PEVEK, Russia — A refurbished port. A spanking new plant to generate electricity. Repaved roads. And money left over to repair the library and put in a new esplanade along the shore of the Arctic Ocean.
Globally, the warming climate is a creeping disaster, threatening lives and livelihoods with floods, fires and droughts, and requiring tremendous effort and expenditure to combat.
But in Pevek, a small port town on the Arctic Ocean in Russia’s Far North capitalizing on a boom in Arctic shipping, the warming climate is seen as a barely mitigated bonanza.
“I would call it a rebirth,” said Valentina Khristoforova, a curator at a local history museum. “We are in a new era.”
Arable land is expanding, with farmers planting corn in parts of Siberia where it never grew before. Winter heating bills are declining, and Russian fishermen have found a modest pollock catch in thawed areas of the Arctic Ocean near Alaska.
Nowhere do the prospects seem brighter than in Russia’s Far North, where rapidly rising temperatures have opened up a panoply of new possibilities, like mining and energy projects. Perhaps the most profound of these is the prospect, as early as next year, of year-round Arctic shipping with specially designed “ice class” container vessels, offering an alternative to the Suez Canal.
The Kremlin’s policy toward climate change is contradictory. It is not a significant issue in domestic politics. But ever mindful of Russia’s global image, President Vladimir V. Putin recently vowed for the first time that Russia, the world’s fourth-largest emitter of greenhouse gases and a prodigious producer of fossil fuels, would become carbon neutral by 2060.
vulnerable to wildfires, reinforce dams against river flooding, rebuild housing collapsing into melting permafrost, and brace for possible lower world demand for oil and natural gas.
Rosatom, the Russian state nuclear company that is coordinating investment in the shipping lane, said the initiative benefits from climate change but will also help fight it by reducing emissions from ships sailing between Europe and Asia by 23 percent, compared with the much longer Suez route.
The trip from Busan, in South Korea, to Amsterdam, for example, is 13 days shorter over the Northern Sea Route — a significant savings in time and fuel.
told the Russian media.
signed a deal with DP World, the Dubai-based ports and logistics company, to develop ports and a fleet of ice-class container ships with specially reinforced hulls to navigate icy seas.
The thawing ocean has also made oil, natural gas and mining ventures more profitable, reducing the costs of shipping supplies in and products out. A multi-billion-dollar joint venture of the Russian company Novatek, Total of France, CNPC of China and other investors now exports about 5 percent of all liquefied natural gas traded globally over the thawing Arctic Ocean.
Overall, analysts say, at least half a dozen large Russian companies in energy, shipping and mining will benefit from global warming.
One benefit the people of Pevek haven’t felt is any sense that the climate is actually warming. To them, the weather seems as cold and miserable as ever, despite an average temperature 2.1 degrees Fahrenheit warmer than 20 years ago.
Global warming has been “a plus from an economic point of view,” said Olga Platonova, a librarian. Still, she and other residents say that in light of the costly and dangerous changes worldwide, they have no reason to celebrate.
And even here the environmental impacts are uncertain many say, citing the (to them) alarming appearance in recent years of a flock of noisy crows never seen before.
And Ms. Platonova had one other regret: “It’s a shame our grandchildren and great-grandchildren won’t see the frozen north as we experienced it.”
Wall Street likes what it’s hearing from Washington lately.
The S&P 500 inched to a new high on Thursday, continuing a rally aided by signs of progress in spending talks that could pave the way for an injection of some $3 trillion into the U.S. economy.
The index rose 0.3 percent to 4,549.78, its seventh straight day of gains and a fresh peak after more than a month of volatile trading driven by nervousness over the still-wobbly economic recovery and policy fights in Washington.
market swoon that began in September.
Share prices began to rise this month when congressional leaders struck a deal to allow the government to avoid breaching the debt ceiling, ending a standoff that threatened to make it impossible for the country to pay its bills. The rally has gained momentum as investors and analysts grow increasingly confident about a government spending package using a recipe Wall Street can live with: big enough to bolster economic growth, but with smaller corporate tax increases than President Biden’s original $3.5 trillion spending blueprint.
continuing supply chain snarls, higher prices for businesses and consumers and the Federal Reserve’s signals that it would begin dialing back its stimulus efforts all helped sour investor confidence. The S&P 500’s 4.8 percent drop in September was its worst month since the start of the pandemic.
It has made up for it in October, rising 5.6 percent this month. But it’s not just updates out of Washington that have renewed investors’ optimism.
The country has seen a sharp drop in coronavirus infections in recent weeks, raising, once again, the prospect that economic activity can begin to normalize. And the recent round of corporate earnings results that began in earnest this month has started better than many analysts expected. Large Wall Street banks, in particular, reported blockbuster results fueled by juicy fees paid to the banks’ deal makers, thanks to a surge of merger activity.
Elsewhere, shares of energy giants have also buoyed the broad stock market. The price of crude oil recently climbed back above $80 a barrel for the first time in roughly seven years, translating into an instant boost to revenues for energy companies.
debt limit, is a cap on the total amount of money that the federal government is authorized to borrow via U.S. Treasury bills and savings bonds to fulfill its financial obligations. Because the U.S. runs budget deficits, it must borrow huge sums of money to pay its bills.
When will the debt limit be breached? After Senate leaders agreed to a short-term deal to raise the debt ceiling on Oct. 7, the Treasury estimated that the government can continue borrowing through Dec. 3. The deal sets up yet another consequential deadline for the first Friday in December.
Why does the U.S. limit its borrowing? According to the Constitution, Congress must authorize borrowing. The debt limit was instituted in the early 20th century so the Treasury did not need to ask for permission each time it needed to issue bonds to pay bills.
What would happen if the debt limit was hit? Treasury Secretary Janet Yellen told Congress that inaction on raising the debt limit could lead to a self-inflicted economic recession and a financial crisis. She also said that failing to raise the debt ceiling could affect programs that help millions of Americans, including delays to Social Security payments.
Do other countries do it this way? Denmark also has a debt limit, but it is set so high that raising it is generally not an issue. Most other countries do not. In Poland, public debt cannot exceed 60 percent of gross domestic product.
What are the alternatives to the debt ceiling? The lack of a replacement is one of the main reasons the debt ceiling has persisted. Ms. Yellen said that she would support legislation to abolish the debt limit, which she described as “destructive.” It would take an act of Congress to do away with the debt limit.
On Thursday, analysts spotlighted the news that the White House and congressional Democrats were moving toward dropping corporate tax increases they had wanted to include in the bill, as they hoped to forge a deal that could clear the Senate. A spending deal without corporate tax increases would be a potential boon to profits and share prices.
“A stay of execution on higher corporate tax rates would seem a potentially noteworthy development,” Daragh Maher, a currency analyst with HSBC Securities, wrote in a note to clients on Thursday.
An agreement among Democrats on what’s expected to be a roughly $2 trillion spending plan would also open the door to a separate $1 trillion bipartisan infrastructure plan moving through Congress. Progressives in the House are blocking the infrastructure bill until agreement is reached on the larger bill.
But the prospects for an agreement have helped to lift shares of major engineering and construction materials companies. Terex, which makes equipment used for handling construction materials like stone and asphalt, has jumped more than 5 percent this week. The asphalt maker Vulcan Materials has risen more than 4 percent. Dycom, which specializes in construction and engineering of telecommunication networking systems, was up more than 9 percent.
The renewed confidence remains fragile, with good reason. The coronavirus continues to affect business operations around the world, and the Delta variant demonstrated just how disruptive a new iteration of the virus can be.
Another lingering concern involves the higher costs companies face for everything from raw materials to shipping to labor. If they are unable to pass those higher costs on to consumers, it will cut into their profits.
“Thatwould be big,” Mr. McKnight said. “That would be a material impact to the markets.”
But going into the final months of the year — traditionally a good time for stocks — the market also has plenty of reasons to push higher.
The recent weeks of bumpy trading may have chased shareholders with low confidence — sometimes known as “weak hands” on Wall Street — out of the market, offering potential bargains to long-term buyers.
“Interest rates are relatively stable. Earnings are booming. Covid cases, thankfully, are dropping precipitously in the U.S.,” Mr. Zemsky said. “The weak hands have left the markets and there’s plenty of jobs. So why shouldn’t we have new highs?”
Kuwait announced last month that it planned to invest more than $6 billion in exploration over the next five years to increase production to four million barrels a day, from 2.4 million now.
This month, the United Arab Emirates, a major OPEC member that produces four million barrels of oil a day, became the first Persian Gulf state to pledge to a net zero carbon emissions target by 2050. But just last year ADNOC, the U.A.E.’s national oil company, announced it was investing $122 billion in new oil and gas projects.
Iraq, OPEC’s second-largest producer after Saudi Arabia, has invested heavily in recent years to boost oil output, aiming to raise production to eight million barrels a day by 2027, from five million now. The country is suffering from political turmoil, power shortages and inadequate ports, but the government has made several major deals with foreign oil companies to help the state-owned energy company develop new fields and improve production from old ones.
Even in Libya, where warring factions have hamstrung the oil industry for years, production is rising. In recent months, it has been churning out 1.3 million barrels a day, a nine-year high. The government aims to increase that total to 2.5 million within six years.
National oil companies in Brazil, Colombia and Argentina are also working to produce more oil and gas to raise revenue for their governments before demand for oil falls as richer countries cut fossil fuel use.
After years of frustrating disappointments, production in the Vaca Muerta, or Dead Cow, oil and gas field in Argentina has jumped this year. The field had never supplied more than 120,000 barrels of oil in a day but is now expected to end the year at 200,000 a day, according to Rystad Energy, a research and consulting firm. The government, which is considered a climate leader in Latin America, has proposed legislation that would encourage even more production.
“Argentina is concerned about climate change, but they don’t see it primarily as their responsibility,” said Lisa Viscidi, an energy expert at the Inter-American Dialogue, a Washington research organization. Describing the Argentine view, she added, “The rest of the world globally needs to reduce oil production, but that doesn’t mean that we in particular need to change our behavior.”
As the world economy struggles to find its footing, the resurgence of the coronavirus and supply chain chokeholds threaten to hold back the global recovery’s momentum, a closely watched report warned on Tuesday.
The overall growth rate will remain near 6 percent this year, a historically high level after a recession, but the expansion reflects a vast divergence in the fortunes of rich and poor countries, the International Monetary Fund said in its latest World Economic Outlook report.
Worldwide poverty, hunger and unmanageable debt are all on the upswing. Employment has fallen, especially for women, reversing many of the gains they made in recent years.
Uneven access to vaccines and health care is at the heart of the economic disparities. While booster shots are becoming available in some wealthier nations, a staggering 96 percent of people in low-income countries are still unvaccinated.
restrictions and bottlenecks at key ports around the world have caused crippling supply shortages. A lack of workers in many industries is contributing to the clogs. The U.S. Labor Department reported Tuesday that a record 4.3 million workers quit their jobs in August — to take or seek new jobs, or to leave the work force.
Germany, manufacturing output has taken a hit because key commodities are hard to find. And lockdown measures over the summer have dampened growth in Japan.
Fear of rising inflation — even if likely to be temporary — is growing. Prices are climbing for food, medicine and oil as well as for cars and trucks. Inflation worries could also limit governments’ ability to stimulate the economy if a slowdown worsens. As it is, the unusual infusion of public support in the United States and Europe is winding down.
6 percent projected in July. For 2022, the estimate is 4.9 percent.
The key to understanding the global economy is that recoveries in different countries are out of sync, said Gregory Daco, chief U.S. economist at Oxford Economics. “Each and every economy is suffering or benefiting from its own idiosyncratic factors,” he said.
For countries like China, Vietnam and South Korea, whose economies have large manufacturing sectors, “inflation hits them where it hurts the most,” Mr. Daco said, raising costs of raw materials that reverberate through the production process.
The pandemic has underscored how economic success or failure in one country can ripple throughout the world. Floods in Shanxi, China’s mining region, and monsoons in India’s coal-producing states contribute to rising energy prices. A Covid outbreak in Ho Chi Minh City that shuts factories means shop owners in Hoboken won’t have shoes and sweaters to sell.
worldwide surge in energy prices threatens to impose more hardship as it hampers the recovery. This week, oil prices hit a seven-year high in the United States. With winter approaching, Europeans are worried that heating costs will soar when temperatures drop. In other spots, the shortages have cut even deeper, causing blackouts in some places that paralyzed transport, closed factories and threatened food supplies.
China, electricity is being rationed in many provinces and many companies are operating at less than half of their capacity, contributing to an already significant slowdown in growth. India’s coal reserves have dropped to dangerously low levels.
And over the weekend, Lebanon’s six million residents were left without any power for more than 24 hours after fuel shortages shut down the nation’s power plants. The outage is just the latest in a series of disasters there. Its economic and financial crisis has been one of the world’s worst in 150 years.
Oil producers in the Middle East and elsewhere are lately benefiting from the jump in prices. But many nations in the region and North Africa are still trying to resuscitate their pandemic-battered economies. According to newly updated reports from the World Bank, 13 of the 16 countries in that region will have lower standards of living this year than they did before the pandemic, in large part because of “underfinanced, imbalanced and ill-prepared health systems.”
Other countries were so overburdened by debt even before the pandemic that governments were forced to limit spending on health care to repay foreign lenders.
In Latin America and the Caribbean, there are fears of a second lost decade of growth like the one experienced after 2010. In South Africa, over one-third of the population is out of work.
And in East Asia and the Pacific, a World Bank update warned that “Covid-19 threatens to create a combination of slow growth and increasing inequality for the first time this century.” Businesses in Indonesia, Mongolia and the Philippines lost on average 40 percent or more of their typical monthly sales. Thailand and many Pacific island economies are expected to have less output in 2023 than they did before the pandemic.
debt ceiling — can further set back the recovery, the I.M.F. warned.
But the biggest risk is the emergence of a more infectious and deadlier coronavirus variant.
Ms. Gopinath at the I.M.F. urged vaccine manufacturers to support the expansion of vaccine production in developing countries.
Earlier this year, the I.M.F. approved $650 billion worth of emergency currency reserves that have been distributed to countries around the world. In this latest report, it again called on wealthy countries to help ensure that these funds are used to benefit poor countries that have been struggling the most with the fallout of the virus.
“We’re witnessing what I call tragic reversals in development across many dimensions,” said David Malpass, the president of the World Bank. “Progress in reducing extreme poverty has been set back by years — for some, by a decade.”
preliminary official results reported early Monday.
The federal German election agency posted the results at 4:30 a.m. local time.
The close outcome means the Social Democrats, with only 25.7 percent of the vote, must team up with other parties to form a government. And in the complex equation that can be required in Germany to form a government, it is possible that if the winning party fails to get others on board, the party that placed second could wind up leading the country.
It could take weeks if not months of haggling to form a coalition, leaving Europe’s biggest democracy suspended in a kind of limbo at a critical moment when the continent is still struggling to recover from the pandemic and France — Germany’s partner at the core of Europe — faces divisive elections of its own next spring.
Sunday’s election signaled the end of an era for Germany and for Europe. For over a decade, Ms. Merkel was not just chancellor of Germany but effectively the leader of Europe. She steered her country and the continent through successive crises and in the process helped Germany become Europe’s leading power for the first time since World War II.
Cheers erupted at the Social Democratic Party’s headquarters when the exit polls were announced early Sunday evening. A short while later, supporters clapped and chanted “Olaf! Olaf!” as Olaf Scholz, their candidate, took the stage to address the crowd.
“People checked the box for the S.P.D. because they want there to be a change of government in this country and because they want the next chancellor to be called Olaf Scholz,” he said.
The campaign proved to be the most volatile in decades. Armin Laschet, the candidate of Ms. Merkel’s Christian Democrats, was long seen as the front-runner until a series of blunders compounded by his own unpopularity eroded his party’s lead. Olaf Scholz, the Social Democratic candidate, was counted out altogether before his steady persona led his party to a spectacular 10-point comeback. And the Greens, who briefly led the polls early on, fell short of expectations but recorded their best result ever.
The Christian Democrats’ share of the vote collapsed with only 24.1 percent of the vote, heading toward the worst showing in their history. For the first time, three parties will be needed to form a coalition — and both main parties are planning to hold competing talks to do so.
Nevertheless, Mr. Laschet appeared at his party headquarters an hour after the polls closed, declaring the outcome “unclear” and vowing to try to form a government even if his party came in second.
The progressive, environmentalist Greens appeared to make significant gains since the 2017 election but seemed to fall short of having a viable shot at the chancellery. That positions the Greens, as well as the business-friendly Free Democrats, to join the next government. They will play a key role in deciding what the next German government could look like, depending on which of the larger parties they would like to govern with.
On the outer edge of the political spectrum, support for the far-right Alternative for Germany, or AfD, appeared roughly unchanged, while the Left party appeared to be hovering on the 5 percent threshold needed to win seats in Parliament.
In mid-October the election agency will present the official final results.
BERLIN — What do a traffic light, the Jamaican flag and a kiwi have in common?
Those watching German politics closely will know all three are nicknames for potential governing coalitions.
In the weeks following the election, the parties will try to form a coalition government that has a majority in the German Parliament. The winning party in the election will have the first chance to try to form that coalition, but if it doesn’t succeed the chance goes to the runner up.
For the first time since the founding of the federal republic 72 years ago, it looks as though it will take at least three parties to form a stable government.
Here’s how things might play out:
Traffic Light Coalition 🚦: This could be the most likely combination. Its name derives from the parties that would be included, the Social Democrats (red), the free market liberal Free Democrats (yellow) and the Greens (uh, green).
Jamaica Coalition 🇯🇲: If Chancellor Angela Merkel’s conservative Christian Democratic Union (black) should take the lead, Germany might be looking at a Jamaica coalition — named after the black, green and yellow of the Jamaican flag. That bloc would consist of the conservatives, the Greens and the Free Democrats.
And the kiwi 🥝? That would be a duo of the conservatives and the Greens, who have worked together in several state governments, but on current polling are unlikely to command a national majority.
Given the relatively low polling of the once-mighty Christian Democrats and Social Democrats, the topic of possible coalitions has dominated news coverage for weeks in Germany. For the past five years, the two big parties have governed Germany together in a “Grand Coalition,” but they don’t want to repeat that and it might not have a majority in any case.
The Social Democrats and the Greens have governed Germany together before — a prosaically named “Red-Green coalition” was in power from 1997 until 2005 — and have signaled their willingness to work together again. But this time they are not expected to win the seats necessary to get a majority on their own.
Seeing their popularity slip, Merkel’s conservatives and much of the conservative media have warned that an ascendant Social Democrats would turn to the far-left party, Die Linke, to round out their numbers.
They call it the “Elephant Round”: After the polls close and as the votes are being counted on Sunday, all of the heavy-hitting party leaders sit down together, live on public television, to discuss the outcome that is shaping up.
Those who are winning will exclaim, those who are losing will explain and smaller parties will jockey for position in a new government, cozying up to potential partners or coolly shunning others.
For Germans watching at home, the event, which is scheduled to start at 8:15, is a chance to read the tea leaves about their future government.
For the politicians sitting in the brightly lit studio, the round offers them a chance to try to set the tone for the weeks of negotiations that are expected to follow, given that none of the parties running are expected to win enough votes to allow them to govern alone. Leaders of the smaller parties use the opportunity to make their first demands and draw their lines in the sand.
It is a chance for grandstanding and, occasionally, for grinning. That happened famously in 2005, when Chancellor Gerhard Schröder’s Social Democrats lost by a small margin to Angela Merkel’s Christian Democratic Union. He nevertheless tried to claim victory, on grounds that his party had done much better than predicted in the polls. “We’ve won,” Ms. Merkel replied with a controlled smile. “And after a couple of days of reflection, the Social Democrats will realize that, too.”
This year, fate may be in the favor of the Social Democrats. Ms. Merkel is stepping aside after 16 years in power and Olaf Scholz, her vice chancellor and finance minister, led the polls in the final weeks of the race. His campaign portrayed him as coolheaded and in control. Come Sunday night, Germans will be watching to see whether he can keep that up when faced with the “elephants.”
In Germany, political parties name their candidates for chancellor before campaigning begins, and most of the focus falls on the selections who have a realistic chance of winning.
Traditionally, those have been the candidates of the center-right Christian Democrats (Chancellor Angela Merkel’s party) and those of the center-left Social Democrats. For the first time this year, the candidate for the environmentalist Greens is viewed as having a real shot at the chancellery.
Here are the leading hopefuls:
Current position: Co-leader of the Green Party
About her: Ms. Baerbock aims to shake up the status quo. She is challenging Germans to deal with the crises that Ms. Merkel has left largely unattended: decarbonizing the powerful automobile sector; weaning the country off coal; and rethinking trade relationships with strategic competitors like China and Russia.
“This election is not just about what happens in the next four years, it’s about our future,” Ms. Baerbock told a crowd in Bochum, a western German town, this summer.
Ms. Baerbock, who has not a position in government, has started off on a promising note, but her campaign has struggled as she has been a frequent target of disinformation efforts. She has also been accused by rivals of plagiarism and of padding her résumé, and her Green Party has been faulted for not being able to capitalize on environmental issues in the wake of flooding this summer.
Even so, there is almost no combination of parties imaginable in the next coalition government that does not include the Greens. That makes Ms. Baerbock, her ideas and her party of central importance to Germany’s future.
“We need change to preserve what we love and cherish,” she told the crowd in Bochum. “Change requires courage, and change is on the ballot on Sept. 26.”
Current position: Leader of the Christian Democratic Union; governor of the state of North Rhine-Westphalia
About him: Mr. Laschet has run North Rhine-Westphalia, Germany’s most populous state, since 2017 — a credential he has long said qualifies him to run the country. As the leader of the Christian Democratic Union, Ms. Merkel’s party, he should have been the natural heir to the chancellor. But his gaffe-prone campaign has struggled to find traction among Germans. Extraordinary flooding this summer in the region he runs exposed flaws in his environmental policies and disaster management. He was caught on camera laughing during a solemn ceremony for flood victims.
But Mr. Laschet is known for comebacks, and for surviving blunders.
Among his influences is his faith. At a time when more and more Germans are quitting the Roman Catholic Church, Mr. Laschet is a proud member. Another influence is Aachen, Germany’s westernmost city, where he was born and raised. Growing up in a place with deep ties to Belgium and the Netherlands, Mr. Laschet has been integrated into the larger European ideal all of his life.
Current position: Vice chancellor of Germany and federal finance minister
About him: When Olaf Scholz asked his fellow Social Democrats to nominate him as their candidate for chancellor, some inside his own camp publicly wondered if the party should bother fielding a candidate at all. What a difference a few months make. Today, Mr. Scholz and his once moribund party have unexpectedly become the favorites to lead the next government.
During the campaign, Mr. Scholz has managed to turn what has long been the main liability for his party — co-governing as junior partners of Ms. Merkel’s conservatives — into his main asset: In an election with no incumbent, he has styled himself as the incumbent — or as the closest thing there is to Ms. Merkel.
“Germans aren’t a very change-friendly people, and the departure of Angela Merkel is basically enough change for them,” said Christiane Hoffmann, a prominent political observer and journalist. “They’re most likely to trust the candidate who promises that the transition is as easy as possible.”
He has been photographed making the chancellor’s hallmark diamond-shaped hand gesture — the “Merkel rhombus” — and used the female form of the German word for chancellor on a campaign poster to convince Germans that he could continue Ms. Merkel’s work even though he is a man.
The symbolism isn’t subtle, but it is working — so well in fact that the chancellor herself has felt compelled to push back on it — most recently in what might be her last speech in the Bundestag.
It has been said that Germans are sometimes so organized that chaos reigns. Germany’s election system is no exception. It is so complex that even many Germans don’t understand it.
Here’s a brief primer.
Are voters choosing a chancellor today?
Not exactly. Unlike in the United States, voters don’t directly elect their head of government. Rather, they vote for representatives in Parliament, who will choose the next chancellor, but only after forming a government. More on that later.
The major parties declare who they would choose for chancellor, so Germans going to the polls today know who they are in effect voting for. This year the candidates most likely to become chancellor are Olaf Scholz of the Social Democrats or Armin Laschet of the Christian Democrats. Annalena Baerbock, a Green, has an outside chance.
Who can vote?
Any German citizen 18 or over. They don’t need to register beforehand.
How are seats in Parliament allocated?
Everyone going to the polls today has two votes. The first vote is for a candidate to be the district’s local representative. The second vote is for a party. Voters can split their votes among parties and often do. For example, a person could cast one vote for a Social Democrat as the local member of Parliament, and a second vote for the Christian Democrats as a party.
Parliament has 598 members, but could wind up with many more because of a quirk in the system. The top vote-getter in every district automatically gets a seat in Parliament. These candidates account for half of the members of Parliament. The remaining seats are allocated according to how many second votes each party receives.
But parties may be allocated additional seats according to a formula designed to ensure that every faction in Parliament has a delegation that accurately reflects its national support. So Parliament could easily wind up with 700 members.
Also: A party that polls less than 5 percent doesn’t get any seats at all.
What happens next?
It is very unlikely that any party will wind up with a majority in Parliament. The party that gets the most votes must then try to form a government by agreeing to a coalition with other parties. That has become mathematically more difficult because of the rise of the far-right Alternative for Germany party and the far-left Linke party.
The mainstream parties have ruled out coalitions with either of those parties because of their extreme positions. But it will be a struggle for the remaining parties to find enough common ground to cobble together a majority. The process could take months.
Voter turnout in Germany— as a measure of thepeople visiting polling stations — was down on Sunday when compared to the last election in 2017, officials said. But the number is misleading. Participation could be extraordinarily high once mail-in ballots are counted.
By 2 p.m., 37 percent of eligible voters had cast ballots in person, election officials said, down from 41 percent during the same period in 2017. But at least 40 percent of Germans were expected to vote by mail because of the coronavirus, potentially pushing turnout above the 76 percent recorded in 2017.
Despite the decrease in in-person voting nationwide, there were long lines at polling stations in Berlin, where voters were also choosing candidates for the local government. Some polling places reportedly ran out of ballots and had trouble getting more because many streets were closed because of the Berlin Marathon, which was expected to attract almost 30,000 participants.
With Chancellor Angela Merkel poised to step down after 16 years in office, the stakes are high. Polls showed a close race between the Social Democrats and the Christian Democratic Union, Ms. Merkel’s party, which could encourage turnout. Voting sites remain open until 6 p.m. local time.
The high number of mail-in ballots is not expected to delay the results in the same way that occurred in the United States presidential elections last year, when close races in some states were not decided for days. German officials will only count mail-in ballots that had arrived by Sunday, and should have a good idea by midnight at the latest of which party prevailed.
The Alternative for Germany, or AfD, which shocked the nation four years ago by becoming the first far-right party to win seats in Parliament since World War II, suffered a slippage in support Sunday but also solidified its status as a permanent force to be reckoned with.
“We are here to stay, and we showed that today,” Tino Chrupalla, co-leader of the party, told party members gathered on the outskirts of Berlin.
Early results showed the party with 11 percent of the votes, down from almost 13 percent in 2017. The AfD is likely to no longer be the largest opposition party in Parliament.
If those results hold in final tallies, that will still give the AfD a sizable delegation in Parliament, and the vote showed that the party has a core constituency even when immigration, its main issue, was not a major topic in the campaign.
At the AfD’s post-election gathering Sunday, activists took comfort in the poor showing by the Christian Democrats, the party of Chancellor Angela Merkel, who compete with the AfD for conservative voters. “The C.D.U. got what they deserved,” said Alexander Gauland, the leader of the AfD delegation in Parliament.
Alternative for Germany held its election party at an event space 45 minutes by subway from central Berlin, perhaps in an effort to discourage counter-demonstrators. Several dozen protesters gathered across the street from the AfD event, holding signs accusing the party of being fascist. But they were probably outnumbered by the police.
As AfD activists ate potato salad and wurst from a buffet, the prevailing view seemed to be that the party’s candidates would have done better if the media and the other parties hadn’t ganged up on them.
“We had to campaign against everyone,” said Daniela Öeynhausen, who appears to have won a seat in the state Parliament of Brandenburg. “It was still an impressive two-digit result considering the unfair attacks.”
Julian Potthast, who said he believed he had won election to a district council in a neighborhood of Berlin, portrayed the party — whose rhetoric has been linked to attacks on immigrants or people perceived as non-Germans — as itself the victim of violence. He said that his vehicle was vandalized and that graffiti was sprayed on his home.
The party was unfairly portrayed as fascist, he complained. But he also conceded the party might have made mistakes, for example in its stance against restrictions to limit the spread of the coronavirus. “It’s not as good as we hoped,” Mr. Potthast said. “We have to look very carefully at why we lost votes.”
Chancellor Angela Merkel will not disappear Sunday night after the votes are counted.
Until a new government is formed, a process that can take several weeks to several months, she will remain in office as head of the acting, or caretaker, government.
Ms. Merkel announced in the fall of 2018 that she would not run again and she gave up leadership of her party, the Christian Democratic Union. After that, her position as chancellor was weakened as members of the C.D.U. jockeyed to replace her. She had hoped to stay out of the election campaign, but as the conservative candidate, Armin Laschet, started to flounder, she made several appearances aimed at bolstering support for him.
Ms. Merkel is expected to try to take a similarly hands-off approach to steering the caretaker government — if world events allow. The last two years of her fourth and final term in office has seen the deadly coronavirus pandemic, what she herself has called “apocalyptic” flooding in western Germany and the chaotic withdrawal from Afghanistan.
Once the new chancellor is sworn in, Ms. Merkel will vacate her office in the imposing concrete building that dominates Berlin’s government district for good.
But, after the last election, in 2017, it took 171 days — or nearly six months — to form a new government, which means she is likely to be around for a while.
What she will do next remains to be seen. In response to that question in repeated interviews, she has said that first and foremost she will take some time off to reflect and reorient herself before making her next move.
“I will take a break and I will think about what really interests me, because in the past 16 years, I haven’t had the time to do that,” she said in July, after receiving an honorary doctorate from Johns Hopkins University.
“Then I will maybe read a bit, and then my eyes might close because I am tired and I will sleep a bit,” she said, with a smile: “And then we’ll see where I emerge.”
BERLIN — German election officials are expecting mail-in ballots to break records in Sunday’s federal election. At least 40 percent and possibly a majority of ballots will arrive by mail, according to Georg Thiel, head of the agency in charge of counting the votes.
Although actual tallies will only be known after polls close, the authorities have seen requests for mail-in ballots grow this year as the pandemic fuels anxiety about crowded polling stations.
Mail-in balloting has been permitted in Germany for more than 60 years. When it was first allowed, in the 1957 election, only 5 percent of voters used the option; during the last federal election in 2017, 29 percent chose to mail in their choice. Vote counters are set up to handle a doubling of that number — nearly 60 percent — this year, Mr. Thiel said.
The postal service in Germany is one of the quickest and most reliable in the world, with letters usually delivered within a day to anywhere in the country. Still, an official warned voters last week that if they wanted their ballot to be counted, it should be in the mail by Thursday; only ballots received by 6 p.m. on Sunday — when polls close — will be tallied.
The populist Alternative for Germany party, segments of which have parroted former President Donald J. Trump’s claims of manipulated mail-in ballots in the U.S., has used slogans like “the mailbox is not a ballot box” to try to dissuade voters from using the option. But those concerns do not appear to have resonated with the electorate.
Sixty million people are eligible to vote in the German national election on Sunday. There won’t be a new government that night, or the next day — it could take the rival parties weeks or even months to settle on a coalition with a parliamentary majority. But the ballots are tallied quickly, and the new shape of Germany’s political landscape is likely to be visible within hours.
Here’s what Election Day will look like, and what to watch for.
8 a.m. local time: Polls opened. Candidates are not allowed to campaign on this day, but some may be seen casting ballots.
6 p.m. (noon Eastern): Polling stations close. Not long after, the first exit polls should be available. These polls can be within percentage points of the final result. But this year, because the race is tight, it could be a few more hours before a clear picture emerges. Mail-in ballots, which have been part of Germany’s voting system since 1957, are expected to play an outsized role given the pandemic, as they did in the U.S. presidential election. Only mail-in ballots received by 6 p.m. Sunday will be counted.
Around 6:15 p.m.: The first projections based on actual counted ballots will be released. These get updated throughout the evening until a fairly clear picture emerges of which party is winning.
8:15 p.m.: The heads of all the major parties meet to discuss successes and failures of their campaigns, and they will signal who they would be willing to work with in a coalition government. This discussion is called the “Elephant Round,” and it lasts an hour.
8 p.m. to midnight: Nearly all votes should be counted.
Early, early morning: The election authorities release something they call the official temporary results. These usually come between 2 a.m. and 3 a.m. — though during the last national election, they didn’t arrive until 5:30 a.m.
During her 16 years as Germany’s chancellor, Angela Merkel has become an international avatar of calm, reason and democratic values for the way she handled crises that included a near financial meltdown of the eurozone, the arrival of more than a million migrants and a pandemic.
Today Germany is an economic colossus, the engine of Europe, enjoying prosperity and near full employment despite the pandemic. But can it last?
That is the question looming as Ms. Merkel prepares to leave the political stage after national elections on Sunday. There are signs that Germany is economically vulnerable, losing competitiveness and unprepared for a future shaped by technology and the rivalry between the United States and China.
During her tenure, economists say, Germany neglected to build world-class digital infrastructure, bungled a hasty exit from nuclear power, and became alarmingly dependent on China as a market for its autos and other exports.
The China question is especially complex. Germany’s strong growth during Ms. Merkel’s tenure was largely a result of trade with China, which she helped promote. But, increasingly, China is becoming a competitor in areas like industrial machinery and electric vehicles.
Economists say that Germany has not invested enough in education and in emerging technologies like artificial intelligence and electric vehicles. Germans pay some of the highest energy prices in the world because Ms. Merkel pushed to close nuclear power plants, without expanding the country’s network of renewable energy sources enough to cover the deficit.
“That is going to come back to haunt Germany in the next 10 years,” said Guntram Wolff, director of Bruegel, a research institute in Brussels.
WÜLFRATH, Germany — Hibaja Maai gave birth three days after arriving in Germany.
She had fled the bombs that destroyed her home in Syria and crossed the black waters of the Mediterranean on a rickety boat with her three young children. In Greece, a doctor urged her to stay put, but she pressed on, through Macedonia, Serbia, Hungary and Austria. Only after she had crossed the border into Bavaria did she relax and almost immediately go into labor.
“It’s a girl,” the doctor said when he handed her the newborn bundle.
There was no question in Ms. Maai’s mind what her daughter’s name would be.
“We are calling her Angela,” she told her husband, who had fled six months earlier and was reunited with his family two days before little Angela’s birth on Feb. 1, 2016.
“Angela Merkel saved our lives,” Ms. Maai said in a recent interview in her new hometown, Wülfrath, in northwestern Germany. “She gave us a roof over our heads, and she gave a future to our children. We love her like a mother.”
Chancellor Angela Merkel is stepping down after her replacement is chosen following Germany’s Sept. 26 election. Her decision to welcome more than a million refugees from Syria, Iraq, Afghanistan and elsewhere in 2015 and 2016 stands as perhaps the most consequential moment of her 16 years in power.
It changed Europe, changed Germany, and above all changed the lives of those seeking refuge, a debt acknowledged by families who named their newborn children after her in gratitude.
The chancellor has no children of her own. But in different corners of Germany, there are now 5- and 6-year-old girls (and some boys) who carry variations of her name — Angela, Angie, Merkel and even Angela Merkel. How many is impossible to say. The New York Times has identified nine, but social workers suggest there could be far more, each of them now calling Germany home.
Never before has the issue of climate change played such a role in a German election.
Though it still remained unclear who will lead Germany, nearly every party pledged to put climate change near the top of the agenda for the next government.
Despite entering office in 2005 with ambitions to reduce carbon emissions, four successive governments under Chancellor Angela Merkel failed to significantly reduce Germany’s carbon footprint. It remains in the top 10 of the world’s most polluting countries, according to the World Bank.
It has been young climate activists who have succeeded in bringing the climate debate to the forefront of Germany’s political discussion. This year, they successfully took the government to court, forcing a 2019 law aimed at bringing the country’s carbon emissions down to nearly zero by 2050 to be reworked with more ambitious and detailed goals to reduce emissions through 2030.
On Friday, people of all ages marched through the center of Berlin, then rallied on the lawn before the Reichstag, where Germany’s Parliament meets. Thousands turned out for similar protests in other cities across the country.
They were joined by Greta Thunberg, the 18-year-old climate activist who started the Fridays for Future protests in Stockholm in 2018 by skipping school as a way of shaming the world into addressing climate change, made a guest appearance at a protest in Berlin. Future Fridays were a staple in Germany until the pandemic hit.
“Yes, we must vote and you must vote, but remember that voting will not be enough,” she told the crowd, urging them to stay motivated and keep up the pressure on politicians.
“We can still turn this around. People are ready for change,” she said. “We demand the change and we are the change.”
BERLIN — In the prelude to Sunday’s federal election, one of the strangest questions faced by Armin Laschet, governor of Germany’s most populous state and one of the front-runners, was what his dragon name would be.
Mr. Laschet, apparently nonplused, exhaled loudly. “No idea,” he answered. “What kind of names do dragons have?”
As the vote neared and the competition to replace Chancellor Angela Merkel increasingly turned on the candidates’ characters, the contenders submitted themselves to an exhaustive schedule of interviews, debates and town hall-style discussions — including some inquiries from children. In fact, many of the most memorable moments were prompted by the younger questioners.
On one program, “Can You Do the Chancellery,” each of the main candidates was given 30 minutes to teach a classroom of 8- to 13-year-olds. During their separate sessions leading the class, candidates answered questions and had to explain complex themes (like global taxation or global warming) on a whiteboard.
Pauline and Romeo, the children who asked Mr. Laschet about dragons, were part of a segment on a late-night talk show. The two, both 11, threw Mr. Laschet no softballs. Among other things, they asked if he was planning on quitting smoking (a question he dodged, though he did offer that he did not inhale) and about a far-right candidate in his party.
When the 10-minute segment aired this month, Mr. Laschet was widely panned for his performance. (Two other candidates, Annalena Baerbock of the Greens and Olaf Scholz of the Social Democrats, survived Pauline and Romeo without making any headlines.)
But Mr. Laschet was not the only one to struggle. Tino Chrupalla, co-chairman of the populist Alternative for Germany party, also had a tough time with a younger interrogator.
In a publicly broadcast interview, Mr. Chrupalla told a teenage reporter called Alexander that his party wanted to see more German poems and songs being taught in classrooms. But when Alexander asked him what his favorite German poem was, Mr. Chrupalla struggled to name one.
Unusually long lines at polling stations on Sunday caused several Berlin voting locations to remain open for hours after the 6 p.m. closing deadline. That extension may add hours to the time it will take Germany to tally the votes.
The culprit seems to have been a combination of higher-than-expected in-person voting, missing or wrong ballots, and a road-blocking marathon that delayed restocking supplies.
Paco Mallia, 18, who looked forward to voting for the first time, turned back when he saw the long line at his polling station in the central neighborhood of Moabit on Sunday morning.
When he returned just before closing time, the line remained long, but an election worker assured Mr. Mallia that he would get to vote.
At other polling stations in the city, handwritten notes informed voters that as long as they stood in line by 6 p.m. they could cast a ballot.
Mr. Mallia decided to stay. “This election is kind of a big deal for me,” he said.
Although delays were reported in other jurisdictions, Berlin — where residents also voted in state and local elections — seems to have been hardest hit.
Dirk Behrendt, a Green Party city official, demanded an investigation into the delays.
Investors on three continents dumped stocks on Monday, fretting that the governments of the world’s two largest economies — China and the United States — would act in ways that could undercut the nascent global economic recovery.
The Chinese government’s reluctance to step in and save a highly indebted property developer just days before a big interest payment is due signaled to investors that Beijing might break with its longstanding policy of bailing out its homegrown stars.
And in the United States, the globe’s No. 1 economy, investors worried that the Federal Reserve would soon begin cutting back its huge purchases of government bonds, which had helped drive stocks to a series of record highs since the coronavirus pandemic hit.
The sell-off started in Asia and spread to Europe — where exporters to China were slammed — before landing in the United States, where stocks appeared to be heading for their worst performance of the year before a rally at the end of the trading day. The S&P 500 closed down 1.7 percent, its worst daily performance since mid-May, after being down as much as 2.9 percent in the afternoon.
to ignore a variety of issues complicating the recovery — including the emergence of the Delta variant and the supply chain snarls that have bedeviled consumers and manufacturers alike.
But beginning this month, as Evergrande began to teeter and the likelihood of the Fed’s scaling back — or tapering — its bond-buying programs grew, the market’s protective bubble began to deflate. Some U.S. investors are also concerned that tax increases are in the offing — including on share buybacks and corporate profits — to help pay for a spending push by the federal government, the signature piece of which is President Biden’s proposed $3.5 trillion budget bill. Separately, Congress also must act to raise the government’s borrowing limit, a politically charged process that has at times thrown markets for a loop.
On Monday, those currents combined, reflecting the interconnectedness of the global markets as investors everywhere sold their holdings.
the rancorous debate about increasing the debt limit was accompanied by a sharp market slump, as representatives in Washington appeared to flirt with the idea of not raising the constraint on borrowing, which would effectively amount to a default on Treasury bonds.
“It’sgoing to be drama for the sake of politics,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management. “People don’t like that.”
If Israel was going to kill a top Iranian official, an act that had the potential to start a war, it needed the assent and protection of the United States. That meant acting before Mr. Biden could take office. In Mr. Netanyahu’s best-case scenario, the assassination would derail any chance of resurrecting the nuclear agreement even if Mr. Biden won.
Mohsen Fakhrizadeh grew up in a conservative family in the holy city of Qom, the theological heart of Shia Islam. He was 18 when the Islamic revolution toppled Iran’s monarchy, a historical reckoning that fired his imagination.
He set out to achieve two dreams: to become a nuclear scientist and to take part in the military wing of the new government. As a symbol of his devotion to the revolution, he wore a silver ring with a large, oval red agate, the same type worn by Iran’s supreme leader, Ayatollah Ali Khamenei, and by General Suleimani.
He joined the Revolutionary Guards and climbed the ranks to general. He earned a Ph.D. in nuclear physics from Isfahan University of Technology with a dissertation on “identifying neutrons,” according to Ali Akbar Salehi, the former head of Iran’s Atomic Energy Agency and a longtime friend and colleague.
He led the missile development program for the Guards and pioneered the country’s nuclear program. As research director for the Defense Ministry, he played a key role in developing homegrown drones and, according to two Iranian officials, traveled to North Korea to join forces on missile development. At the time of his death, he was deputy defense minister.
“In the field of nuclear and nanotechnology and biochemical war, Mr. Fakhrizadeh was a character on par with Qassim Suleimani but in a totally covert way,” Gheish Ghoreishi, who has advised Iran’s Foreign Ministry on Arab affairs, said in an interview.
When Iran needed sensitive equipment or technology that was prohibited under international sanctions, Mr. Fakhrizadeh found ways to obtain them.
Just weeks before Hurricane Ida knocked out power to much of Louisiana, leaving its residents exposed to extreme heat and humidity, the chief executive of Entergy, the state’s biggest utility company, told Wall Street that it had been upgrading power lines and equipment to withstand big storms.
“Building greater resiliency into our system is an ongoing focus,” the executive, Leo P. Denault, told financial analysts on a conference call on Aug. 4, adding that Entergy was replacing its towers and poles with equipment “able to handle higher wind loading and flood levels.”
Mr. Denault’s statements would soon be tested harshly. On the last Sunday in August, Hurricane Ida made landfall in Louisiana and dealt a catastrophic blow to Entergy’s power lines, towers and poles, many of which were built decades ago to withstand much weaker hurricanes. The company had not upgraded or replaced a lot of that equipment with more modern gear designed to survive the 150 mile-an-hour wind gusts that Ida brought to bear on the state.
A hurricane like Ida would have been a challenge to any power system built over many decades that contains a mix of dated and new equipment. But some energy experts said Entergy was clearly unprepared for the Category 4 storm despite what executives have said about efforts to strengthen its network.
a Category 2 storm, according to an analysis of regulatory filing and other company records by McCullough Research, a consulting firm based in Portland, Ore., that advises power companies and government agencies.
Entergy said that analysis was inaccurate but wouldn’t say how many of its transmission structures were built to withstand 150 mile-per-hour winds. The company has said that its towers met the safety standards in place at the time of installation but older standards often assumed wind speeds well below 150 m.p.h.
The Institute of Electrical and Electronics Engineers, a professional group whose guidelines are widely followed by utilities and other industries, recommends that power companies that operate in areas vulnerable to hurricanes install equipment that can withstand major storms and return service quickly when systems fail. In coastal areas of Louisiana, for example, it says large transmission equipment should be designed to withstand winds of 150 m.p.h.
growing ferocity of hurricanes. The company says it had acted with alacrity. Its critics contend that it dragged its feet.
to restart a $210 million natural gas-fired plant the company opened in New Orleans last year that it said would provide power during periods of high demand, including after storms. But energy experts say it is a lot more concerning that so many of the company’s lines went down — and did so for the second year in a row.
Last year, Hurricane Laura, a Category 4 storm, destroyed and damaged hundreds of Entergy’s towers and poles in Southwestern Louisiana. In April, Entergy told the Louisiana Public Service Commission, which regulates its operations outside New Orleans, that the company had strengthened its equipment, including the installation of stronger distribution poles in coastal areas particularly vulnerable to high winds.
Michelle P. Bourg, who is responsible for transmission at Entergy’s Louisiana operations, told regulators that because it was too expensive to make the entire network resilient, Entergy pursued “targeted programs that cost effectively reduce the risks to reliability.”
In a statement, Entergy said its spending on transmission was working, noting that Ida destroyed or damaged 508 transmission structures, compared with 1,909 during Laura and 1,003 in Katrina. The company added that its annual investment in transmission in Louisiana and New Orleans has increased over the last eight years and totaled $926 million in 2020, when it spent extensively on repairs after Laura. The company spent $471 million on transmission in 2019.
“The facts of this storm support that we have made substantial progress in terms of resiliency since the storms that hit our system in the early 2000s — both generally and with respect to transmission in particular,” said Jerry Nappi, an Entergy spokesman.
The company declined to provide the age of damaged or destroyed transmission structures and an age range for the damaged distribution poles and equipment. Mr. Nappi acknowledged that distribution poles suffered widespread destruction and were not built to withstand winds of 130 to 150 m.p.h.
“Substantial additional investment will be required to mitigate hardship and avoid lengthy outages as increasingly powerful storms hit with increasing frequency,” he said in an email. “We are pursuing much-needed federal support for the additional hardening needed without compromising the affordability of electricity on which our customers and communities depend.”
The company’s plea for more help comes as President Biden is pushing to upgrade and expand the nation’s electricity system to address climate change as well as to harden equipment against disasters. Part of his plan includes spending tens of billions of dollars on transmission lines. Mr. Biden also wants to provide incentives for clean energy sources like solar and wind power and batteries — the kinds of improvements that community leaders in New Orleans had sought for years and that Entergy has often pushed back on.
Susan Guidry, a former member of the New Orleans City Council, said she opposed the construction of the new natural gas plant, which was located in a low-lying area near neighborhoods made up mostly of African Americans and Vietnamese Americans. Instead, she pushed for upgrades to the transmission and distribution system and more investment in solar power and batteries. The council ultimately approved Entergy’s plans for the plant over her objections.
“One of the things we argued about was that they should be upgrading transmission lines rather than building a peaking plant,” Ms. Guidry said.
In addition, she said, she called for the company to replace the wooden poles in neighborhoods with those built with stronger materials.
Robert McCullough, principal of McCullough Research, said it was hard to understand why Entergy had not upgraded towers and poles more quickly.
“Wood poles no longer have the expected lifetime in the face of climate change,” he said. “Given the repeated failures, it is going to be cost-effective to replace them with more durable options that can survive repeated Category 4 storms — including going to metal poles in many circumstances.”
Had Entergy invested more in its transmission and distribution lines and solar panels and battery systems, some green energy activists argued, the city and state would not have suffered as widespread and as long a power outage as it did after Ida.
“Entergy Louisiana needs to be held accountable for this,” said one of those activists, Logan Atkinson Burke, executive director of the Alliance for Affordable Clean Energy.
Entergy has argued that the natural gas plant was a much more affordable and reliable option for providing electricity during periods of high demand than solar panels and batteries.
Jennifer Granholm, Mr. Biden’s energy secretary, said that Ida highlighted the need for a big investment in electric grids. That might include putting more power lines serving homes and businesses under ground. Burying wires would protect them from winds, though it could make it harder to access the lines during floods.
“Clearly, as New Orleans builds back, it really does have to build back better in some areas,” Ms. Granholm said in an interview this month.
Mr. Nappi, the Entergy spokesman, said that distribution lines in some parts of New Orleans and elsewhere are already underground but that burying more of them would be expensive. “Distribution assets can be made to withstand extreme winds, through engineering or under grounding, but at significant cost and disruption to customers and to the community,” he said.
Living on the South Carolina coast means living under the threat of dangerous weather during storm season. But the added peril of the pandemic made Ann Freeman nervous.
“What do I do if there’s an evacuation or there’s a storm and you have all this coronavirus and problems with hotels?” Ms. Freeman said. “So I said, ‘Maybe now is the time.’”
That’s why Ms. Freeman spent $12,400 last year to install a Generac backup generator at her home on Johns Island, a sea island near the Charleston peninsula. The wait — about three months — seemed long.
But she was lucky: The wait is twice as long now.
Demand for backup generators has soared over the last year, as housebound Americans focused on preparing their homes for the worst, just as a surge of extreme weather ensured many experienced it.
10 deaths in New Orleans are believed to have been tied to the heat. Over the summer, officials in California warned that wildfires might once again force rolling blackouts amid record heat and the threat of wildfire. In February, a deep freeze turned deadly after widespread outages in Texas. Even lower-profile outages — last month, storms in Michigan left almost a million homes and businesses in the dark for up to several days — have many American homeowners buying mini power plants of their own.
The vast majority are made by a single company: Generac, a 62-year-old Waukesha, Wis., manufacturer that accounts for roughly 75 percent of standby home generator sales in the United States. Its dominance of the market and the growing threat posed by increasingly erratic weather have turned it into a Wall Street darling.
climate crises is shifting the priorities of American consumers.
“Instead of a nice-to-have, backup power is increasingly a need-to-have, when you’re working at home,” said Mark Strouse, a J.P. Morgan analyst who covers Generac and other alternative energy stocks.
and Etsy — have shone as a result of Covid-era shocks and economic disruptions. And the vaccine-maker Moderna is the best-performing stock in the S&P 500. But Generac and a few other alternative energy companies have ballooned in value at the same time.
struck in June during a heat wave, and a prediction in the Farmers’ Almanac of another round of storms early next year made the decision easy: It was time to buy a generator.
The 15,000-watt Generac generator was hooked up last week, big enough to keep the house snug if the power goes out this winter. “I’m not going through that again,” Ms. Collins said.
Generac’s sales are up roughly 70 percent over the past year and orders are vastly outpacing production. The new factory in South Carolina — the two others that produce residential generators are in Wisconsin — is up and running and the company plans to employ about 800 people there by the end of the year. Company officials have floated the prospect of adding further manufacturing operations closer to fast-growing markets like California and Texas, J.P. Morgan analysts reported in a recent client note.
Generac seems to need them. Average delivery times for its generators have lengthened during the pandemic.
Despite dominating the home market, Generac could be vulnerable if competitors are able to serve customers faster. Major manufacturers such as the engine-maker Cummins and the heavy equipment company Caterpillar have a relatively small share of the home generator market, but have the expertise to lift production if they see an opportunity. Generac, aware of the potential competition from other players as well as home solar panels and other solutions, has made a series of acquisitions in the battery and energy storage industry, which is emerging as a small but fast-growing source of revenue for the company.
But there’s no doubt about the demand for its core product right now.
After her generator was installed last week, Ms. Collins took a run around the neighborhood and noticed a neighbor unboxing one in the driveway.
Building and installing enough solar panels to generate up to 45 percent of the country’s power needs will strain manufacturers and the energy industry, increasing demand for materials like aluminum, silicon, steel and glass. The industry will also need to find and train tens of thousands of workers and quickly. Some labor groups have said that in the rush to quickly build solar farms, developers often hire lower-paid nonunion workers rather than the union members Mr. Biden frequently champions.
Challenges like trade disputes could also complicate the push for solar power. China dominates the supply chain for solar panels, and the administration recently began blocking imports connected with the Xinjiang region of China over concerns about the use of forced labor. While many solar companies say they are working to shift away from materials made in Xinjiang, energy experts say the import ban could slow the construction of solar projects throughout the United States in the short term.
Yet, energy analysts said it would be impossible for Mr. Biden to achieve his climate goals without a big increase in the use of solar energy. “No matter how you slice it, you need solar deployments to double or quadruple in the near term,” said Michelle Davis, a principal analyst at Wood Mackenzie, an energy research and consulting firm. “Supply chain constraints are certainly on everyone’s mind.”
Administration officials pointed to changes being made by state and local officials as an example of how the country could begin to move faster toward renewable energy. Regulators in California, for example, are changing the state’s building code to require solar and batteries in new buildings.
Another big area of focus for the administration is greater use of batteries to store energy generated by solar panels and wind turbines for use at night or when the wind is not blowing. The cost of batteries has been falling but remains too high for a rapid shift to renewables and electric cars, according to many analysts.
To some solar industry officials, the Energy Department report ought to help to focus people’s minds on what is possible even if lawmakers haven’t worked out the details.
“In essence the D.O.E. is saying America needs a ton more solar, not less, and we need it today, not tomorrow,” said Bernadette Del Chiaro, executive director of the California Solar and Storage Association, which represents solar developers in the state with by far the largest number of solar installations. “That simple call to action should guide every policymaking decision from city councils to legislatures and regulatory agencies across the country.”