US do here. I am hoping that there is no role reversal here and the US walks away from any deal with China, just like China did to the US in Copenhagen. Of course, if things do not work out here, we can all jump on that Space Ark and go to Kepler 22b that was just discovered by NASA.

La Nina Returns, maybe

There was El Nino and now returns La Nina. Quite frankly, I am never really know if it an El Nino or La Nina year because of the schizophrenic climate patterns. Fortunately, at least, I can speak Spanish.

So what does this mean to you beside the issue of your winter being 50+ inches vs. 2 inches of snow. Well, this weather pattern can have an impact on crop growth through out the world. And with crop surplus or shortage, food prices go up and down, respectively.

So here in the US we can expect excess rains in the Northwest, which will benefit winter wheat, but, in contrast, the southeast can face dry and warm weather, which will impact corn, soybeans and wheat crops.

In South America, Columbia is expected to receive heavy rains, which can impact coffee bean crops. I guess my Starbucks cup of coffee will be more expensive this year. Argentina will be dry. This will impact corn and soybean crops.

Southeast Asia faces heavy rains and will continue to be inundated with rain. This has already destroyed rice fields and is impacting rubber, palm oil, coal and tin production.

Down under in Australia on the west coast, there will be heavy rain. This will impact the corn, wheat and sugar cane crops.

In addition, there is a threat of an Artic oscillation. This is the wild card. According to Mike Halpert of the US Climate Prediction Center, the erratic Artic Oscillation can change a shift in climate pattern or amplify La Nina's impact. With a negative oscillation, like the last two years, cold air is pushed down and that creates a colder winter and larger snow accumulation totals year in North America. This could push up the demand for natural gas heating and kill some of the warm weather winter crops in areas like Florida and other parts of the South.

Generally speaking, the weather is becoming more unpredictable, which can create fluctuations in commodity prices. For us, that can mean gyrating food, heating and electricity prices.

Buenos suertes.