Climate change is fast becoming a reality. Extreme weather events are more frequent, more intense and often affect people who (i) can’t afford to deal with them, and (ii) didn’t really contribute to the cause of them. Pakistan contributes only 1% of greenhouse global emissions, but suffers a disproportionate amount of the impact as climate change starts to melt the Himalayan glaciers.
Climate change is a hot topic, with Germany looking to restart their coal fired power stations after years of moving to greener solutions. Europes’ reliance on Russia for natural gas has backfired and suddenly governments across the region are scrambling to pass renewable energy solutions, or at least alternatives to what they have currently. South Africa too has finally started moving in the right direction. Last week Gwede Mantashe submitted three determinations to Nersa for concurrence – a bureaucratic process to allow alternative power sources to be procured. JP Landman wrote an easy to read comment on the electricity review, which you can download by clicking this link.
In short, the minister has made three determinations:
- 14,791 MW of solar, wind and storage capacity is to be procured.
- 1,000 MW of biomass and landfill projects
- 3,000 MW of gas
This would double the total megawatts in procurement. It is significant on a number of levels. It means that the Integrated Resource Plan is being fulfilled and the door is open for projects of around R1,2 trillion to be invested between now and 2030!! That is a lot of investment, which should create a meaningful number of jobs, and will also make South Africa a more investable destination for foreign fixed investment. It also allows us as a country to move away from fossil fuels towards a greener future.
On the topic of climate change, there is a very interesting documentary on Netflix at the moment, called Seaspiracy. It is worth watching, and will open your eyes to the devastating impact to our climate caused by overfishing and the impact it has on our oceans.
The documentary met with a lot of criticism for sensationalising the impact of by-fishing (catching the wrong species of fish when trawling) and for misrepresenting the organisations trying to monitor sustainable fishing practices. There was also praise for the fact that the documentary highlighted the need for awareness of fishing and ocean care. While much of the hype around climate change seems to focus on burping cows, and the destruction of forests and natural habitats, not enough consideration/publicity is given to the role the oceans play and their impact on climate. The amount of CO2 that is consumed by fish (through plankton) and oceanic plant life is enormous.
The show is well worth watching, but sensitive viewers do need to be aware that it can be disturbing. And it might put you off your sushi for a while!!
The offshore markets have had another rout after Mr Powell suggested that he is going to tackle inflation with vigour and will not be swayed by the champagne problems of higher asset prices! He is right – inflation hurts the lower end of the economy more than the top end. I think we are still up in the air on this one – the base effects will start to kick in and when we price oil (for example) against the price it was twelve months ago, it will start falling rapidly from January. An important point to consider however, is that inflation is cumulative – and if the percentage change falls it doesn’t mean that the price gets less. If wages start to increase to accommodate the current rising prices, we could find ourselves in a rising inflation spiral. Mr Powell definitely doesn’t want that to happen. When the inflation genie gets out of the bottle, it is very difficult to get it back in!
We are going to have to wait – again – for more information. The market is divided between whether the Fed will anticipate the fall in inflation and start factoring in rate cuts for next year, or whether they will allow the US economy and potentially the global economy go into full blown recession before they turn to lowering interest rates. The rocky path is not over yet, even though it feels like we’ve been on this path for quite some time now!
As always, please feel free to share your thoughts or ask any questions that might arise. We look forward to hearing from you.
It’s getting hot in here! Or is it just me?
Climate change is fast becoming a reality. Extreme weather events are more frequent, more intense and often affect people who (i) can’t afford to deal with them, and (ii) didn’t really contribute to the cause of them. Pakistan contributes only 1% of greenhouse global emissions, but suffers a disproportionate amount of the impact as climate change starts to melt the Himalayan glaciers.
Climate change is a hot topic, with Germany looking to restart their coal fired power stations after years of moving to greener solutions. Europes’ reliance on Russia for natural gas has backfired and suddenly governments across the region are scrambling to pass renewable energy solutions, or at least alternatives to what they have currently. South Africa too has finally started moving in the right direction. Last week Gwede Mantashe submitted three determinations to Nersa for concurrence – a bureaucratic process to allow alternative power sources to be procured. JP Landman wrote an easy to read comment on the electricity review, which you can download by clicking this link.
In short, the minister has made three determinations:
This would double the total megawatts in procurement. It is significant on a number of levels. It means that the Integrated Resource Plan is being fulfilled and the door is open for projects of around R1,2 trillion to be invested between now and 2030!! That is a lot of investment, which should create a meaningful number of jobs, and will also make South Africa a more investable destination for foreign fixed investment. It also allows us as a country to move away from fossil fuels towards a greener future.
On the topic of climate change, there is a very interesting documentary on Netflix at the moment, called Seaspiracy. It is worth watching, and will open your eyes to the devastating impact to our climate caused by overfishing and the impact it has on our oceans.
The documentary met with a lot of criticism for sensationalising the impact of by-fishing (catching the wrong species of fish when trawling) and for misrepresenting the organisations trying to monitor sustainable fishing practices. There was also praise for the fact that the documentary highlighted the need for awareness of fishing and ocean care. While much of the hype around climate change seems to focus on burping cows, and the destruction of forests and natural habitats, not enough consideration/publicity is given to the role the oceans play and their impact on climate. The amount of CO2 that is consumed by fish (through plankton) and oceanic plant life is enormous.
The show is well worth watching, but sensitive viewers do need to be aware that it can be disturbing. And it might put you off your sushi for a while!!
The offshore markets have had another rout after Mr Powell suggested that he is going to tackle inflation with vigour and will not be swayed by the champagne problems of higher asset prices! He is right – inflation hurts the lower end of the economy more than the top end. I think we are still up in the air on this one – the base effects will start to kick in and when we price oil (for example) against the price it was twelve months ago, it will start falling rapidly from January. An important point to consider however, is that inflation is cumulative – and if the percentage change falls it doesn’t mean that the price gets less. If wages start to increase to accommodate the current rising prices, we could find ourselves in a rising inflation spiral. Mr Powell definitely doesn’t want that to happen. When the inflation genie gets out of the bottle, it is very difficult to get it back in!
We are going to have to wait – again – for more information. The market is divided between whether the Fed will anticipate the fall in inflation and start factoring in rate cuts for next year, or whether they will allow the US economy and potentially the global economy go into full blown recession before they turn to lowering interest rates. The rocky path is not over yet, even though it feels like we’ve been on this path for quite some time now!
As always, please feel free to share your thoughts or ask any questions that might arise. We look forward to hearing from you.
Asset Class Returns
The table below represents a rolling year view of the major asset class returns that we track. It offers a view of the asset classes we use to diversify your portfolio.