[Bloomberg Column] Wimbledon's Sunny Weather Is a Warning

Europe's Abandonment of Nuclear Power: A Strategic Failure
Anachronistic Tax Cuts for Oil Companies

The abbreviation that caught my attention this week was 'SSMIS.' Though it sounds like the name of a snake that swallowed a frog, it actually stands for the Special Sensor Microwave Imager Sounder, an American microwave satellite sensor. According to Joy Schlangen of The Atlantic, this device is a powerful remote monitoring tool that allows forecasters to peer into the skies they cannot see, capturing images as if seeing through clouds.

But now, this 'eye' is about to go blind. The U.S. Department of Defense has announced that it will stop processing and distributing key images generated by this sensor starting at the end of this month. Losing this data could seriously undermine the National Hurricane Center's ability to detect the early formation of hurricanes. The details of the policy are as murky as a foggy street in London, but one thing is clear: my plans to go scuba diving in the Caribbean during hurricane season have become even more uncertain than usual.

Perhaps I should head to Wimbledon instead. The United Kingdom has just experienced its warmest and sunniest spring since weather records began in 1884. Lara Williams points out, "Some industries have benefited from the clear weather, but we must not forget the challenges that such record-breaking climate poses for us." As climate change intensifies the swings between rain and drought, various industries are struggling to adapt. Even the retail sector, which has benefited, is grappling with how to respond to the 'weather rollercoaster' driven by climate change.

Unfortunately, the European continent has made the wrong choices in the face of these signals. The editorial team notes, "Just a few decades ago, Europe was the world's leading region for nuclear power, relying on nuclear plants for more than 30% of its electricity and accounting for over 40% of global nuclear power generation. But after the Chernobyl disaster in 1986 and the Fukushima incident in 2011, fear of nuclear energy spread and policy direction shifted dramatically."

This change in direction has remained a painful mistake in European energy policy. Europe has effectively relinquished the stable, affordable, and low-carbon power generation capacity it now desperately needs. Germany, in particular, is paying the price. Its reliance on coal and imported natural gas has increased in place of nuclear power, leaving it heavily influenced by Russia's energy policies and gas prices.

The United States is not much different. Mark Gongloff, a Bloomberg Opinion columnist on climate change and the economy, observes, "If you had the power to prevent two Great Depressions, most people would obviously use that power. Yet now, we are simply ignoring the increasingly hot and intense climate change. In other words, we are letting a decisive opportunity to prevent catastrophe slip away."

It is estimated that over the past 12 years, the United States has suffered at least $6.6 trillion in economic losses from climate disasters, including insurance premium hikes, recovery costs, and other expenditures. This is double the estimated economic damage from the Great Depression of the 1930s, adjusted to today's value (about $3.3 trillion).

Ultimately, attention turns again to the Republican Party. Their strategy of ballooning national debt, pushing for tax cuts, and undermining Medicaid?dressed up as imaginary number games?comes into focus. Liam Denning, a Bloomberg Opinion columnist, describes the Republican approach to climate policy as less fantasy and more 'steampunk.' He explains, "Steampunk is a science fiction genre that imagines a world where 19th-century technology dominates the future of the 21st century, with iconic images like Jules Verne's world, airships, and Babbage calculators." The analogy is apt: Republicans are under the illusion that the core industries of the 21st century, such as artificial intelligence and advanced technology, can be propped up by 19th-century energy resources like coal and oil.

This vague nostalgia for the past explains why Republicans are again pushing for tax breaks for a group that hardly seems desperate: the major oil companies. Mark Gongloff notes, "In 2024 alone, the world's five largest oil companies raked in $102 billion in net profit and returned $349 billion to shareholders through dividends and share buybacks. Just looking at this level of compensation, it's clear that shareholders are not exactly clamoring for 'Drill, baby, drill!' Moreover, demand forecasts are growing increasingly uncertain. This industry is already mature, and the current benefits are more than generous?there is no reason to shower it with new privileges."

As Javier Blas, a Bloomberg Opinion columnist, points out, the world is currently awash in oil. Tracing this trend back leads inevitably to Iran. Blas writes that while debate continues over how much damage U.S. and Israeli airstrikes have done to Iran's nuclear program, one thing is clear: the energy sector, the regime's 'cash cow,' has survived remarkably unscathed. "Numbers don't lie. In 2024, Iran's oil production reached its highest level in 46 years. Every time a U.S. official talks about 'oil sanctions' on Iran, I can't help but wonder: 'Sanctions? What sanctions are you talking about?'" he wrote.

Of course, Iran is not the only one responsible for today's overflowing oil pool. Bloomberg columnist Mark Gilbert and Bloomberg Opinion Chief Market Strategist Marcus Ashworth note, "Global oil demand is rising only modestly, but the amount of black liquid flooding the market keeps growing."

Saudi Arabia, dissatisfied with OPEC+ allies exceeding production quotas, is expected to raise its own output to around 10 million barrels per day, the highest in two years. Even armed clashes between Israel and Iran only briefly pushed up Brent crude prices, which soon fell below $70 per barrel.

On top of this, OPEC+ has agreed to raise production quotas, and U.S. shale companies have locked in supplies by taking advantage of high prices. At this point, the direction of oil prices is clear: down. And just as clearly, the direction of global average temperatures is up.

Tobin Harshaw, Bloomberg Opinion Chief Editor and former Deputy Op-Ed Editor at The New York Times

This article is a translation by Asia Economy of the Bloomberg column Wimbledon's Sunny Weather Is a Warning.