Climate Fueled Floods Cause Food, Energy Prices to Soar
January 22, 2011
With each new incident of record monsoon floods, fires and earthquakes, more tremors shake the global economy.
The latest disaster is unfolding in Australia, where the northeastern state of Queensland has been inundated after a month of rain, and is proving every bit the catalyst for risingcommodity prices as the 2010 floods in Pakistan and the wildfires in Russia were. Flooding in Australia has roiled Asia-Pacific markets for coal, cotton, wheat and sugar.
If weather events are increasingly disastrous in the world’s bread baskets, global warming could result in a familiar and worsening pattern: periodic collisions between Asia’s seemingly limitless demand for goods and the world’s supply of basic agricultural and energy commodities. That could send average commodity prices significantly higher, limiting economic growth and, perhaps, affecting the appetite for burning coal.
IHS Global Insight predicted yesterday that the floods would trim at least two-tenths of a percent off of Australia’s projected 2011 gross domestic product. Queensland is the largest exporter of coal for making steel. Nearly all of the mines are closed, and seaborne coal prices are approaching record highs.
The article quotes Per Pinstrup-Andersen, a professor of food policy and economics at Cornell University, price volatility will stay with us “until we get a handle on climate change — if we ever do,…We have to somehow change our policies to deal with the risks involved in these dramatic fluctuations in food prices.”
Can we drop the “CO2 is Plant Food” Crock now?