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<ul><li>
Australia Prime Minister has announced $1.4 billion funding for the National Bushfire Recovery Agency. </li><li>Australian fires have burnt four times the area of the Amazon wildfires, which could cost Brazil $3.5 trillion over the next years.</li><li>Fires in Indonesia last year cost the country $5.2 billion, although they only burned one-third the area of Australia's fires.</li></ul>Australia's wildfires seem to have simmered down a bit as light rain and cool winds blew over the country. As the Australian authorities take a moment to assess the damage, Prime Minister Scott Morrison announced $1.4 billion funding for the newly formed National Bushfire Recovery Agency.<br /><br />
	
  
  
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<br />The cost of these fires, however, may be much greater. The Australian blaze in three states — New South Wales, Queensland and Victoria — burned over five times the amount of area that the Amazon wildfires in Brazil did last year.<br /><br />That is enough to cover all of the Netherlands and half of Belgium, according to <a href="https://graphics.reuters.com/AUSTRALIA-BUSHFIRES-MAP/0100B4TW2NK/index.html">Reuters.</a> <br /><br />
  
  
  
  
  
  
  
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<br /><strong>Australia versus the rest of the world<br /></strong><br />Ecologists estimate that the die-back from the Amazon could hit anywhere from $957 billion to $3.5 trillion <a href="https://www.pnas.org/content/pnas/115/46/11671.full.pdf">over the next 30 years</a>. Full recovery of the area could take <a href="https://www.theverge.com/2019/9/10/20858834/amazon-fire-brazil-forest-harm-recovery-century">centuries</a>.<br /><br />
  
  
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At the time, it had already cost the Brazil government's Guarantee of Law and Order Operation (<a href="https://thewire.in/environment/amazon-fires-are-symptomatic-of-greater-problem-rampant-deforestation">GLO</a>) $22 million. <a href="https://www.vox.com/energy-and-environment/2019/8/30/20835091/amazon-rainforest-fire-wildfire-bolsonaro">G7 countries</a> pledged another $20 million to help Brazil <a href="https://www.nbcnews.com/news/world/why-it-will-take-more-20m-help-brazil-put-out-n1046926">in addition</a> to Britain's $12 million and Canada's $11 million.<br /><br />In Australia, the Insurance Council estimates that damages will hit at least $260 million — four times the amount that Brazil had at its disposal. And, even that might be an underestimation of the true extent of the damage.<br /><br />
  <div type="image" title="wildfires" msid="73121010" hostid="261" caption="&amp;lt;p&amp;gt;Percentage of area burnt by fires in Australia compared to the US, Indonesia and Brazil&amp;lt;/p&amp;gt;"></div>


<br />Indonesia's land and forest fires, only one-third as vast compared to Australia's fire, cost the country <a href="https://news.mongabay.com/newsletter/newsletter-2019-12-26/">$5.2 billion</a>.<br /><br />In the US, damage from the California wildfires was <a href="https://www.bloomberg.com/news/articles/2019-10-28/california-fire-damages-already-at-25-4-billion-and-counting">estimated</a> at $25 billion. <br /><br />
  
  
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<br />All of these fires pale in comparison to what's happening in Australia. It is highly unlikely that $1.4 billion can cover it. At least 23 people are dead and many more are still missing after massive evacuations.<br /><br />In addition to the human cost, nearly half a billion animals have been lost to the natural calamity. The Royal Botanical Gardens in Sydney estimates that 30 rare plants and <a href="https://www.businessinsider.in/international/news/raging-australian-bushfires-kill-2000-vulnerable-koalas/articleshow/72434318.cms">animals have perished</a>. As much as 48% of the Gondwana reserves, and forests from the age of the dinosaurs, have been destroyed. <br /><br /><strong>See also:<br /><a href="https://www.businessinsider.in/amazon-wildfire-carbon-monoxide-map-by-nasa-shows-affect-on-rest-of-the-world/articleshow/70837821.cms">This map shows how carbon monoxide from the Amazon wildfires is affecting the world</a><br /><br /><a href="https://www.businessinsider.in/science/news/stunning-images-from-space-reveal-the-shocking-extent-of-australias-bushfire-crisis/articleshow/73077123.cms">Stunning images from space reveal the shocking extent of Australia's bushfire crisis</a></strong><br />

Amazon wildfires will cost Brazil trillions of dollars— damage from Australia's bushfires maybe 5 times greater

Deforestation in the Brazilian <keyword id="567660" type="PERSON" weightage="20" keywordseo="Amazon-rainforest">Amazon rainforest</keyword> has hit a monthly record of 1,034.4 square kilometres in June, the government reported.<br /><br />The National Institute for Space Research (INPE) at the Ministry of Science, Technology and Innovation revealed in a report on Friday that deforestation in June was 10.6 per cent higher than in the same month of 2019, and 24.31 per cent higher than May this year, reports Xinhua news agency.<br /><br />According to the report, the <keyword id="8019341" type="UNKNOWN" weightage="20" keywordseo="worlds-largest-rainforest">world's largest rainforest</keyword> witnessed 2,248 fires in June, the highest level for the month of June in 13 years.<br /><br />Additionally, areas totalling 3,069.57 square kilometres were deforested in the first half of the year, an increase of 25 per cent compared to the same period in 2019.<br /><br />The figures came at a time when the Brazilian government is receiving harsh criticism from the international community for its alleged lack of commitment in combating the destruction of the Amazon.<br /><br />On Thursday, Vice President Hamilton Mourao led a meeting with a group of international investors, who publicly expressed their disagreement with the country's environmental policy.<br /><br />The official stated that investors had demanded environmental policies that produced results, and he promised a stronger effort from the government in reducing high rates of deforestation.<br /><br />Deforestation in the region has soared since President Jair Bolsonaro took office last year, according to conservation groups.<br /><br />He has argued that more farming and mining in protected areas of the forest were the only way to lift the region out of poverty.<br /><br />Bolsonaro's environmental policies have been widely condemned but he has rejected the criticism, saying Brazil remains an example for conservation. <br /><br /><strong>SEE ALSO:<br /><a href="https://www.businessinsider.in/the-amazon-rainforest-is-burning-heres-why-there-are-so-many-fires-and-what-it-all-means-for-the-planet-/articleshow/70818992.cms">The Amazon Rainforest is burning. Here's why there are so many fires and what it all means for the planet.</a><br /><br /><a href="https://www.businessinsider.in/science/environment/news/amazon-wildfires-will-cost-brazil-trillions-of-dollars-damage-from-australias-bushfires-maybe-5-times-greater/articleshow/73120609.cms">Amazon wildfires will cost Brazil trillions of dollars— damage from Australia's bushfires maybe 5 times greater</a><br /><br /></strong><a href="https://www.businessinsider.in/international/news/a-global-coalition-is-demanding-intervention-from-brazil-to-protect-amazon-tribes-on-the-eve-of-a-genocide-from-coronavirus/articleshow/75540331.cms"><strong>A global coalition is demanding intervention from Brazil to protect Amazon tribes 'on the eve of a genocide' from coronavirus</strong></a><br />

Amazon rainforest is losing more trees than ever with record number of fires raging in June

Climate Action 15: 2024's top global innovators powering green solutions

<p><a href="https://www.businessinsider.com/one-planet"></a></p><div type="image" title="View of the beach at Akumal with lots of sargassum algae, Yucatán Peninsula, Mexico." height="3000" width="4000" msid="100481177" hostid="261" sizebytes="1733388"></div><ul class="summary-list"><li>Brown seaweed — known as sargassum — causes havoc for coastal communities.</li><li>But it could also provide an opportunity to build massive carbon stores at the bottom of the ocean.</li><li>London-based Seaweed Generation is one such startup dedicated to seaweed sequestration.</li></ul><p>Patricia Estridge's birthday celebrations have always coincided with bonfire night on November 5, when the UK marks <a href="https://www.britannica.com/biography/Guy-Fawkes" target="_blank" rel="noopener">Guy Fawkes' failed attempt to blow up parliament.</a></p><p>For as long as she can remember, she's watched a torchlit procession of local residents in fancy dress march through her hometown in the southeast of England to an enormous bonfire in an ode to the Gunpowder Plot of 1605.</p><p>Nowadays, those bonfires remind Estridge more of the climate crisis than of any botched attempt at regicide.</p><p>The former Google staffer and software engineer experienced the brutal reality of the climate crisis firsthand when she lived in California during a wave of destructive wildfires.</p><p>"I thought: 'Oh, interesting, someone's having a bonfire. That's unexpected,'" she told Insider. "Then I realized it wasn't a bonfire at all — the state was on fire."</p><p>A few weeks of soul searching while locked indoors away from the plumes of smoke set Estridge on a path that ultimately led her to cofound Seaweed Generation, a climate-tech startup dedicated to sequestering carbon dioxide deep in the ocean, in 2021. She's part of a wave of new "blue economy" entrepreneurs taking advantage of seaweed for carbon removal.</p><p>Seaweed is an attractive play to investors and environmentalists thanks to its ability to rapidly absorb carbon and the well-established supply chains used to transport it in areas including food, biofuels, and beauty products. <a href="https://affiliate.insider.com?h=97e82f3af971f23455aed41582c16da4ea9baad319a28a906f45af9d8ecbbd9b&amp;postID=64550c19aa849955be1ab189&amp;site=bi&amp;u=https%3A%2F%2Fwww.nature.com%2Farticles%2Fngeo2790.epdf%3Fsharing_token%3DT4dBWJ1vxxAd4UCi7UxDitRgN0jAjWel9jnR3ZoTv0Ny46oKhbaOO7dWz_Gf1vBD8y_zU5TDrWK6CI_eWLUw5Np5tgB00QMW_rT6OUO5XEe4RtB_MZsRJbReNkKxKXOHRNYRI5ifPp5nEfj_cz0RlOr2fYIAaUyeJdFELSqQZehj_Eg7yfmZaB0Gm9ednYtXfbC_YpLNLT2YPCof5ePR447TUHlwIYss0lYWmfF5MoI%253D%26tracking_referrer%3Dwww.technologyreview.com" target="_blank" rel="noopener">Seaweed sequesters an estimated 175 million tons</a> of carbon annually as it sinks into the deep sea — around 0.5% of global emissions.</p><h2>Sargassum has exploded in recent years </h2><p>Estridge wants to help transform the Great Atlantic Sargassum Belt — a 5,000-mile stretch of floating seaweed that's visible from space — from a plague on coastal towns to an enormous carbon store rooted to the bottom of the sea.</p><p>Sargassum, a catch-all term for brown seaweed, is naturally occurring and isn't a problem in itself, but comes with some considerable drawbacks when it beaches or comes into shallow water.</p><p>"Sargassum stinks like sewage when it rots, it's absolutely disgusting," Estridge said. When it rots, it gives off arsenic and a toxic gas called hydrogen sulfide, which is responsible for its egg-like stench. It also attracts insects, can smother sea-turtle nesting sites, and blocks light from reaching coral reefs, Stephen Leatherman, a coastal ecologist, said.</p><p>Large deposits of seaweed can also cause problems for locals when they near the coastline. "I've seen it so thick you can't launch a boat in it; people can't get their boats off the beach," Leatherman added.</p><p>The belt has appeared in the Caribbean Sea nearly every summer since 2011, according to the <a href="https://optics.marine.usf.edu/projects/saws.html" target="_blank" rel="noopener">Optical Oceanography Lab</a>. The brown tide has been a source of creeping chaos and had a record bloom in March at <a href="https://optics.marine.usf.edu/projects/SaWS/pdf/Sargassum_outlook_2023_bulletin3_USF.pdf" target="_blank" rel="noopener">13 million tons</a>, causing havoc to coastal communities and tourism across the Caribbean, the Gulf of Mexico, and the state of Florida. The negative impacts of the belt are expected to worsen with its total quantity poised <a href="https://optics.marine.usf.edu/projects/SaWS/pdf/Sargassum_outlook_2023_bulletin4_USF.pdf" target="_blank" rel="noopener">to continue increasing</a> over the next few months.</p><p>Sargassum grows faster in warmer water — and <a href="https://www.theguardian.com/environment/2023/apr/26/accelerating-ocean-warming-earth-temperatures-climate-crisis" target="_blank" rel="noopener">oceans hit record temperatures in March</a> — but some scientists pin its explosion to <a href="https://affiliate.insider.com?h=f792bcb7136c5b58290ab3b00a08710c4ca6366196ce43e9da65d3e8ca357d03&amp;postID=64550c19aa849955be1ab189&amp;site=bi&amp;u=https%3A%2F%2Fwww.nature.com%2Farticles%2Fs41467-021-23135-7" target="_blank" rel="noopener">chemical runoff from agriculture</a> in the Amazon that feeds the seaweed.</p><p>"Where we see it really becoming so massive is off Brazil, near the Amazon River," Leatherman said. Ocean warming alone can't explain the quantity of sargassum present today, he added.</p><div type="image" title="The Seaweed Generation team at the site of trials in Scotland, UK." height="2250" width="3000" msid="100481179" hostid="261" sizebytes="575870"></div><h2>The seaweed Roomba</h2><p>Estridge's Seaweed Generation has developed a robot that she described as a "Roomba meets Pac-Man."</p><p>"What it does is relatively simple," Estridge said. The robot intercepts seaweed by scooping it into its "mouth" and takes it around 200 meters below the surface where the pressure of the ocean crushes sargassum's air bladders, so it can no longer float. The robot then releases the seaweed so it can sink to the sea floor and comes back to the surface.</p><p>Miami-Dade County is spending around <a href="https://www.miamiherald.com/news/local/environment/climate-change/article273912380.html" target="_blank" rel="noopener">$6 million</a> on removing the seaweed this year, while others are scrambling to stop it from shoring in the first place. Mexico even sought <a href="https://thecancunsun.com/mexican-navy-installs-sargassum-barriers-in-these-mexican-caribbean-hotspots/" target="_blank" rel="noopener">help from the Navy</a>. Floating barriers, designed to contain oil spills, are also being used to keep sargassum off beaches, Leatherman said.</p><h2>Questions remain around permanence and scale</h2><p>If seaweed is dropped to <a href="https://eprints.ncl.ac.uk/file_store/production/274187/C3C8A8EA-13C8-4FCE-9CEB-BE9F8FC2A7ED.pdf" target="_blank" rel="noopener">1,000 meters and secured on the ocean floor</a>, it is considered a long-term carbon store. "It's so far the biggest kind of carbon sink on Earth," Estridge said. But one of the big challenges in this is proving the seaweed stays there, she added.</p><p>This is the sticking point for Brennan Spellacy, the CEO and a cofounder of Patch, which helps companies offset emissions by investing in carbon-removal projects. </p><p>"The crux of blue carbon is actually going to be storage and monitoring," he said. "How do you have higher-certainty ways to ensure durability is there? Kelp and algae are phenomenal carbon removers, it is the storage conversation that needs to be sorted out."</p><p>Seaweed Generation will work in waters with around 4,000 meters of depth and no <a href="https://oceanservice.noaa.gov/facts/upwelling.html#:~:text=Winds%20blowing%20across%20the%20ocean,is%20known%20as%20%E2%80%9Cupwelling.%E2%80%9D" target="_blank" rel="noopener">upwelling current</a>, which could bring sargassum back to the surface.</p><p>At the same time, its device will gather data on relevant data, including GPS location, water depth, temperature, and the volume of seaweed the sargassum sinks. The device will also take a video.</p><div type="image" title="Drone footage of Seaweed Generation's device in trials in Scotland, UK." height="1478" width="1971" msid="100481180" hostid="261" sizebytes="259730"></div><p>A key question for Leatherman is who will pay for private companies to take on "the Great Sargassum Monster," as he called it. Seaweed Generation has a planned pilot with the government of Antigua, which is invested in protecting its tourism industry.</p><p>Long-term, Estridge hopes to generate revenue via carbon credits, one of which would represent one ton of CO2 sequestered from sinking sargassum. Patch said that seaweed-sinking carbon-credit purchases on its platform increased by nearly 200% from the final quarter of last year to the first quarter of 2023.</p><p>But the problem is simply too great, Leatherman said. "They'll never get it all," he added. Still, he welcomed any effort that could help and reduce cleanup costs.</p><p><em>In case you missed it, </em><a href="https://www.youtube.com/live/xlSZrPlRGbA?feature=share" target="_blank" rel="noopener"><em>watch a replay</em></a><em> of Insider's One Planet virtual event with activist and artist Elijah McKenzie-Jackson.</em></p>

Meet the climate startup turning a 5,000-mile stretch of seaweed from a plague of coastal communities into a giant carbon store

<ul class="summary-list"><li>Researchers recorded thousands of hours of sounds in the Brazilian Amazon.</li><li>In forests hit by <a href="https://www.businessinsider.com/fires-in-the-amazon-rainforest-were-started-by-humans-2019-8">repeated blazes</a>, sounds were sparse — a clue that <keyword id="12228907" type="UNKNOWN" weightage="60" keywordseo="biodiversity" source="Orion">biodiversity</keyword> is degrading. </li></ul><p><a href="https://www.businessinsider.com/why-amazon-rainforest-is-important-life-support-is-burning-2019-8">The Amazon</a> is the world's largest rainforest, covering more than 2 million square miles. A <a href="https://www.businessinsider.com/amazon-rainforest-reaching-tipping-point-deforestation-experts-warn-2019-12">slew of studies</a> have captured how this hotspot for biodiversity has been threatened by escalating farming, logging, and wildfires. Now, researchers have gone beyond seeing those changes — they're also listening to them.</p><p>In a research article published last week in the <a href="https://www.pnas.org/doi/10.1073/pnas.2102878119">Proceedings of the National Academy of Sciences</a>, researchers from the University of Maryland recorded thousands of hours of sounds in 39 forests. The forest sites were recovering from either recent or decades-old fires, as well as from being cleared for logging and agriculture. The acoustics, which were combined with airborne satellite data, were recorded during September and October of 2016. The researchers found that in forests where blazes happened repeatedly, communication between animals was quieter than in forests that were logged or burned only once.</p><div type="image" title="Aerial view of a fire  in the agriculture town of Ruropolis, Para state, northen Brazil, on September 6, 2019." height="2322" width="3097" msid="91289694" hostid="261"></div><p>"Fire causes the community to completely change," Anshuman Swain, a University of Maryland ecologist and coauthor of the study, told Insider. Researchers tuned in to every grunt, chirp, and click uttered in the forest and captured in their recordings to see how the habitats had changed.</p><p>"When we walk outside in the morning in the spring, we hear the sounds and we're like, 'Oh, spring is here.' Sounds are a pretty good indicator of what species are around you, especially in rainforest, where there is huge diversity," Swain said.</p><p>Crudely, the more snippets of communication in the form of animal sounds mingled together in the recording, the greater the variety of animals species — thus, a more biodiverse environment. If the collective sounds from organisms in a given habitat are sparse, it's a clue that biodiversity is degrading. This kind of eavesdropping fieldwork is called acoustic monitoring. It's a relatively inexpensive way to assess an ecosystem's health, and could provide insights into <a href="https://www.businessinsider.com/birds-disappearing-in-north-america-2020-1">biodiversity</a> and how climate change is affecting it.</p><p>Or as Swain put it, it's "a low-cost indicator of how badly we have damaged the environment."  </p><h2>Creepy critters are under threat </h2><h2><div type="image" title="A Passion Flower Butterfly after a rainforest in the Peruvian Amazon was cleared and burned for farmland." height="3387" width="4517" msid="91289697" hostid="261"></div></h2><p>The study adds to a firehose of recent research underscoring the toll of climate change — which intensifying <keyword id="12459828" type="UNKNOWN" weightage="60" keywordseo="deforestation" source="Orion">deforestation</keyword> contributes to — on the natural world. Last week, researchers reported <a href="https://www.nature.com/articles/s41586-022-04644-x">in the journal Nature</a> that the world's <a href="https://www.businessinsider.com/insect-apocalypse-ecosystem-collapse-food-insecurity-2019-11">insect populations</a> were in dramatic decline due to rising global temperatures and habitat loss. In some areas, overall insect populations dropped by nearly half. </p><p>That's a foreboding finding, considering Swain's team identified <a href="https://www.businessinsider.com/insects-dying-off-sign-of-6th-mass-extinction-2019-2">insects</a> getting quieter as the main marker of biodiversity loss in the recent soundscape study. "They perform all these ecosystem services in an invisible way. So their going away is very bad for the forest in the larger scheme of things," Swain told Insider, adding that insects are "not usually covered in most general biodiversity surveys."</p><p>On Thursday, another sobering <a href="https://research.wri.org/gfr/forest-pulse">analysis</a>, published by the World Resources Institute, found that the world is losing 10 soccer fields worth of tropical forest per minute, predominantly due to logging and fires. Of primary rainforest lost in 2021, meaning rainforest that is very old and relatively undisturbed by humans, 40% was in <a href="https://www.businessinsider.com/bolsonaro-plan-to-develop-amazon-rainforest-2019-1">Brazil.</a></p><p>"We've got 20 years of data showing the persistent annual loss of millions of hectares of primary tropical forests alone," said Frances Seymour, a senior fellow at the World Resources Institute, <a href="https://www.theguardian.com/environment/2022/apr/28/destruction-of-pristine-rainforest-globe-relentless-rate-aoe">according to The Guardian.</a> "We already knew that such losses are a disaster for the climate. They're a disaster for biodiversity. They're a disaster for Indigenous peoples and local communities."</p><p>"We have to dramatically reduce emissions from all sources. No one should even think any more about planting trees instead of reducing emissions from fossil fuels. It's got to be both and it's got to be now before it's too late," Seymour added.</p>

Deforestation and logging aren't just decimating the Amazon's forests. They're making them quieter.

<ul class="summary-list"><li>The <a href="https://www.businessinsider.com/climate-crisis-could-turn-around-this-decade-ipcc-report-2022-4">climate crisis</a> is making our food systems vulnerable, and scientists expect it to get worse.</li><li><a href="https://www.businessinsider.com/heat-waves-are-dominating-summer-and-its-not-abnormal-anymore-2022-7">Extreme weather</a> and long-term environmental changes harm crops, livestock, and fisheries.</li><li>Researchers and scientific reports answer key questions about food and the <a href="https://www.businessinsider.com/biden-climate-declaration-follows-inaction-from-congress-2022-7">climate crisis</a>.</li></ul><p>In Kansas, more than 2,000 cattle died in a record <a href="https://www.businessinsider.com/photos-maps-extreme-heat-could-last-weeks-2022-6">heat wave</a>. In Tunisia, <a href="https://www.reuters.com/business/environment/heat-wave-fires-damaging-tunisias-grain-harvest-2022-06-27/">fires</a> razed fields of grain to the ground. In southern China, historic <a href="https://www.cnn.com/2022/06/20/world/southern-china-southern-severe-flood-rain-climate-crisis-intl-hnk/index.html">flooding</a> damaged almost 100,000 hectares of crops. In northern Italy, a farm lobby <a href="https://www.reuters.com/business/environment/drought-threatens-northern-italys-crops-lobby-warns-2022-06-17/">warned</a> that drought could claim half the region's agricultural output.</p><p>That was just June.</p><p>The global food supply is taking a hit from pandemic-driven labor shortages, supply-chain disruptions, and the war in Ukraine. Underlying it all is the climate crisis.</p><p>"Without a doubt, it's always there. And it's now always going to be there," said Ed Carr, the director of the International Development, Community, and Environment Department at Clark University.</p><div type="image" title="woman crouches in dry cracked field filled with small withered brown plants" height="1533" width="2044" msid="93282577" hostid="261"></div><p>Rising temperatures have been changing weather conditions and ecosystems across the planet for decades, before the pandemic or the war began. That's chipping away at the security of our food system and priming it for new crises.</p><p>It's not all bad news, but the future of food hangs in the balance. Here's what experts, scientific studies, and international climate reports tell us.</p><h2>Remind me: What is climate change? What's the big deal?</h2><p>When humans burn coal and oil for fuel, that releases carbon dioxide. The gas's concentration in the atmosphere has increased 50% since 1850, and the rate of increase has tripled since the 1960s. All that carbon dioxide (plus other emissions, such as methane, from our agriculture, garbage dumps, and land destruction) is trapping more and more of the sun's heat, raising global temperatures.</p><p>Since 1850, humans' fossil-fuel dependence has caused global average temperatures to rise about 1.1 degrees Celsius, and scientists warn that we may face a catastrophic 1.5 degrees of warming in 20 years. That may not sound like much, but it's altering the planet's weather and ecosystems, to the detriment of global food supplies.</p><h2>So how exactly are climate change and the food crisis connected?</h2><div type="image" title="farmer stands in the distance in black charred smoking wheat field" height="1587" width="2116" msid="93282579" hostid="261"></div><p>Climate change is making droughts, floods, wildfires, and heat waves more severe and more frequent, according to the sixth assessment of the United Nations' Intergovernmental Panel on Climate Change, published in installments over the past year.</p><p>Scientists can't link every individual event to climate change, but research <a href="https://www.ipcc.ch/report/ar6/wg1/">shows</a> that rising temperatures affect the overall occurrence of extreme weather. Such events can devastate crops and kill livestock, as they did in Kansas, Tunisia, China, and Italy in June.</p><div type="image" title="woman shakes corn in a tray beside flooded field" height="1531" width="2042" msid="93282581" hostid="261"></div><p>Climate change also does long-term, chronic damage to our food systems.</p><p>As baseline temperatures steadily rise, scientists fear some regions of the world will become inhospitable to the foods economies rely on. Several <a href="https://www.pnas.org/doi/10.1073/pnas.1701762114">studies</a> have shown that rising temperatures can cut yields for the staple crops that account for two-thirds of all the calories humans eat: wheat, rice, maize, and soybean. Last year, a NASA <a href="https://climate.nasa.gov/news/3124/global-climate-change-impact-on-crops-expected-within-10-years-nasa-study-finds/">study</a> projected that the climate crisis would drive a 24% decline in yields of maize — a crop that factors into countless food products and feeds livestock across the globe.</p><div type="image" title="dry brown corn plants" height="1605" width="2141" msid="93282583" hostid="261"></div><p>"Most of the large grain-producing regions in the world are seeing some kind of climate signal, some kind of climate stress," said Carr, who is also a coauthor on the IPCC report.</p><p>In 2021, Cornell University researchers <a href="https://affiliate.insider.com?u=https%3A%2F%2Fwww.nature.com%2Farticles%2Fs41558-021-01000-1%23author-information">calculated</a> that global farming productivity was already 21% lower than it would be without climate change. Other <a href="https://health2016.globalchange.gov/food-safety-nutrition-and-distribution">research</a> suggested that rising carbon-dioxide levels <a href="https://iopscience.iop.org/article/10.1088/1748-9326/abfcfa">deplete nutrients</a> in some crops.</p><p>"We see slightly less protein, less iron, less zinc in the grains at higher CO2 levels," said Toshihiro Hasegawa, who studies rice and co-led the IPCC report's chapter on food. "That's really concerning, alarming for people who depend mostly on the diet of the main staple foods."</p><div type="image" title="two people wearing headlamps bend over planting rice in a flooded field in the dark" height="1533" width="2044" msid="93282585" hostid="261"></div><p>The oceans, too, are heating up. That's forcing the migration of fish populations — a critical source of protein for billions of people. <a href="https://www.nytimes.com/2019/11/29/climate/climate-change-ocean-fish-iceland.html">Iceland</a>, for example, is losing key fish, such as capelin and cod, as they swim north for cooler waters. Rivers are warming as well, driving a decline in salmon populations in the northwest US.</p><p>The oceans have also become <a href="https://www.climate.gov/news-features/understanding-climate/climate-change-atmospheric-carbon-dioxide">30%</a> more acidic as they absorb some of the carbon dioxide that human activities have added to the atmosphere. Shellfish, such as oysters, clams, and mussels, can't escape warming and acidifying waters, so they're more <a href="https://doh.wa.gov/community-and-environment/climate-and-health/shellfish">prone</a> to <a href="https://www.washingtonpost.com/world/2021/07/08/canada-sea-creatures-boiling-to-death/">die-offs</a>.</p><p>The IPCC report <a href="https://www.ipcc.ch/report/ar6/wg2/downloads/report/IPCC_AR6_WGII_FinalDraft_Chapter05.pdf">said</a> the effects of climate change on particular fish populations were understudied, but it concluded that ocean warming and acidification were depleting fish stocks.</p><p>Overall, the IPCC has already documented declines in food quality or yield on every continent because of climate change, as shown in the map below.</p><h2>That sounds bad. Is that the worst of it?</h2><p>No. If we don't reel in emissions, up to 10% of the planet's current crop and livestock areas could become unsuitable for agriculture by 2050, the IPCC projected.</p><p>Especially in Africa, Australia, and the Mediterranean, scientists expect that heat and water scarcity will strain agriculture. If global temperatures rise 2 degrees Celsius above the preindustrial standard — which is well within our current trajectory — the IPCC expects increased malnutrition, mostly in sub-Saharan Africa, South Asia, Central and South America, and on small islands. Many of these places already struggle with hunger, and it could get much worse.</p><div type="image" title="women in colorful cloth line up with buckets pots bowls and jugs" height="1509" width="2300" msid="93282587" hostid="261"></div><p>"Unless we, as a global community, make very significant cuts to our greenhouse-gas emissions, we can anticipate having many more crises and incidents of acute food insecurity, as well as impacts in terms of food prices," said Rachel Bezner Kerr, the other coleader of the IPCC report's chapter on food.</p><p>Climate change also means increasing risks to food safety. This year in the US, an avian flu outbreak drove an <a href="https://www.washingtonpost.com/business/2022/04/16/bird-flu-egg-prices/">almost 300% increase</a> in the price of eggs. The IPCC warns that there will likely be more infectious-disease outbreaks as rising temperatures allow new pests and pathogens to overlap with livestock and crops.</p><h2>Will my favorite foods get more expensive or hard to find?</h2><div type="image" title="Grocery store shopper inflation" height="1544" width="2058" msid="93282589" hostid="261"></div><p>It's unclear. Many factors influence food prices, including labor supply, international relations, efficiency of food production, and consumer demand for particular foods.</p><p>For now, major foods aren't in imminent danger of disappearing, but a few consumer favorites, such as coffee, chocolate, and wine, are especially vulnerable to climate change.</p><p>"It really will come down to: How much are you willing to pay? Or I guess, maybe given inequality within our country: How much are you able to pay for your favorite food?" Carr said.</p><div type="image" title="hands stir a bowl of liquid chocolate" height="1534" width="2046" msid="93282591" hostid="261"></div><p>Coffee-growing areas in Central and South America, Vietnam, and Indonesia are likely to see average temperature increases that make the crop harder to grow. A January <a href="https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0261976">study</a> in the journal PLOS One projected a "drastic," about 50%, decrease in areas suitable for coffee cultivation by 2050. Already, between 2020 and 2021, extreme weather in Brazil drove the cost of coffee up 70%, <a href="https://www.nytimes.com/2022/02/03/business/economy/food-prices-inflation-world.html">The New York Times</a> reported, citing data from the International Monetary Fund.</p><div type="image" title="two coffee berries on a leaf one fat and orange the other small and green" height="1555" width="2074" msid="93282593" hostid="261"></div><p>Coffee may become "more of a specialty drink, or a treat that you have occasionally," Bezner Kerr said.</p><p>Chocolate could undergo a similar decline. Most of the world's cocoa — 70% of it — grows in Ivory Coast and Ghana, the <a href="https://www.weforum.org/agenda/2020/11/cocoa-chocolate-supply-chain-business-bar-africa-exports/">World Economic Forum</a> said, where drier conditions might make cocoa farms <a href="https://www.climate.gov/news-features/climate-and/climate-chocolate">unsuitable</a> for the plants.</p><p>Climate disruptions are leading to shortages worldwide. Wildfires and droughts are besieging wine-grape vineyards in California and the Mediterranean. Severe drought in Mexico is cutting chili-pepper yields and driving a <a href="https://mexiconewsdaily.com/news/mexico-drought-sriracha-short-supply/">Sriracha shortage</a>. Apples <a href="https://www.scientificamerican.com/article/how-climate-change-hurt-this-years-apple-harvest/">suffered</a> from last year's extreme heat and late-spring frosts in the US. In France and Canada, <a href="https://www.businessinsider.com/mustard-shortage-climate-change-supply-chain-2022-6">mustard-seed</a> growers <a href="https://www.theguardian.com/business/2022/may/19/french-dijon-mustard-supply-hit-by-climate-and-rising-costs-say-producers">reported</a> a changing climate had cut production in half in 2021.</p><h2>The climate crisis isn't new. How did things get so bad this year?</h2><div type="image" title="man in military uniform stands in charred wheat field with fire in the distance" height="1527" width="2037" msid="93282594" hostid="261"></div><p>Damages from climate change and disruptive events, such as the war in Ukraine and the coronavirus pandemic, compound one another. The war, for example, is exacerbating a preexisting fertilizer shortage and cutting off a crucial global supply of wheat.</p><p>Even places that don't rely on Ukraine's wheat or fertilizer suffered from the rise in global food prices. For instance, in Malawi farmers were already <a href="https://reliefweb.int/report/malawi/wfp-malawi-post-floods-assessment-june-2022">reeling</a> from a late start to the rainy season, which brought extreme flooding. The country turned to imports to replace its lost crops, but now global price hikes could make imported food too expensive for many Malawians, leading to food shortages.</p><div type="image" title="children crouch in foodwaters holding up small fish they caught near overturned truck" height="1421" width="2500" msid="93282595" hostid="261"></div><p>"Climate by itself, right now, generally doesn't lead to terrible" food-access outcomes, Carr said, adding, "But it's intersecting with a lot of other stressors that are out there." </p><p>The coronavirus pandemic dealt a major blow to supply chains and is still driving labor shortages. That weakened the food-supply chain from farm to plate and drove costs higher.</p><p>"You get these worsening impacts from the interaction between a non-climatic factor, such as a conflict, and a climatic factor, such as drought, in a particular region, leading to really severe food crises," Bezner Kerr said.</p><h2>Can we fix this?</h2><div type="image" title="protesters wearing orange vests and face masks sit on a road surrounded by scattered food bread products and produce" height="1533" width="2044" msid="93282597" hostid="261"></div><p>We can't stop the globe from warming in the years ahead since the greenhouse gases we've already added to the atmosphere will continue to trap heat. But we can reduce the greenhouse gases we're emitting and adapt our food systems to the changes that are already happening.</p><p>Those adaptations look different depending on the region and the climate problems it faces. Some farms have already seen success with new water-management tactics, the diversification of crops, and the integration of crops with livestock and forests to improve soil quality. Research institutions are also developing more drought-resistant varieties of staple crops, such as <a href="https://www.ers.usda.gov/amber-waves/2019/march/drought-tolerant-corn-in-the-united-states-research-commercialization-and-related-crop-production-practices/">corn</a>.</p><div type="image" title="woman walks cow on a lead in front of a large solar array" height="1534" width="2045" msid="93282598" hostid="261"></div><p>Researchers need to study those solutions more to know if they'll work at scale.</p><p>To stop the crisis from accelerating even more, we must stop adding carbon to the atmosphere and transition away from fossil fuels to more renewable energy sources, such as solar and wind power.</p><p>We need to make those changes now, or "the future looks grim," Bezner Kerr said. "I think it's an opportunity, a hopeful opportunity, and it's a closing window."</p>

Climate change is disrupting our food system, which makes it vulnerable to new crises

<p><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></p><ul class="summary-list"><li>March 22 marks <a href="https://www.businessinsider.com/category/world-water-day">World Water Day,</a> a United Nations campaign to raise awareness of the global water crisis.</li><li>One in four people will face a recurring water shortage by 2050, according to UN estimates.</li><li>To tackle this crisis, an Israeli company called Watergen has developed a machine that pulls clean water out of thin air. </li><li>The machine comes in various sizes, including a large version for factories and villages and a small version for offices and homes. </li></ul><p>World Water Day aims to raise awareness of the global water crisis, which could leave one in four people with a <a href="https://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-6-clean-water-and-sanitation.html">recurring water shortage</a> by 2050. As the global population <a href="http://www.un.org/en/development/desa/news/population/2015-report.html">continues to climb</a>, that means more than 2 billion people could soon be starved for world's most precious resource.</p><p>To tackle this mounting issue, one company has turned to a solution in nature.</p><p>Since 2009, the Israeli company <a href="http://www.watergen.com/">Watergen</a><span> has been developing and implementing a technology that extracts clean water from thin air. It all comes down to perfecting a basic <keyword id="41551" type="ENTERTAINMENT" weightage="100" keywordseo="science">science</keyword>. </span></p><p><em><strong>Read more:</strong> <a href="https://www.businessinsider.com/african-cities-water-crisis-2019-3">African cities are running out of water, and the continent needs $66 billion to avoid a crisis of disease and dehydration</a></em></p><p><span>Our atmosphere is full of water vapor, which turns into condensation in cooler temperatures. We often see this effect in the summer, when </span><span>water droplets collect on the outside of an ice-cold glass.</span></p><p><span>Watergen's machine generators harness this same technology by pulling air from the atmosphere, condensing it into water, filtering it for impurities like metal or bacteria, and adding minerals so that it's drinkable.</span></p><p><span><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></span></p><p><span>The process is similar to that of an air conditioner, only Watergen's machines can produce </span><span style="font-weight: 400;">5 to 6 times more water. The technology has also been <a href="https://www.prnewswire.com/news-releases/watergen-announces-new-automotive-division-that-will-change-the-transportation-industry-forever-300772222.html">tested and approved</a> by the EPA.</span></p><p><span>Watergen's machines come in different sizes, all with different capacities. The largest model provides up to 5,000 liters of water (the equivalent of 18,000 water bottles) per day to places like factories and villages. There's also a medium-sized version for schools, hospitals, and buildings.</span></p><p><span>The company's newest model, a home or office generator called "Genny," produces around 27 liters a day, or the equivalent of 54 water bottles. The model will soon be sold through distributors, who determine the price, but the estimated cost is</span><span> around $1,500 per unit.  </span></p><p><span>Watergen's larger machines have already been introduced to communities around the world, including some in </span><span style="font-weight: 400;">China, India, Vietnam, Mexico, and Brazil. </span></p><h2>Watergen's machines can help during a crisis</h2><p>When a <a href="https://www.businessinsider.com/california-camp-fire-death-toll-most-destructive-in-history-2018-11">devastating string of wildfires</a> swept California in November, the company used its generator to provide fresh water to local <span>police and firefighters on the ground. Last August, it also distributed water to Kerala, India, after the state endured <a href="https://indianexpress.com/article/india/483-dead-in-kerala-floods-and-landslides-losses-more-than-annual-plan-outlay-pinarayi-vijayan-5332306/">massive floods and landslides</a> that killed nearly 500 people. </span></p><p><span><div class="KonaFilter image-container display-table"><div><div class="image"></div></div></div></span></p><p><span>But Watergen's primary purpose isn't to serve disaster zones. It's to address the global water shortage. </span></p><p><span>"</span><span style="font-weight: 400;">We think this is the solution for the world in the long-run," sai</span>d Maxim Pasik, the company's executive chairman. "<span style="font-weight: 400;">It's taking out all the plastic bottles, all the logistics of bringing water from trucks."</span></p><p>In Cape Town, South Africa, <span>government trucks distribute gallons of water to local households. Residents also <a href="https://www.citylab.com/environment/2018/07/how-cape-town-got-to-the-brink-of-water-catastrophe/564800/">line up for hours</a> to fill their plastic jugs with water from local springs, which for some necessitates a <a href="https://www.denverpost.com/2018/02/23/as-cape-towns-water-runs-out-the-rich-drill-wells-the-poor-worry-about-eating/">trek of multiple miles</a>. Many residents have taken to <a href="https://www.businessinsider.com/african-cities-water-crisis-2019-3">hoarding water in their homes</a>, which can create a breeding ground for disease-carrying mosquitoes.</span></p><p><span>Last year, Cape Town began counting down to "<a href="https://www.businessinsider.com/cape-town-day-zero-photos-inequality-2018-2">Day Zero</a>," when it was estimated to run completely out of water. The city seems to have thwarted the crisis for now, but it still faces the looming threat of <a href="https://qz.com/africa/1525526/cape-towns-day-zero-water-shortage-fear-spreads-in-south-africa/">another drought</a>. </span></p><p><span>Many African cities are undergoing similarly dire circumstances, but <span style="font-weight: 400;">Watergen doesn't yet have the capacity to serve every community in need. As it attempts to scale its production, the company is also working to make sure residents are aware of its technology. </span></span></p><p><span style="font-weight: 400;">"We need to educate people," said Pasik. "They need to understand that this source of water is trustworthy."</span></p><h2><strong>There are still major obstacles to addressing the water shortage</strong></h2><p><span style="font-weight: 400;">Pasik said <span>Watergen</span> doesn't have any immediate competitors, but it's not the only company converting air into water. The <span>startup </span><a href="https://www.zeromasswater.com/contact-us/?utm_source=google&amp;utm_medium=cpc&amp;utm_campaign=&amp;utm_content=&amp;utm_term=zero%20mass%20water&amp;hsa_tgt=kwd-384047351745&amp;hsa_grp=50186269833&amp;hsa_src=g&amp;hsa_net=adwords&amp;hsa_mt=e&amp;hsa_ver=3&amp;hsa_ad=258434142190&amp;hsa_acc=2226991964&amp;hsa_kw=zero%20mass%20water&amp;hsa_cam=981289406&amp;gclid=EAIaIQobChMI6s7ko8DZ3QIVjJ6zCh00sAurEAAYASAAEgLT6PD_BwE">Zero Mass Water</a> has adopted a similar <a href="https://www.businessinsider.com/zero-mass-water-solar-panels-solution-water-crisis-2019-1">water-harvesting process</a> using <span>solar panels. </span></span></p><p><span style="font-weight: 400;"><span>The company's panels are around the same price as "Genny" - $2,000 (plus around $500 for installation) - but they save on the cost of electricity. The main drawback is that they </span></span><span style="font-weight: 400;"><span>can only deliver about 2 to 5 liters of water a day. </span></span></p><p><span style="font-weight: 400;"><span>In both cases, weather and climate <a href="https://www.cnn.com/2019/01/31/tech/water-from-air-startups/index.html">pose certain limitations</a>. Zero Mass Water's panels work best in sunny areas and won't function in freezing temperatures, while Watergen tends to perform best in hot, humid climates. </span></span></p><p><span style="font-weight: 400;"><span>One added benefit of Watergen's machines is that they're designed to release clean air back into a home or office. But when</span></span><span style="font-weight: 400;"> it comes to providing reliable fresh water to billions of people by 2050, the company has a long way to go.</span></p>

These machines pull clean drinking water out of thin air, and they might be a solution to the global water crisis

<p><div class="KonaFilter image-container display-table"><div><div class="image"><p class="source"><span>REUTERS/Amit Dave</span></p></div><p></p></div></div>India's elections are in the final stages and votes will be counted on May 16. With 814 million Indians eligible to vote, this has been the biggest election in history - understandably, the world has been watching to see how this plays out</p>
<p><a href="http://www.businessinsider.com/who-is-narendra-modi-2014-4#!JziwF">Opposition leader Narendra Modi</a> is widely expected to be India's next prime minister and the ruling Congress party is expected to lose. Modi is currently the Chief Minister of Gujarat, a region known for economic progress but <a href="http://en.wikipedia.org/wiki/2002_Gujarat_violence">also violent riots</a>.</p>
<p>While he has managed to position himself as a champion of economic growth, his plans remain largely unclear.</p>
<p>"He's selling a dream," said Ruchir Sharma, head of emerging markets and global macro at Morgan Stanley Investment Management. "We don't have specifics as yet."</p>
<p>We spoke with Sharma, author of "<a href="http://www.amazon.com/Breakout-Nations-Pursuit-Economic-Miracles/dp/0393345408">Breakout Nations</a>," on the Indian elections.<strong><br /></strong></p>
<p>Here are some highlights from the interview:</p>
<ul>
<li>Sharma thinks the elections have had an 'anybody but Congress' theme to it. Modi has planned his campaign like a U.S. presidential election. </li>
<li>Modi could win the election comfortably even if two-thirds of the country didn't vote for him because India has a very fragmented polity.</li>
<li>Gujarat has had two advantages, an entrepreneurial population and its coastline, but its performance has improved a bit under Modi. Modi has positioned himself "as a connoisseur of all of India's problems."</li>
<li><keyword id="6358883" type="PERSON" weightage="60" keywordseo="Politics">Politics</keyword> have helped drive Indian equities in the past five to six months. But the bigger picture is that the Indian market is the most highly correlated to other emerging markets.</li>
<li>India's investment cycle has many problems that Modi might not be able to solve.</li>
<li>India has largely fallen off the map but we're still in a low growth world. If India could revive growth again it could offer an interesting opportunity for investors.</li>
<li>The emerging world is seeing a large anti-incumbency wave.</li>
</ul>
<p>Here's the entire interview:</p>
<p><strong>Business Insider: What would a Modi term mean for India?</strong></p>
<p><strong>Ruchir Sharma:</strong> I've been traveling in India, although I'm based in New York, what really strikes me here is the fact that this campaign started out, as what I described, as an 'anybody but Congress' campaign. It was quite apparent over the last 24 to 36 months that people were quite disgusted with the ruling Congress government because they thought it was inept on every front, whether it was inflation, corruption, or getting anything executed. It was seen as incompetent.</p>
<p>Modi has very smartly - this is the first time that I've seen this in India - been planning this like a U.S. presidential election. That is to say that ever since the BJP lost the election in 2009, five years ago, he has been sensing that the next election he really wants to take a shot at it. He has been behind the scenes working at it, in his own state of Gujarat. He's offered a complete contrast in terms of economic performance and governance, and the way the government runs there. He has systematically been planning this for five years in a U.S. presidential election style way.</p>
<p>As I've been traveling what's been very apparent is that, I was in the interiors of Uttar Pradesh, one of India's poorest states and what I find remarkable is that in the villages, people would speak about how they think their problems could be fixed by Modi. From the depths of despair they've come to see Modi as the man who will come and change things. I don't know whether this feeling is irrational, because none of the people have ever been to Gujarat or possibly been outside their state and yet this feeling exists that he's going to come and change things. The whole Muslim issue is controversial, and it is baggage for Modi, and people understand that but think what the hell, things look so bad let's give this guy a shot. <br /><br /><strong><div class="KonaFilter image-container float_left click-to-enlarge"><div class="image on-image"><a title_source="Kevin Frayer/Getty Images)" title_caption="" class="zoomin" href="https://static-ssl.businessinsider.com/image/536913dcecad040702c385bb-960/narendra-modi-4.jpg"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>Kevin Frayer/Getty Images)</span></p></div><p></p></div>BI: Do you give credence to the talk of the emergence of a messy coalition, or what some folks are calling the third front, with the rise of regional parties?</strong></p>
<p><strong>RS:</strong> The current trend in India, and as you rightly pointed out the polls can be quite unreliable, really seems to suggest that Modi has made it all about himself, that he's succeeded in doing so, and that he's not going to need much outside help. That seems the way this election is headed currently, unless something dramatic happens this week or unless there's a voice out there that we're not picking up.</p>
<p>The rise of the regional parties has been one of my favorite themes as well. I think that's a train that's continuing, but this is about the decimation of the Congress party. The Congress party in this election is likely to fall to its lowest tally ever in post-independence India. Its vote share has plummeted, so this is as much about Congress being completely decimated. And the regional parties are still doing what they have to do.</p>
<p>One of the most fascinating statistics I find, which people can't quite appreciate, is that even if Modi wins this election quite comfortably, two-thirds of India would not have voted for him in this election. India remains a multiparty system, its polity is very fragmented. The regional parties are here to stay and possibly rise but Modi's real big gain is coming at the cost of the Congress party.</p>
<p>The reason behind that statement is that the polity in India is very fragmented with strong regional identities...there are many states where the national parties such as the BJP only have a marginal presence and the regional or state level parties call the shots...that's why even in what is being described as a 'wave election' for Modi, his party is unlikely to win more than a third of the vote with the regional parties still cornering significant vote shares in states where the BJP and the Congress only have a marginal presence. <br /><br /><strong>BI:</strong> <strong>There are loads of publications that have pointed out that Gujarat was doing quite well before Modi came to power too. It isn't necessarily that's kept economic growth going in that state…</strong><br /><br /><strong>RS:</strong> That's true. Gujarat has two advantages, one: the population is quite entrepreneurial and industrial and so Gujarat has been doing well for a longer period of time. And two: the geographical sweet spot - that it's basically located on the Western coast, and has good coastline, and that helps Gujarat a lot.</p>
<p>Having said that, a look at the history of economic performance of Indian states, and what it shows typically is that many of the other states that were doing well in the previous decade, often tend to fade in the subsequent decade, so often we've seen examples of states, like some of the southern states, like Karnataka or Andhra Pradesh, they'll do well for five or 10 years, and then they won't do that well. In Gujarat, what's been remarkable is that it's continued to do well for long periods of time, under Modi, in fact the performance has improved a bit at the state level.</p>
<p>But I really feel that this debate about what Gujarat has done, and how things have stayed in Gujarat has almost become a bit irrelevant because the perception which has spread like wildfire, is the fact that India needs a tough, decisive leader, at a time when it's going through a lot of economic turmoil - where inflation is really high, growth is really low - that we need a really decisive leader to come cut through this mess. Modi has been able to effectively position himself as just the answer to India's problem. We can spend a lot of time parsing through the data, and that's true of most debates, but the key here is that - and I can't understand whether it's rational or irrational - he has been able to position himself as a connoisseur of all of India's problems, including inflation which has been so high for five years now. </p>
<p><strong><div class="KonaFilter image-container float_left click-to-enlarge"><div class="image on-image"><a title_source="REUTERS/Anindito Mukherjee" title_caption="Polling officials leave for their assigned stations after collecting the electronic voting machines from a distribution centre. " class="zoomin" href="https://static-ssl.businessinsider.com/image/536908c4ecad044552c385b7-960/india-elections-4.jpg"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>REUTERS/Anindito Mukherjee</span></p><p class="caption">Polling officials leave for their assigned stations after collecting the electronic voting machines from a distribution centre. </p></div><p></p></div>BI: What are the big reforms we should expect from Modi and what reforms does India need? </strong></p>
<p><strong>RS:</strong> Here's the thing about Modi, he's selling a dream. We don't have specifics as yet. Indian campaigns are very different from U.S. campaigns where polices are debated a lot. In India the debate on policies, or even what they say in the manifesto, just doesn't mean much because those things aren't followed through. Or, the manifesto could be drafted by somebody who is not even supposed to that relevant in the next administration. It's very difficult for me to know what they're going to do. This election is about selling an economic dream, it's not about what the specifics are.</p>
<p>What he will come [to power] and do, I don't know. What should he do? I think we all know - India needs better labor laws, the labor laws are much too rigid; Indian fiscal spending is out of control, spending needs to be put under check; you can't have wage inflation which is running way higher than productivity levels; we can't have subsidies for so many essential items in India; and similarly we can't have retroactive taxes; we can't have regulation which is unclear for so many critical sectors in India from power to coal. So the list of what needs to be done is long, and expectations are high, but specifics of what have been offered in the campaign so far, as is true of most Indian election campaigns, has been low. <br /><br /><strong>BI: After a pretty terrible run, Indian equities have been doing well recently. Are they just riding on the sentiment of Modi? </strong></p>
<p><strong>RS:</strong> I've seen in emerging markets over the past five to six months, all the emerging markets where you're expecting political change, markets have rallied quite a bit. We're seeing that in Indonesia, in India, and we're seeing that now in Brazil. Every time the polls show a drop for the incumbent there, the markets tend to rally.</p>
<p>There's a real feeling among investors in all these emerging markets, that economic change is required and reforms are required, because the old model is not delivering results anymore. Whether the incumbents are tired and out of energy or they got too complacent. So yes, politics has been playing a role in influencing the Indian market direction over the last five to six months.</p>
<p>Having said that I think the bigger picture is that the Indian market is one of the most highly correlated emerging markets in the world. In fact it's possibly the highest over a five, 10, 15 year period - there's no other emerging market that has a correlation as high, to other emerging markets, as India has. That still remains the dominant story but yeah, from a short-term stand point, it has been very driven by politics.</p>
<p><strong>BI: Some have argued that it doesn't matter who comes to power, India's investment cycle is going to languish for a while. Do you agree with that? </strong></p>
<p><strong>RS:</strong> I do sort of agree with the statement in that India's investment cycle has many problems which Modi may not be able to solve. For example a lot of stalled projects are at the state level, and not at the center. But having said that, I think the issue is that if he does carry out some of the critical reforms that we've spoken about - labor market reform, reducing government spending which allows interest rates to start coming down - I think those kinds of things will help investment.</p>
<p>That's economics 101, if you do manage to get lower interest rates because inflation is brought under control, you do manage to get some sort of labor market reforms that will help the investment cycle. </p>
<p><strong><div class="KonaFilter image-container float_left click-to-enlarge"><div class="image on-image"><a title_source="AP Photo /Manish Swarup" title_caption="An Indian woman shows her finger marked with indelible ink after casting her vote at a village near Sawai Madhopur in Rajasthan." class="zoomin" href="https://static-ssl.businessinsider.com/image/5369091d6da811231a673a78-960/indian-voter-blue.jpg"><span class="sprites click-to-enlarge-icon" title="Click to enlarge"></span></a><p class="source"><span>AP Photo /Manish Swarup</span></p><p class="caption">An Indian woman shows her finger marked with indelible ink after casting her vote at a village near Sawai Madhopur in Rajasthan.</p></div><p></p></div>BI:</strong> <strong>Why should the rest of the world be watching the Indian elections? What are the implications for U.S. investors for instance?</strong></p>
<p><strong>RS:</strong> For U.S. investors, the key thing is that India has fallen off the map. After all the talk about China and India in the same breath, interest in India in general has faded a lot. Having said that, it is still a low-growth world, there are few growth opportunities out there. So if India  manages to get its growth rate up to 6 to 7% or so, it becomes a meaningful thing because it's a $2 trillion economy, and if it starts growing again at 7%, rather than the 4.5% we're currently down to, it becomes an interesting opportunity for lots of people because it means the pie is growing faster. Without getting something to shake the system up it will be difficult to get growth again.</p>
<p>India, on the international stage, is a power that keeps punching below its weight. I don't think geopolitics is a factor at all. It's almost as if the world has told India go sort out your own problems in terms of the political and economic mess that we have. And in terms of geopolitics we're just not featuring much anymore. The focus in Asia, the pivot as you know, is basically about the rise of China and how that disturbs the relationship of other countries in the region. India is really out of that equation. Geopolitics isn't where India is featuring at the moment, it's really abut China and that west. </p>
<p><strong>BI:</strong> <strong>Is there anything else you'd like to add that I haven't asked you about?</strong></p>
<p><strong>RS:</strong> This is a big year for political change across the emerging world. Forty percent of all democracies in the emerging world are going to the polls this year. And there's a big anti-incumbency wave which is sweeping through the emerging world, where people want political change because they're fed up with the poor economic performance of the last two or three years. </p>
<p>Even in India this was very different from five years ago when investors were rooting for the Congress party to come back to power. And on the first day when the party returned to power, on the first day the stock market had to be shutdown because it lost 15% in a day or something which is the maximum upper limit. That should also remind investors that initial reaction can be quite impulsive and you've got to look at things over a period of time and how things play themselves out. The initial reaction can be quite impulsive, up or down, when you get the results, but it's worth remembering back in 2009, how quickly expectations were disappointed after that initial burst of enthusiasm.</p>

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