A majority of companies are already feeling the climate heat
Over half of the firms surveyed in a recent Morgan Stanley report experienced the climate's impact on operations within the past year, including increased costs, worker disruption and revenue losses. The growing financial impacts are a key reason some companies are continuing to pursue emissions cuts and adapt to a warming world even amid political turbulence, the survey found.
Extreme heat and storms were the leading disruptions, followed by wildfires and smoke, water shortage, and flooding or rising sea levels, according to the new report. The U.S. alone has spent nearly $1 trillion on disaster recovery and other climate-related needs over the past year, a recent Bloomberg Intelligence analysis found.
Data collected by the U.S. Census Bureau shows how these impacts can play out locally: For example, nearly two-thirds of businesses in the Tampa metro area surveyed reported losses due to extreme weather following last year's hurricane season when Helene and Milton made landfall on Florida's west coast.
The impacts are hardly limited to companies operating in the United States. This year's Canadian wildfires forced evacuations of oil sands projects in Alberta, Canada, while a disastrous 2022 flood recently led Toyota to file a lawsuit for over $360 million in damages in South Africa. Extreme heat is forcing Australian mining companies to adapt their operations.
The Morgan Stanley report also included for the first time impacts in the Middle East, North Africa and South America.
The findings show nearly 90% of South American companies expect climate change to be a risk to their business models by the end of the decade. Companies ranked raw material availability and pricing, as well as the risk of existing manufacturing processes becoming obsolete among their top concerns. While being the areas most likely to experience extreme weather, the Middle East and North Africa reported the highest rates of viewing sustainability as a driver of value creation.
The challenges are different in North America, though, where companies see political volatility as the top barrier to investing in sustainability. The backlash to ESG, an investing principle prioritizing environmental issues, social issues and corporate governance, particularly among U.S. Republicans, caused 21% of North American companies to report political hostility as a top barrier to their climate transition. In response, some companies have taken to "greenhushing' — a phenomenon of pushing to meet climate goals while not touting them — while others have rolled back or abandoned their emissions targets.
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Japan Times
6 hours ago
- Japan Times
Data centers and small reactors could change Asia's nuclear dynamic
Notice how hot your cellphone gets when it multitasks on a steamy day? It doesn't take much to make me put my keitai down and worry about it overheating. Multiply that heat by, say, infinity, and you've got the biggest problem that data centers face in an increasingly digital world. An estimated 402.74 million terabytes of data are created each day and storing and processing all that information creates virtual volcanoes. The rise of artificial intelligence is compounding the problem. In a much-cited report released earlier this year, the International Energy Agency (IEA) estimated that electricity demand from data centers worldwide will more than double by 2030 to around 945 terawatt-hours, an amount that exceeds Japan's current entire electricity consumption. By 2035, global data center electricity consumption will increase again by one-third to around 1,200 TWh. (Goldman Sachs reached roughly similar conclusions in reports issued last year.) Data center electricity consumption has grown 12% a year since 2017 — more than four times the rate of total electricity consumption — and last year accounted for around 1.5% of the world's electricity consumption in 2024, or 415 TWh. The U.S. accounted for 45% of that amount, followed by China (25%) and Europe (15%). It's estimated that a typical AI-focused data center consumes as much electricity as 100,000 homes and the largest ones currently under construction will consume 20 times that amount, or the equivalent of 2 million households. A huge part of that demand comes from the cooling systems critical to their operation. New technology such as graphics processing units, needed for increasingly complex computation, consume more power and generate more heat than the central processing units that are more widely used today. It's estimated that cooling systems can account for as much as 40% of a data center's power consumption. The IEA sources 85% of global data center power consumption — and hence data centers — to the U.S., China and Europe. In Japan, data centers account for less than 20 TWh of electricity consumption (about 2% of the total, roughly equivalent to that of Europe). That will change. The transition to Society 5.0, with its deep integration of digital services into daily life, will accelerate demand for computing power. In addition, the Japanese government has made data centers a core component of efforts to increase foreign direct investment in the country to ¥100 trillion by the end of 2030. Japan is already scheduled to add more than 500MW to power its data centers, bringing total capacity for those facilities to 1.5 GW. Consistent with those plans, the IEA concluded that data centers will be responsible for more than half the growth in electricity demand in Japan. The rest of the world accounts for about 10% of total data center electricity generation, with Southeast Asia and India prominent. In many ways, Southeast Asia may be the most interesting — and concerning — place to watch. A BCG report last year anticipated that data center capacity in Southeast Asia would triple by 2030, reaching between 5.2 GW and 6.5 GW, which would make it the world's third hub for such services, behind the U.S. and China. This will, reports the IEA, double electricity demand in the region. As one example, the agency forecast that data centers would be responsible for as much as 20% of the increase in Malaysia's national power demand by 2030. Ambitious politicians, such as Thaksin Shinawatra, Thailand's eminence grise, hope to emulate Japan and use that demand to entice foreign investment. 'We want to be competitive in data centers and AI,' Thaksin said earlier this year. Bangkok has already reportedly secured billions of dollars in investment commitments by technology giants like Amazon and Alibaba. The big question is where they will get their juice. Rising demand is pushing tech giants such as Google, Microsoft and Amazon to invest in nuclear power. This shift, from governments to big companies, as the primary drivers of nuclear power development, has powerful implications that we have been slow to consider. Big nuclear projects remain problematic, with government policies and regulations inhibiting — if not blocking — the sector's development. There is only one nuclear power plant in Southeast Asia — in the Philippines, built 40 years ago but never commissioned. It has never produced a single watt of energy. Yet, in a report issued late last year, the IEA concluded that nuclear power would become part of the region's energy mix by 2035, with installed nuclear capacity ranging from 6 GW to 13 GW by 2050, depending on the scenario. The development of small modular reactors is the wild card. SMRs have a capacity of under 300 MW (small, most conventional reactors produce about 1,000 MW) and their components can be mass-produced and assembled on site (modular). They are also considerably cheaper than traditional nuclear power plants: They cost about $2 billion while conventional reactors can cost more than $10 billion. Thus far, only Russia and China have commercially operable reactors, although the U.S. and Japan are working on the technology. According to the IEA, there are plans to build as much as 25 GW of SMR capacity to supply data centers worldwide, almost all in the U.S., with the first projects expected to go online after 2030. But does the readiness of tech giants to acquire their own nuclear capability change the regional dynamic? SMRs are intended to sidestep the big issues surrounding nuclear power, namely the huge costs required to build the plant and the accompanying grid as well as looming and rightly concerning safety and security issues. SMRs can be installed into an existing grid or remotely off-grid, reducing or even eliminating the infrastructure concerns. They're also thought to be safer and more secure. While those reactors will still be subject to national regulatory frameworks, it seems obvious to me that moving the locus of decision-making away from governments to companies could accelerate the adoption process. Especially when those companies are pursuing business objectives that align with national economic goals — promoting investment and the development of high-tech industries. Companies can move more quickly than governments. Their readiness to assume regulatory and financial burdens helps shift the decision-making dynamic. I checked in with Carl Baker, my colleague at Pacific Forum who has been running programs that explore regional thinking about nuclear energy for nearly two decades. He agreed that 'the potential availability of SMRs has had an impact on thinking about the viability of nuclear technology, especially in Southeast Asia.' But, he added 'the conversation regarding the introduction of nuclear energy as a source of electrical power is still in its early stages and has not gotten into the specific issues related to governance and other regulatory considerations.' He is less sanguine than I about the impact of the private sector's enthusiasm for SMRs. The idea that tech giants can change the prevailing mindset 'is not really an issue in countries that have not developed the national regulatory framework for use of nuclear power as an energy source.' Moreover, 'conglomerates are not going to be able to avoid the bottlenecks and roadblocks any more than large power companies have been.' Finally, Baker said, 'the impetus for accommodating specialized applications is coming primarily from the U.S at this point' and regulators there have been pretty reluctant to let go of overly stringent safety requirements. He is probably right. But in a recent conversation in Southeast Asia about nuclear power and accompanying concerns, local participants approached the problem from the traditional perspective — big nukes, national infrastructure and government bottlenecks. Those are powerful forces but I can't help but wonder if that paradigm is ready for revision. After all, things are heating up. Brad Glosserman is a senior adviser at Pacific Forum and the author of "Peak Japan." His upcoming book on the geopolitics of high-tech is expected to be released by Hurst Publishers this fall.
NHK
8 hours ago
- NHK
Trump signs tariff letters to be sent out to 12 countries on Monday
US President Donald Trump says he has signed a set of letters to be sent to 12 countries notifying them of the tariff rates they will face on their exports to the United States. Speaking to reporters on Friday, Trump said, "I signed some letters to go out for on Monday, probably 12 different amounts of money, different amounts of tariffs and somewhat different statements." He declined to say which countries will receive the letters. Earlier on Friday, Trump said his administration would "probably have 10 to 12 letters" go out first, followed by more over the next few days. He also said he thinks "they will be fully covered" by Wednesday. Trump said the tariffs will range in value "from 60 or 70 percent to 10 or 20 percent", and that the countries will start to pay the levies on August 1. The Trump administration is expected to continue last-minute negotiations with its trade partners as the pause in what it calls reciprocal tariffs is due to expire on Wednesday.
Japan Times
12 hours ago
- Japan Times
Beijing braces for U.S. trade deals that aim to shut out China
The trade truce between Washington and Beijing may be holding for now, but China is increasingly wary about what's happening elsewhere: U.S. efforts to forge deals that could isolate Chinese firms from global supply chains. Ahead of a July 9 deadline, U.S. officials are deep in talks with major trading partners in Asia and Europe, pushing for new agreements that would include restrictions on Chinese content, or secure commitments to counter what Washington sees as China's unfair trade practices. In the first such deal, U.S. President Donald Trump on Wednesday announced a tiered tariff agreement with Vietnam. Exports to the United States from the Southeast Asian nation will be charged a 20% rate, Trump said in a social media post, with 40% levied on any goods deemed to be transshipped through the country. That will hit products with components from China and possibly other nations, which are routed through Vietnam or subject to only minimal final assembly before being exported to the U.S. The approach mirrors provisions in an existing U.S. trade agreement with Mexico and Canada. Although Trump shared the broad contours of the agreement, the White House has not yet released further details, and some of the agreement could be in development, so it's unknown yet how damaging this could be for China's growing exports to Vietnam. China's Ministry of Commerce didn't respond immediately to a request for comment. India, another nation seen as close to a deal, has also been negotiating over "rules of origin.' Washington wants at least 60% of a product's value added locally to qualify as "Made in India' and benefit from the deal, it was previously reported. India has pushed to bring that down to around 35%, according to the report. "Asia's dilemma when it comes to Trump's trade war is all about dependence on U.S. final demand while relying heavily on China's value added in domestic production,' Alicia Garcia Herrero, Asia-Pacific chief economist at Natixis, said in a recent report, adding that Vietnam, Cambodia and Taiwan were among the most exposed. China, a larger trade partner than the U.S. for most Asian economies, has warned of consequences if its interests are threatened, and Foreign Minister Wang Yi is likely to raise that again on his visit to Europe this week for talks in Belgium, Germany and France. "China firmly opposes any party reaching a deal at the expense of Chinese interests in exchange for so-called tariff reductions,' the Ministry of Commerce said in a statement Saturday, repeating earlier warnings. "If this happens, China will never accept it and will resolutely counter it to safeguard its legitimate rights and interests.' The Vietnam deal risks provoking retaliatory steps from China, according to Bloomberg Economics. "Beijing has made clear that it would respond to deals that came at the expense of Chinese interests and the decision to agree to a higher tariff on goods deemed to be 'transshipped' through Vietnam may fall in that category,' Bloomberg's Rana Sajedi wrote in a research note. Trump's 90-day pause on what he called "reciprocal' tariffs on dozens of America's trading partners ends on July 9. Unless those countries reach trade deals with the U.S., they could potentially face much higher tariffs. Some governments are making moves to stay on the right side of Washington. Vietnam, Thailand and South Korea have all put in place measures to stop goods from being rerouted through their countries to the U.S. since Trump's tariffs were unveiled in April. South Korean customs announced a crackdown on transshipments, citing a rise in the practice. Taiwan's President Lai Ching-te also flagged the issue and followed up with new rules requiring all U.S.-bound exports to carry a legal declaration they were made on the island. Chinese Foreign Minister Wang Yi in Brussels on Wednesday | Bloomberg Another concern for Beijing is whether the U.S. could convince others to impose or tighten export controls on high-tech equipment, which would further hamper Chinese efforts to buy the tools it needs to produce advanced semiconductors. Taiwan in June added Huawei Technologies and Semiconductor Manufacturing International Corp. to its so-called entity list, barring Taiwanese firms from doing business with them without government approval. The pressure isn't limited to Asia. Europe, too, finds itself in a delicate position. The EU is China's largest export destination for electric vehicles, and investment from Chinese firms into the bloc plus the U.K. hit €10 billion ($12 billion) last year, according to recent research from Rhodium Group. Yet trade tensions are rising. European Commission President Ursula von der Leyen recently accused Beijing of "weaponizing' rare earths and magnets and warned of the risks posed by Chinese overcapacity. Beijing is particularly concerned that the EU might sign up to provisions similar to those in the U.K.'s deal with the U.S., which included commitments around supply chain security, export controls, and ownership rules in sectors like steel, aluminum and pharmaceuticals. While the language did not name China, Beijing criticized the agreement in a rare public statement, interpreting it as a direct challenge, the Financial Times reported. "China is clearly worried that the EU will accept the same wording as the U.K. did on export controls,' said Joerg Wuttke, a partner at the Albright Stonebridge Group in Washington and former president of the EU Chamber of Commerce in China. "They are pushing the EU not to do this, and the U.S. is pushing the EU to do it.' Brussels and Washington are aiming to reach some form of an agreement before July 9, when Washington is set to impose a 50% tariff on nearly all EU products. With European exports to the U.S. worth more than double the amount to China, the bloc sees Washington as the more important partner, giving the U.S. leverage in the talks. China's weekend statement is "obviously aimed entirely at Brussels,' said Hosuk Lee-Makiyama, director of the European Centre for International Political Economy in Brussels, who was recently in Beijing for meetings ahead of an EU-China summit this month. "China is concerned what the EU might agree with the U.S.' The long-term risk for Beijing is that these efforts coalesce into a broader shift — not just a U.S.-led campaign to curb Chinese exports, but a reshaping of global trade around "trusted' supply chains, with China increasingly on the outside. In a visit to Southeast Asia earlier this year, Chinese leader Xi Jinping urged the region to stand together as an "Asian family,' warning against trade fragmentation. Beijing has often responded to actions it opposes with targeted trade measures. When the EU imposed tariffs on Chinese electric vehicles last year, China launched antidumping probes into European brandy, dairy and pork. It halted Japanese seafood imports in 2023 after Group of Seven meetings in Japan were seen as critical of China. A spat with Australia in 2020 led to trade restrictions on billions of dollars' worth of goods, including lobsters, wine and barley. "If some agreements explicitly list China as a target and show that some countries are cooperating or collaborating with the U.S. to 'contain China,' then China will definitely respond,' said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing and a former adviser to the Chinese Commerce Ministry.
