How is Alaska? - Hot!

As some of my readers know, I recently visited my sister-in-law who lives in rural Alaska. I call it the end of the world, because the village she lives in can only be reached by plane or boat and I think it is a freaky place. Lots of super nice people and the best fish in the world, though, but I digress… 

One thing I noticed this time around is that when my wife and me visited, it was warmer in Alaska than in London. And according to the weather data of NOAA this was no outlier. The average temperature in June in the state of Alaska has reached the highest level since measurements began in 1925. In Anchorage, temperatures rose above 90°F (32.2°C) for the first time ever. The unusual heat has triggered wildfires the size of Rhode Island!

Of course, weather isn’t climate but let’s put the current hot weather in Alaska into perspective. Alaska has seen the warmest twelve-month period over the last twelve months. And the warmest two-, four- and five-year periods in Alaska were the ones ending in June of this year. In other words, Alaska is getting as hot as a server in a Hooters restaurant. Is this evidence of climate change? Not necessarily, but without climate change such an extended spell of hot weather would have been much less likely to happen. 

And the economic effects on Alaska are manifold. Most obviously, many communities in Northern Alaska rely on ice cover for their livelihood. Ice roads bring supply to these communities. As any casual viewer of the TV show Ice Road Truckers will know, these supplies are not only vital for local communities, but also for the mining and drilling businesses that operate in the far north of Alaska and Canada. As ice roads melt, operations will have to seize or become much more difficult and costlier, with negative effects for the businesses that run these operations. So, if you think, this does not impact you as an investor, you better think again.

Of course, some people may say that warmer temperatures also have positive side effects. US Secretary of State Mike Pompeo was the first person in the current US government to acknowledge climate change, when he said that melting arctic ice presents “new opportunities for trade”. Yes, they do. But guess what, it also provides new opportunities for Russian warships to come close to the US coastline.

Some say, there is an upside to everything…

Average temperature in June in Alaska

Source: NOAA