Here's our summary of key economic events over the weekend with news it is all about the spreading inflationary consequences of war.
But first up, local carbon prices have been retreating recently. They ended last week down at NZ$78.50, a -10% drop in a week. In China, their fledgling carbon market now barely functions. The EU carbon price has fallen even more sharply, down -30% in a week to €66/tonne (NZ$105/tonne). The whole thing seems weird, given the record demand and prices for fossil fuels, and it calls into question whether these carbon market prices are giving useful climate signals. Given the dive in the EU price, holders of the NZUs may be facing steep losses here in coming weeks. Carbon market prices are responding to 'normal' financial market signals, and not climate or IPCC data.
We have been highlighting sharp rises in many commodity prices recently, and coal hit another record high at the end of last week, as did aluminium. This seems to be a daily achievement recently and we are inured to these rises, even if we know that they are building to cause serious long-term global inflation. Worse, for many commodities, inventories are low.
One to keep a special eye on is nickel, essential for stainless steel production, and EV batteries. But the world's largest producer is MMC Norilsk Nickel, a huge Russian producer accounting for 14% of global supply. They control 40% of the world's palladium supply, and 10% of platinum supply. They haven't been sanctioned yet, nor their oligarch owner.
But missing from the list has been Dr Copper. Copper demand has, for the past few years, depended on Chinese infrastructure activity, and China's economy is off the boil so copper hasn't participated in the current commodity price frenzy - which has been good, because it is already expensive and used widely. But on Friday that all changed. Copper prices zoomed higher overnight to hit a new record high of US$10,820/tonne. Supply concerns rather than demand pressures are behind this jump. And China signaled much more stimulus is on the way as its economy stutters.
Meanwhile, global food prices rose sharply in February, up almost +4% in one month, up +24% in a year. This represents a new all-time high, exceeding the previous top in February 2011, by 3.1 points. The February rise was led by large increases in vegetable oils (+37%) and dairy prices (+25%). Cereals (+15%) and meat prices (+15%) were also up. And of course, the global stresses in March means this is just the start of extreme food price stress. Rising post-pandemic demand in the recovering first world, stable supply everywhere, plus new growing security and supply-chain uncertainties are all conspiring to drive up food prices and food stress. In turn, these tensions will bring new 'security' arguments between nations.
Black Sea shipments of wheat have reduced to a trickle on the fighting and over the weekend wheat prices have exploded.
For the World Bank, the Ukraine invasion is a global economic catastrophe. And it is now no longer possible to get insurance for cargoes to or from Russia, especially those using the Black Sea.
The American economy added +678,000 jobs in February (seasonally adjusted), the most in seven months and way above market forecasts of +400,000. Job growth was widespread. (The actual rise was almost +1.5 mln from the prior month, but January is always seasonally low.) Their jobless rate fell to 3.8%, lower than expected. Their participation rate rose again, marginally. Average weekly earnings rose at +5.4%, and the fastest pace since March 2021. But markets glossed over this news in the face of the security issues in Europe. Still, this labour data will likely keep the Fed on track for a rate hike in two weeks.
US vehicle sales came in at just over 14 mln in February (annualised rate) and down sharply from the 15 mln rate in January. But supply issues are holding this back.
Brazil's economic growth was +1.6% in Q4-2021 and while expectations were low for this data, it is far lower than the +4.0% rise in Q3-2021.
There have been major policy meetings in China, but they are all overshadowed by the Russian invasion. At home they set a low growth target of "around +5.5%", but you have to say their conviction levels are low because they also noted "rising challenges". This is recognition that their economy is floundering. They need it to improve because they have tens of millions of young people joining their jobs market all with high income hopes that will be difficult to accommodate. New aggressive stimulus is probably not far away. Certainly interest rate cuts are close now. The iron ore price is on the move higher again in anticipation.
But not helping is that their property meltdown isn't resolved and is at a dangerous stage again. Zhenhro and Evergrande lead a rapid rise in offshore defaults. Altogether some US$100 bln in debts needs to be repaid this year alone. Bond discounts are very deep (-85%) indicating deep pessimism of likely progress, despite Beijing taking control of some of the larger developers. Auditors are resigning (a la Trump). Bank accounts are being frozen. Workers are walking off the jobs. For Beijing 'housing' is a core policy 'mountain'. The unprecedented demographic turn means future demand for houses will shrink very sharply. At present supply, there are more than a decade's worth already in the market. That means there is no need for the Evergrande's of China anymore. Building more as part of new stimulus will make the problems worse. Now Beijing's housing problem is that those who bought face steep valuation crashes. It's not the way Beijing thought their housing policy would turn out. They are about to face some very angry buyers.
In Hong Kong, retail sales are languishing. December trade was revised lower, and the January year-on-year gain was weak, and on a weak base. January 2022 sales were a massive -30% lower than in January 2019.
Meanwhile EU retail sales didn't bounce back as strongly in January as was expected, a worrying under-performance given what has come after this.
Russia's currency is at a new record low, weakening again very sharply at the end of last week. Until now, key Western policy makers have exempted oil from their sanctions. But the Allies are moving to include Russian oil in the blockade. That won't help the ruble.
S&P cut Russia's rating to "CCC-" from "BB+", as default risk rose sharply again. Both Moody's and Fitch cut their ratings further. Explanation of ratings grade is here.
The Russian Parliament rushed through a new law punishing the spreading of “false information” about Russia’s armed forces with as much as 15 years in prison. Calling the Ukraine action a 'war' or an 'invasion' are now crimes. Independent local media shut down. The international media pulled out their staff immediately to protect them from arrest. Russia is now in full propaganda mode (accusing others of its own flaws).
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In most of the world, Russia is losing the information war over Ukraine. In China, though, it’s winning big. Beijing has thrown its hat in the ring on the Russian side - but with some reservations on the commercial side. They are a dubious friend for the Russians. But Russia's mistake is a golden opportunity for Beijing to make it a subservient client.
It is not economic news, but we should note that Australia is ramping up its defense spending, and will buy and host nuclear submarines. One of Brisbane, Newcastle or Port Kembla will host a new AU$10 bln naval base for a new fleet of these submarines. Their existing Indian Ocean base will be upgraded. Fear of what China is about to do with Taiwan is driving their sharp turn to become nuclear-armed.
The UST 10yr yield opens today at 1.74% and up +2 bps from this time Saturday. A week ago it was at 1.99% but risk aversion has taken hold since. (But recall, at the start of 2022 it was at just 1.52%.) The UST 2-10 rate curve starts today even flatter at +25 bps. Their 1-5 curve is unchanged at +62 bps and their 30 day-10yr curve is a little flatter at +155 bps. The Australian ten year bond is down -3 bps at 2.11%. The China Govt ten year bond is unchanged at 2.85%. And the New Zealand Govt ten year is also unchanged at 2.79%. We should also note that while New Zealand benchmark Government bond yields are flat or soft, wholesale swap rates are still rising, and key ones are back up to 2016 levels now.
The price of gold starts today at US$1973 and up another +US$11/oz from this time Saturday. That is a weekly rise of +US$89/oz or +4.4%. At the start of 2022 this price was US$1814/oz, so it is up +8.8%. (It is beating bitcoin handily at present for its 2022 price performance. See below.)
And oil prices are down a bit today and by -US$2/bbl level. In the US they are now just under US$113.50/bbl. The international price is just on US$117/bbl. (But Russian oil is selling at deep discounts.) A week ago the international price was US$93.50/bbl and that seemed high. At the start of the year is was under US$80/bbl. The climb since has been more than +40%.
The Kiwi dollar will open today still higher at 68.6 USc and a +¾c rise from Friday. Against the Australian dollar we are at 93 AUc and firm. Against the euro we at 62.8 euro cents and almost a +1½c rise from Friday. That means our TWI-5 starts today at just on 73.6 and its highest since late November. If sustained, this will mitigate some of the imported tradables inflationary pressure. Not a lot, but some. And all this is despite the US dollar rising to near a 20 year high.
The bitcoin price is lower today, down another -4.2% from this time Saturday to US$39,137. For the week it is up +3.8%; Year to date it is down -17%. Volatility over the past 24 hours has been moderate at +/- 2.0%.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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151 Comments
“a subservient client,” nice euphemism. Of course China has hooked much of such clientele throughout the world, Africa largely, the Pacific as well. But they are not landing a fish here, Russia is bigger than a whale, relatively speaking. Putin has given them Russia gift wrapped. Where else could they possibly turn to.
Nice series of thoughtful pieces by Patrick Armstrong. Useful antidote to the torrent of Russia bad/mad/sad gibberish gushing forth.
I feel like I'm being patronised reading news reports on Ukraine. They might as well just write "Ukraine good, Russia bad" and be done with it. Not that I disagree, but I don't need to be told what to think.
"Some obscure bar tips Russian vodka down sink". "Disney to halt release of their latest animated film in Russia". Okay, what am I supposed to do with that information? Grin smugly and think to myself "good job"? It's like a 5 year old sticking their tongue out at Putin, and we're all expected to sit around clapping and cheering.
No discussion of what's actually going on at a geopolitical level, the reasons behind it, or how we might put an end to it all and prevent it from happening again. Just a never ending series of emotional platitudes designed to influence public opinion.
The propaganda machine has never been stronger.
Freedom of speech, thought and opinion are discouraged.
Metallica wrote a song about this in the 80s and it still rings true today
The propoganda is definitely pro-Ukraine. But even without it, there is no equation where Russia (Putin) = Good in these events. Geopolitical reasoning or not.
This had nothing to do with Geopolitics, and everything to do with a bunch of leaders who have ego's bigger and more impressive than their respective armed forces,
The UN was formed to stop exactly this scenario from happening, as was NATO. If they aren't going to do anything, then why bother with any form of politics. Might = right. Be it the USA, Russia, or China.
This had nothing to do with Geopolitics, and everything to do with a bunch of leaders who have ego's bigger and more impressive than their respective armed forces
I couldn't disagree with you more.This type of thinking will ensure that we never solve anything, or prevent it from happening again.
I don't see what you disagree on.
So Ukraine returns to Russia? The Russian border now extends to Poland, which is NATO, so we are back to Square one. Should we just let Russia have all of Europe so there is an ocean between there clearly hopeless military and Uncle Sam? Would this keep Putin's paranoia at bay? or would he just start worrying about the even more historic Sino enemy to his south?
Look at the world right now, there is literally conflict everywhere. Be it small scale protests, minor insurrections, full blown rebellions, or multi-national wars.
We are a tribal species that has fought anyone who was not in our family/tribe/nation/idealogy/religion since our inception. It's not geopolitics, it is human nature.
What if Ukraine stays as Ukriane, Russia can never occupy Ukraine even Putin can surely see how insane that idea is. Ukraine stays neutral, not in NATO, not in Russia and no weapons. Ukraine needs money to develop it's economy not it's weapons systems. It's the poorest country in Europe and getting poorer by the day. Peace and economic investment is what Ukraine needs, instead their entire focus has been on joining NATO and getting more weapons even to the point of starting a nuclear weapons program. All while maintaining a belligerant attitude towards Russia.
That economic investment was never ever going to come from Russia. They are a basket case in their own right.
So that left Ukraine with two options, get help from either the EU or China? They chose the EU, and we all know what Putin thought of that.
As to why Ukraine should remain "Neutral". They are a sovereign nation of free people, in my book that gives them the right to choose their own path.
No, it's geopolitics. What's happening in Ukraine is no more about anyone's ego than the 20-year war in Afghanistan was about international terrorism. Ukraine is of immense strategic importance to both Russia and the West, there is no way either side are going to let it fall into the other's hands. That means we either find a diplomatic solution to this, and relatively quickly, or we enter WW3.
Trying to portay the issue as being simply "good vs. evil" is the best way to ensure that a diplomatic solution is never reached, because it pretends that nobody has any legitimate concerns to address. Putin has made his concerns very clear, although you'd be excused for not knowing what they are, given that they've been summarily ignored by western mainstream media. These concerns do not justify his actions, but they go some way towards explaining them, and if those concerns are unjustified then they should be easy enough to allay.
Geo politics is about ego, all politics are. Geo politics are just at the national level as opposed to personal. Putin's "concerns" are about his concerns, and his 'view of his nation'. And they are BS. Russia's security has never been threatened by the west, other than to constrain the Soviets on their plan of forced expansion. Putin's position is clear - he believes the west is a paper tiger and is going about proving it. What he says is rank BS, he is just power grabbing.
Russia's security has never been threatened by the west
What nonsense. NATO's expansion has always been seen as a threat to Russia, by both Russia and the West. US Secretary of State James Baker's promise to Gorbachev after the fall of the Berlin wall was "not one inch eastward"; a direct acknowledgement of the threat that would pose, and understood perfectly well by everyone at the time.
I realise there will always be those people who think the world is simply made up of goodies and baddies like some kind of Saturday morning cartoon. I just hope our European leaders aren't counted amongst them, so that there's still some hope of a diplomatic solution to all of this.
Rubbish. Those former Soviet states who asked to join NATO? They did so because they learnt to never trust Russia, and NATO is a defensive alliance. The Soviet Union was belligerent towards the west, openly and repeatedly. But just for a second how much of Russia did NATO conquer when it was at it's weakest after the wall fell? NONE. How many countries did NATO conquer by force since its inception? NONE. How many former Soviet states asked to join NATO? 11. How many countries are forced by NATO to remain as members against their will NONE - actually France left because they wanted to control their own nukes themselves rather than have them under NATO control.
By comparison; How many countries has Russia invaded after the fall of the wall? At least three, but does not include Georgia and Chechnya. How many are democracies that want an alliance with Russia? NONE. Belarus despite it's noise is not a democracy.
Russia is the threat. NATO is only a threat to Russia's expansion and subjugation of countries, although as recent events tell us - not much of one!
As Russia shows, you can apparently have a very powerful military on paper, but inexperienced leadership, incompetence and corruption can lead to its downfall.
Russia may probably eventually win this campaign, but it will be very costly both in men and material, but also in pride as the performance of the Russian military so far has been sub-optimal. Fuel has apparently been in shortage because of soldiers siphoning it to sell to locals for vodka. Logistical blunders has handed over tanks and other vehicles to the Ukranians and poor leadership/planning has meant (Russian) units have been lost and have run around in circles.
It is coming out that the UK has been sending armaments to Ukraine for most of this year. Their Defense Secretary Sam Wallace has been flying here, there & everywhere & it has been followed up recently with key people on the ground in the Ukraine as well. That's why Putin couldn't get the airport & his forces from the Belarus haven't been able to break through. That means his troops have to be driven in. The weapon of choice is the new short version (one kilometre range) NLAW's which programme the target, you shoot from the shoulder & scramble away before they spot you & shoot back. Isolate the convoys & pick them off one by one. Keeping the airport(s) under Ukrainian control is the biggie. Putin's on Plan B already.
Depends on Putin's future Foxy. If he can retain power China will likely be just one of very few he could turn to. If however his generals and "friends" wake up to just how dangerous it is for them to stand close to him is, his tenure might just become a little foreshortened, and Russia may again become a popular democracy giving the likes of Navalny a shot at running the country.
If he retains power, he will forever be a threat to Europe and the world. As he gets stronger, even China would not be able to trust him.
Beware of the Ides of March then! But even more than disquiet and unrest in the inner circle, if/when the sanctions start biting into the citizens of Russia. Hunger, sickness, depression and other social ills. Loved ones coming home in body bags won’t add to the happiness either.Big dangerous mass to start fermenting I would suggest from previous history.
China has a singularly unique opportunity here to put itself forward and change its position on the world stage.
China should immediately impose the no-fly zone over Ukraine and push Putin back into Russia, thereby winning on two fronts with huge upside both ways and with minimal risk of any retaliation from Putin.
China wins cudos from Europe and NATO allies, praise from Ukraine and at the same time control over Russia, who would not be prepared to fight back, and thereby vast commercial advantage, instead of just being a silent partner
It's one thing for the US to enforce a no-fly over Iraq. But how would china enforce a no-fly zone over Ukraine, against Russia whose air force is twice as strong?
Russia and US are major exporters of defense equipment, arms and stuff that costs in billions of dollars. They want insecurities in the world so countries keep on spending on these items which 80% of them are stored in warehouses and rust over their life time. But who makes the most profits out of them?
Ukraine's president has fallen for this trick of the two super powers who want to create instability in the world, so they can sell more if their killing machines.
Ukraine is being used at the playground of the powerful in 2022. It has been previously iraq, egypt, syria, Afghanistan etc. The puppets and dumb get played and they ruin their countries.
Hope the Ukraine learns faster and makes intelligent decesions quickly.
Only if we have more intelligent people in this world who make their own decisions than being told what to do. That's why 99% are employees but only a few own the company in which others work.
I know this harsh truth and not easy to digest and most will not like it.
I agree but better than dying.
Sometimes when there is no one to save you and you are in the arena with a killer and there are others shouting from the sidelines and throwing a few things at you to save yourself. And you cannot really save yourself from the killer, it's better not to do stupidity that will kill you. Rather make friends with the killer and live to fight another day when you have gained more power.
But yes now i have proof that intelligence is rare.
I am pro no one mate. Assume nothing please. Someone who has never faced adversity can do a lot of talk.
But i am someone from a family who have lived that life of when you are told big things about freedom and when the crunch time comes no one helps. We have to flee our homes and leave everything behind or have choice to get killed. So men in the family fight and get killed, women and girls and kids have to run across the border to save themselves.
The strangers only either really talk or help for a couple of weeks. Then we were left to fend for ourselves. So yeah i would have loved the life where I have had all my family all together even if it was to live a little less desirable to one's you living in the Westernised world and having big ideas about freedom and family.
So stop preaching when you are the ones not suffering.
That doesn't warrant an answer as it's private but if you are literate in history, it's not difficult to point to a few places in the world where this has happened.
And it's very easy to also see who was responsible for those things to happen. But then vested interests will spin everything in their favor when it suits them.
"But i am someone from a family who have lived that life of when you are told big things about freedom and when the crunch time comes no one helps. We have to flee our homes and leave everything behind or have choice to get killed. So men in the family fight and get killed, women and girls and kids have to run across the border to save themselves."
People stand and fight for a reason - Why do you think yours did?
- Keeps assuming what other commentators here have and have not faced or seen in terms of 'adversity'
- Repeatedly blows own horn about your own intelligence.
Pick one. You don't have a clue about anyone here or their background, or what they have or haven't seen. Assuming you do is not a sign of 'intelligence'.
Also I'm fairly comfortable saying the country shelling cities and using mortars on fleeing civilians is the one in the wrong here. Weird how people don't just surrender to hostile invasions under flimsy pretexts.
If a foreign power tried to steamroll New Zealand and was shelling cities, yes, I would absolutely take up arms against them.
But I fail to see how that's relevant to me pointing out that you're making baseless assumptions about what people have and have not experienced and then crowing about how smart you are. Ironically so, given you're the one playing Armchair General and deciding what the best tactics would be. I assume you are not on the ground seeing things first-hand either?
Have you heard of a place called Viet Nam and how a small mostly civilian militia connected with an army and defeated one of the biggest most capable armies in the world of it's time? Or how Russia was defeated in Afghanistan?
And pay attention to who is standing up and fighting in Ukraine, old and young alike are facing down the Russians with quite a bit of success too.
Do you call all them unintelligent or are they just brave and prepared to stand up to evil? While you are .....?
Including yourself I assume (as in not intelligent).
I think the Ukrainians want to be free. I think that most despite what you are saying are, choosing to fight for freedom.
Who are you to judge what is intelligent or not? They are living in it now, and are making their choice. Despite your claims have you lived in it?
Hope the Ukraine learns faster and makes intelligent decesions quickly.
I'm curious as to what intelligent decesions (sic) you think the Ukraine, as a country currently being invaded by a much larger, more powerful neighbour, should make. Surrender and hope that becoming a vassal state is as bad as it gets?
ETA: Dale's coffee is clearly stronger than mine.
Only after Hitler back stabbed Stalin.
In early 1939, several months before the invasion, the Soviet Union began strategic alliance negotiations with the United Kingdom and France against the crash militarization of Nazi Germany under Adolf Hitler. In August 1939 the USSR made an offer to the United Kingdom and France to send "120 infantry divisions (each with some 19,000 troops), 16 cavalry divisions, 5,000 heavy artillery pieces, 9,500 tanks and up to 5,500 fighter aircraft and bombers on Germany's borders".[21] Since the USSR shared no border with Germany, this would effectively mean an overwhelming occupation of the territories of Poland by the Red Army, which was previously the site of the Polish–Soviet War in 1920. The negotiations failed
British and French officials pressured the Polish government to agree to the Soviet terms.[22][53] However, Polish officials bluntly refused to allow Soviet troops to enter Polish territory upon expressing grave concerns that once Red Army troops had set foot on Polish soil, they might decline demands to leave.[54] Thereupon Soviet officials suggested that Poland's objections be ignored and that the tripartite agreements be concluded.[55] The British refused the proposal, fearing that such a move would encourage Poland to establish stronger bilateral relations with Germany.
I was quoting from the same history book you are ready (sarcastically, just in case you missed the point) ie if Churchill had taken your advice he would have just let Hitler do what he wanted and not fought back, which in Britains case, and its commonwealth, was in honour of treaty obligations, as they were not being directly attacked at that stage.
Said this way back when it happened - the Chinese/Russian meeting of leaders just before the Ukraine invasion was most likely "You support my invasion of Ukraine (even if it's tacit support), I will support your invasion of Taiwan. Let's try and set a new world order if the US etc decides it's had enough and goes to war.". Wouldn't be at all surprised if it's going to happen.
Nah, if I was them, I would wait and see the Wests response to the Ukraine invasion as that will likely determine a similar response to theirs. China can then prepare to get around any sanctions etc. Once all the attention (and large forces are committed) on Ukraine, then invade Taiwan with a better understanding of what you will have to endure. It would be a very Chinese way to do something, let someone else test it out first, then methodically execute the same action in a slightly better way that tries to avoid as many of the bad consequences as possible.
Even if China did invade, almost certainly the US would allow it. There is no mutual defence treaty with Taiwan since it was torn up when the US recognised China in 1980. By defacto, you could say that the US therefore recognises Taiwan to be part of China. The US couldn't claim Taiwan sovereignty as an issue as a result, so they could only get upset if there was a bunch of civilian deaths as a result of any invasion. But it's not like the US hasn't killed civilians in it's own recent history of illegal invasions, so it would be very hypocritical of them to respond angrily if there were a few hundred/thousand deaths or so.
But I suspect China will almost certainly have the ability to disable first or destroy if necessary most of Taiwans military capabilities when it finally does take action. Undoubtedly they have spies placed throughout their military structure, ready to act. With Taiwan looking more and more like a strategically critical island, the Chinese urgency to act is increasing.
Things are turning very quickly out there. In the supermarket yesterday, third in line, both groups in front had to leave food behind as they did'nt have enough $ to pay for whole bill. I got about 3 quarters of my usual shop and that come $275, for four. Chicken is the staple meat now, red meat is very expensive.
I had the unfortunate pleasure of having to go into a supermarket in the weekend (we usually click/collect). To be honest fruit/vege seemed reasonable, I was expecting more. But most other items had gone up noticeably. Items that used to be priced 3.xx were now 4.xx etc. We have cut back and only do meat maybe 3 times a week, we just refuse to pay the stupid high prices and have come up with some nice alternatives thus far.
Speaking of that, BP 98 is $3.4xx already, have called a $4.xx some point this year.
On RNZ on the weekend they interviewed a guy from the Papakura Marae who said demand was skyrocketing for them for social services, especially at the foodbank. They were really stretched as a heap of their staff were going down with COVID.
We did a big shop at the weekend and stocked up on non perishables. Everything is going to fly up in price now.
Some people have been saying inflation will peek at 8% or so, how about continuing on into the mid 20% range? That's what we are seeing with basic expenses right now, power is likely to increase 20-30%, food has already gone up 20% so far this year leading us all to cut back. Rents are rising substantially, building materials looks like they are through the roof, in many cases up 50%...
I wonder when Orr will finally realise he has to do something?
Interesting moves in the Carbon price. I long suspected that this was just another speculative market and had little to do with meaningful climate action. Perhaps we can pull out of the whole thing now. We should start looking after our local environment and biodiversity, whilst also mining our own high quality coal and refining our own oil. I would love it if NZ could be fuel and food secure with thriving biodiversity and clean rivers. Carbon offsetting is a rort.
You're talking an oxymoron.
The need to not release in-ground carbon, is a fact of physics (if we wish to continue as a species; we evolved with it underground, thus out of play). Don't confuse that with the 'pricing' of carbon, which is indeed a rort; one being played by our generation on all future ones.
And basing your (our, any) society on the drawing-down of any finite resource, is not 'secure'. The only applicable word is: Temporary.
Environment and biodiversity are greenwash; yes they need addressed but no, they are not the all of it, not by a long chalk. Resource depletion and energy ditto, are the biggest games in town; with overpopulation an inextricable factor.
I disagree. While we have cleaner coal in NZ than Indonesia, and we still use coal, we should be using ours. Whilst we have oil and gas, and we still use these, we should use NZ oil and gas. Bringing in fossil fuel from overseas whilst stopping local exploration and extraction is greenwashing. NZ can make no meaningful difference to global CO2 levels but we do have a unique biodiversity which must be protected and restored. How can someone say they are an environmentalist if they are happy to plant monoculture pine rather than diverse native bush. If we restore the natural systems a lot of issues will take care of themselves.
While we have cleaner coal in NZ than Indonesia, and we still use coal, we should be using ours. Whilst we have oil and gas, and we still use these, we should use NZ oil and gas.
I'd disagree, if you're going to use a finite resource you may as well import them and keep yours in reserve for when there's true scarcity. Sure, have the infrastructure in place to utilize the resource in the event there's an external supply disruption, but why would you willing burn through your own supply first?
Ignoring this though, the smartest thing though would be doing everything we can to lessen our reliance on these non-renewable inputs. That would require thinking about infrastructure and long-term population, so I don't hold out much hope that we'll do anything to prepare at this current point. It's not like the direction that things are going hasn't been known about for decades already...
You make a good argument but I am struggling to see the alternatives at the moment. EVs require rare metals for their batteries (Russia has the Nickel) and the batteries need charging. No hydropower in a drought, no wind power on a calm day. NZ don't want Nuclear and burning wood is probably a non-starter. Perhaps we just wear a thick sweater, ride a bike and hope like hell that nuclear fusion becomes a reality.
The base tesla model 3 is a Nickel and Cobalt free battery chemistry btw, so its entire possible to avoid those metals and still make a very useable EV. Still needs lithium, but that is not that rare, we just need to find economical ways to extract it from seawater and that becomes a non-issue.
There's a plant set up in Taupo working on extracting lithium from geothermal brine
https://www.thinkgeoenergy.com/geo40-reports-successful-extraction-of-l…
I agree with your comments Waikatohome, transporting fuel across the world to us when we have them in our own backyard seems insane.
The only long term, real hope I see is in creating green hydrogen using our off peak electricity and in order to do that long term we probably need to invest in some additional hydro/electrical infrastructure.
Hydrogen takes more energy to produce, than it returns. That can be said of charging and discharging a battery, too, of course. All storage incurs losses; what most folk miss is that hydrogen is merely storage, not a source. Regardless of colour....
If storing is overridingly important, folk will try all sorts. But the losses in hydrogen mean you aren't supporting anything like BAU - which begs the question?
W-H ----- Or perhaps accept that the one-off energy bonanza was a temporary blip. And construct your (our) lives accordingly. Incidentally, globalism was a product of excess energy, so constructing localism is probably the way to look ahead. Add in non draw-down of finite resources, non-reduction of renewable ones, and non-filling of sinks, and you've got sustainable. In the real meaning of the word.
That, of course, raises the problem of entropy, which raises the problem of triage, which.........
As to power availability, those of us who live off grid have long learned to do the washing when the sun shines. It was a one-species arrogance which rated self-time above fitting-in with nature.
1 Fukushima and NZ's existing hydro would cover all of New Zealand's electricity needs. No need for wind, geothermal, coal, gas, cogeneration. Nuclear baseload and hydro peakers would cover everything. Yet meanwhile we agitate for all these alternatives. Why wait for fusion - we may need fission to start the reaction anyway.
A commitment to a long-term stable population would be the brave but best option for NZ. Then infrastructure planning is much easier. Without a plan for a stable or declining population NZ will never be serious about climate change.
Meanwhile the North Shore Times says Auckland is expected to add another million.
Nothing wrong with Pines, I have planted acres of them over the years and pruned them as well. Birdlife still increases significantly over an empty paddock. Yes Native is better but your forgetting the cost difference, its like 50x more expensive and its slow. Unless the government heavily subsidised native replantation it is never going to happen on a large scale.
We could ring fence the tax take and money raised from permits from our own fossil fuel industry and invest this in subsidies for all landowners to plant native bush blocks and shelter belts. We could have wildlife corridors across the landscape linking all of the remaining bush areas. Oil and gas exploration could also pay for upgrading our wastewater treatment. Cleaning the rivers and sea with no need for three waters. Real results rather than fictitious carbon credits.
I don't find the fall in carbon price unexpected. Europe is waking up to the need to be less reliant on Russian oil and gas, plus high fossil fuel prices will accelerate the move towards other energy sources. This all means that there should be reduced future demand for carbon credits, hence falling prices.
Heroic Zelensky has revised the number of Russian dead, now at 10,524 down by 60% from earlier facts of 2,500 per day. Which still gives combat casualties of 50-70k wounded Russians. Ukraines losses are tragic with 500 civilians killed, 4 kindergartens, a childrens cancer hospital and 300 bridges destroyed.
The Russian official death toll for their soldiers is just under 500 which is still quite a lot when you think about it. It's likely underreported as well.
I think the West has already communicated to the Russians that they will not intervene. Probably pleaded with them to keep civilian casualties as low as possible. The war has revealed that Russia poses no realistic conventional military threat to NATO however no one wants a nuclear exchange over what was once part of the USSR and not even a client state. It's a bit like getting yourself killed intervening in a domestic argument.
Russia lacks the surgical precision NATO air forces have had for more than two decades. NATO can knock down a house but leave the next standing, Russia is shelling schools.
I've been particularly impressed with the cheap UAV the TB2 that Ukraine (and many others) now operate for precision strikes. At $1-2m per unit with a low operating cost substantial airpower is within the grasp of almost any country. It's a complete revelation.
What are you on about dude? NATO countries bomb civilian targets all the time. It's an unfortunate fact of an urban warfare environment, but they certainly aren't 'surgical' in their precision. Here's one example of the USAF bombing an MSF hospital a few years ago.
So much for the nuclear NPT if Australia goes all in and becomes America's NATO of the South Pacific/Indian Ocean. Sure they aren't at the nuclear weapons stage yet, but once they have nuclear powered engines and are enriching their own uranium to the point to provide a reactor, it will be very tempting for them to just enrich some a little bit more to create weapons grade and become a nuclear power and therefore "uninvadable". Wonder if there will be inspectors when they start enriching and if the US will create huge damaging sanctions against Australia if they went down that track? Don't make me laugh, the US will support such ambitions and likely provide the technical know how for doing so, while denouncing it publicly.
First, they can't enrich uranium from a nuke sub's power plant, and they don't have enrichment facilities.
Besides that the Virginia class may not be quite as good as they think if it is true that one got cornered by the Russians a little while back.
I understand the best is the Swedish Gotland class, but it is a diesel electric so a little limited.
Yeah they aren't enriching yet, but I am looking at the future. They have uranium in the ground and if they have uranium powered subs, they will likely want to be able to make their own engines so don't have any stretched supply lines to the US. And the sub supplier may want a local alternative "refuelling station" to their own.
I am purely speculating at the moment, but motivations are key at this early stage.
Even if they don't go down the nuclear weapons route, nor the nuclear power route, just having the Virginia class (cruise missile/nuke capable) sets them up as a nuclear power. Just that if they were to have any nukes, they would be under the US's control, much like NATOs nuclear weapons.
I think you're stretching a little to suggest having a nuclear power plant makes them a nuclear power. That says Japan is a nuclear power although they have no weapons, and indeed have laws to prevent them being on Japanese soil.
But you do make a fair point; the Virginia class is to all intents nuke capable and with their closeness to the US I would suspect that that capability would still be built in even if only as a contingency, and that when crunch comes to crunch, the US would ask or even expect them to deploy nukes under US command. As to developing the facilities, the Aussies, under treaty, have actively avoided even building the processing plants to process yellow cake. Plus the manufacture of these weapons only occurs in the UK or US (deliberately leaving out others) so they would need to be imported.
The Aussies are a little too much US sycophants for my liking.
"I think you're stretching a little to suggest having a nuclear power plant makes them a nuclear power." - surely not? The rest of the world imposed huge sanctions against Iran for nuclear enrichment, where Iran claimed it was just for their nuclear power industry. The US claimed it wasn't difficult for them to enrich to nuclear weapons levels once they had a nuclear industry.
But yeah, I forget the double standard. The US would claim exactly as you said for it's allies, but for it's adversaries, it would claim the opposite.
They don't need to enrich uranium for nuclear power plants. The only purpose they could have to enrich uranium is for a weapons program.
Don't use the US. Yes they are hypocrites, but they did not really understand the power of nuclear weapons when they first developed them, and then the Soviets got them with the clear intent that they would use them if given the opportunity. I often wonder that if the Soviets hadn't had the attitude they had, would nuclear weapons have been banned totally in the 1950s? Moot point now. The reality now is the US, the largest and most successful "democracy" (despite all their flaws) doesn't just face one nuclear armed opponent but at least four, and potentially more.
"They don't need to enrich uranium for nuclear power plants"... huh? You know how nuclear power works right? U-235 is the uranium isotope needed for (most) nuclear power stations. Uranium ore is very low in U235, so requires centrifuges to spin out the U235 out of the ore. Enrichment is definitely required for most nuclear power, it's just that it's lower enriched for power stations vs weapons. See the scale here. Japan has it's own enrichment program, importing the ore and processing it for it's own reactors.
Also note Australia has its own enrichment program going on using lasers instead of centrifuges, but it's still in it's infancy. See here.
It's pretty obvious to me why the carbon price is dropping. The analysts are likely saying "Hang on... if a hot war breaks out, is anyone going to be honoring carbon commitments?". Those pieces of paper they are holding are worthless in a hot war, nobody will be honoring any cutting of emissions, or buying credits for building warships. When it comes to carbon emissions, something else is always more important. For the past few years it's been the pandemic, before that is was "the economy" and next it's going to become "victory" over <insert your favourite foe or political system here>.
I think carbon price is falling through fears/hopes that the ETS will collapse completely. It’s been driven by Europe, but Europe is now realising that renewables aren’t adequate for them yet- Russian gas has been papering over a structural under supply of energy. I expect they’ll be going big on nuclear now that the EU has decided it counts as sustainable.
But Russian oil is selling at deep discounts.
If they can even get a bid, on Wednesday last week a major Russian supplier failed to sell three tenders of 6.5m barrels. In effect many refineries, ship owners and banks are self-sanctioning to avoid being tainted by dealing with Russias blood oil and exporters have seen multiple cancelled orders. In addition we've seen ports unwilling to unload shipments of Russian crude.
Effectively there is an embargo in all but name.
Carbon market prices are responding to 'normal' financial market signals, and not climate or IPCC data.
Not really - most of the trading is between speculators who are trying to work out whether investors are going to clean out the Government's reserve at the auction next week (Govt have a $70 floor from memory). The other destabilising factor of course is the Govt consultation on 'natives only' for permanent carbon sink forestry.
Good to see Stuff being called out for the B.S. they publish...."The Truth"
https://i.stuff.co.nz/about-stuff/complaints-and-corrections/127946397/…
Stuff has a decent live blog for things like Occupy Parliamentary Precinct, and their motoring section isn't linked to vehicle sales and is generally better. Other than that, I'm repulsed by Stuff's go woke or go broke attitude lately. Glad Thomas Coughlan left so I still get to read his columns
Note however that the article in question was written by Siouxie Wiles, and not by Stuff journalists. They would have taken her article in good faith, and you wonder whether they will continue to do so. I respect Wiles's communications on science, and perhaps she should stick to that.
Interesting interview with Historian Yuval Noah Harari
"The War in Ukraine Could Change Everything"
RE: China, all I will say is 'I told you so'.
Some of you may recall me, as Fritz, saying about 3 years back (pre covid) that 2022 will be the year things turn to custard economically, because of an international event, financial or otherwise, quite possibly emanating from China's insane property bubble. I also implied it could be a military event, although I certainly didn't precisely say it would be a Russian invasion of Ukraine. I thought that might be more likely Taiwan.
I was laughed at then, just as I have been laughed at for my bearish views on the OCR.
Our petrol prices at the pump are going to go through the roof. The Government needs to look at dropping the percentage of tax on it or it will be just crazy. The government tax take will go up billions and they do absolutely nothing for it, its a total rip off. You can bet they make NO CHANGES and just rake it in despite all that talk of us getting fleeced years ago. Just another reason to kick Labour into touch in 2023.
The taxes on petrol are all set in Cents per Litre, so they don't go up with increasing price, except for GST of course. There is no large windfall for the govt from increasing petrol prices. Quite the opposite, how much petroleum product does the govt buy.. bitumen for roads, fuel for various govt dept vehicles, or charges passed on from contractors for mileage costs etc.
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