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Volcanic eruption slows global warming?
Tonga’s volcanic explosion last week could have major implications for global energy and agriculture markets.
The fringes of the Twitter sphere are discussing the potential impact from the volcano that erupted in Tonga this week and the possible impact on global warming trends that could be stymied by the size of the SO2 plume emissions released from the event. If large enough to cool the planet (as prior massive volcanic releases have done), this could have massively bullish implications for global energy markets (because less solar power available as base load source) and agriculture markets (by negatively impacting yields). More demand for traditional energy sources like oil, natural gas and coal to replace supply coming from solar would further tighten an already tight energy market and would exacerbate inflationary trends already in place (bullish for price of carbon credits as well). Less agricultural supplies stemming from a one time planet cooling event could tighten food markets too. I suspect the Fed didn’t have “volcanic eruption shocks energy and agriculture markets” on their bingo board of inflation risks for 2022.
It’s still too early to tell on impact here but since it’s being discussed, I wanted to make sure it was being flagged here.
From the NYT:
Eruptions with a V.E.I. (Volcanic explosivity index) of 6 or higher send so much gas and particles so high into the atmosphere that they can have a cooling effect on the climate for several years, by reflecting more sunlight away from the Earth’s surface. But eruptions of that magnitude occur very rarely. The latest was Mount Pinatubo in the Philippines in 1991.