Economy

Russian oil price cap, by any other name, is doomed to failure

By David Callaway, Callaway Climate Insights

Having failed to secure a ban on Russian oil in Europe, leaders of Western nations are now exploring the idea of a price cap on the profit for Vladimir Putin on the more than 2 million barrels he sells on to the continent each day. Like the earlier idea of a “buyer’s cartel,” proposed by Italy, the price cap is doomed to failure.

Putin has demonstrated he has plenty of alternative buyers for Russian oil in China, India and Pakistan. Even if the West installs the cap through a ban on oil shipping and carrier insurance out of London, Russia has its own insurance operation for those who want to pay.

What’s more dangerous is that a price cap raises the stakes in the European energy poker game playing out as blistering heat requires more energy on air conditioning and as the winter need for natural gas grows closer. Putin showed his power just last week when he temporarily slashed pipeline deliveries to Europe by 60%, sending prices soaring.

As Russia’s Ukraine invasion drags on, pressure on Putin and on the West to end it before winter becomes greater each day. Sanctions are not working quickly enough and as we’ve seen, a ban on Russian oil will hurt major parts of Europe more than Russia.

While the idea of a price cap, like any idea, is worth exploring, the loss to Russia of Western goods and services in the form of international business is where the real pressure points could develop on Putin. Global companies continue to abandon their Russian operations each day. Less business with Russia, not more, is the answer.

More insights below . . . .

Shifting political agendas in Latin America knock climate change from priority lists

. . . . The recent election of a leftist ruler in Columbia, an upcoming election in Brazil, and turbulence in Mexican-U.S. relations this summer has left climate change taking a back seat to politics in a region of the world that desperately needs help preventing destruction of the Amazon Basin, writes Michael Molinski. Grand pledges on achieving net-zero and emission reductions last year at the United Nations climate summit in Scotland have given way to more pressing priorities tied to shoring up regional economies and getting money to the poor . . . .

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Tuesday’s subscriber insights: What spiking EV sales in the U.S. mean for Tesla

. . . . Having been at about 2% for most of 2021, the share of EVs in new vehicle registrations has shot up to 5% in the U.S. And along with it is going to be a mighty fight for market dominance, with current leader Tesla facing a band of eager competitors, including Kia and Hyundai, not to mention declared challenger Volkswagen. How will it shape up? Read more here. . . .

. . . . The U.S. Supreme Court did not rule Monday on the major climate change case before it, West Virginia vs. EPA, but did set up a special day for more decisions to come on Wednesday, with Friday the last day for any rulings before the high court breaks for the summer. The court has four big decisions left to make before the week is out, with the climate regulation one front and center for business. . . .

. . . . In something of an irony, renewable energy projects such as solar, wind and energy infrastructure are facing opposition from environmentalists, many of them concerned about their impact on the landscape. A major case in Maine illustrates just how the lines break down when it comes to, uh, renewable power lines. Read more here. . . .

. . . . Climeworks, the Swiss company that is one of the early pioneers of the nascent carbon capture industry, announced groundbreaking on a second plant in Iceland this week. What’s interesting is that the new Mammoth plant will be able to capture up to 36,000 tons of carbon a year from the atmosphere, up from 4,000 tons of the company’s first plant, opened last year. While still small, this is at last a beginning to the type of scaling needed to ultimately remove one billion tons of carbon. . . .

. . . . There’s been much talk that adding seaweed to cattle feed could significantly reduce the animals’ methane emissions. Now a small company based in Hawaii just received funding to scale a significant effort. Read more here. . . .

. . . . Do you take them home or leave them hardly used at the hotel? Shampoos, conditioners, body wash and such, that is. Now, Holiday Inn is joining other chains in getting rid of mountains of plastic and wasted products by using bulk dispensers. Read more here. . . .

Editor’s picks: Funds flow to flooded Yellowstone

Federal officials recently announced $50 million has been committed to begin the recovery efforts and repair work needed to reopen Yellowstone National Park after snowmelt and heavy rains caused devastating floods in the park and surrounding communities. National Park Service Director Chuck Sams and Yellowstone National Park Superintendent Cam Sholly also said that in addition to the park’s southern loop reopening last week, the park’s northern loop is expected to reopen in two weeks or less following completion of clean-up, repairs and final inspection of the northern loop infrastructure. This will reopen visitor access to approximately 80% of Yellowstone National Park. The first $50 million will be used to restore temporary access to Gardiner and Cooke City, Mont. and other areas. In partnership with the Federal Highway Administration, road construction crews and materials that were already in the park for a previously scheduled road project will be used. For more information on access, check out the park’s flood recovery webpage.

Heatwave bakes Japan, strains power grid

A weekend heatwave in Japan prompted officials to tell people in Tokyo and surrounding areas to cut back on electricity use. The Ministry of Economy, Trade and Industry said it expected demand for power to be severe Monday and urged people to turn off unnecessary lights, but still use air conditioning to avoid heatstroke, according to a report from the BBC. Officials have been warning of power outages for several weeks. In what is being called another sign of climate change, on Saturday, temperatures in the city of Isesaki topped 104°F. for the first time on record in June. Forecasters say a stable high pressure system in the region means daytime temperatures will remain high for the rest of the week.

Data driven: 62 million salmon vs. 2,000 brown bears

. . . . More than 2,000 brown bears call Alaska’s Katmai National Park and Preserve home. The park claims to have the highest concentration of brown bears in the world, according to a report from Natural Habitat Adventures, part of a collaboration with the World Wildlife Fund. The large number of bears is due to the large number of sockeye salmon — almost 62 million — that migrate through the park and nearby Bristol Bay each year. Thus, there are not only many bears, those bears have a better chance of packing on the fat essential to successfully hibernate during the winter and to raise cubs. Both bears and salmon are at risk of the effects of climate change, including changes in temperature and in vegetation, water levels and food sources. Fat bears are a happy sign of the vitality and overall health of the ecosystem. The NatHab report notes that a Katmai bear eats up to 40 salmon per day, equal to 100 pounds and 100,000 calories. Each year in October, Explore.org holds a bracket-style competition to select the chunkiest champion at Katmai, called Fat Bear Week. Fans can watch the bears compete during the whole season by tuning in to the live bear cams — up and running now — from Explore.org and the National Park Service.

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