Droughts grip large parts of the globe

This is an audio transcript of the FT News Briefing podcast episode: Droughts grip large parts of the globe

Marc Filippino
Good morning from the Financial Times. Today is Monday, August 22nd, and this is your FT News Briefing.

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Apple says it’s time to come back to the office. Some workers are saying, nah, no thanks. Severe droughts are hitting the UK and the US and Asia. We’ll take a look at the economic impact. And rumours are swirling around the ownership of one of the most famous soccer clubs in the English Premier League. We’ll have a chat and what’s going on at Manchester United. I’m Marc Filippino, and here’s the news you need to start your day.

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Yesterday, a group of Apple employees began circulating an internal petition demanding location flexible work. The petition is pushing back against Apple’s call for workers to return to the office next month. Apple CEO Tim Cook recently told employees in and around the Cupertino headquarters they had to return to the office three days a week starting September 5th. Cook wants to preserve the “in-person collaboration that is so essential to Apple’s culture”. The employees behind the petition argue they’ve shown, during the pandemic, they can produce “exceptional work” remotely. They want Apple to allow them to work with their immediate managers to decide on working arrangements.

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Severe droughts have been gripping Asia, the US and Europe. And it’s leading to record low water levels on key rivers. It’s also affecting the transportation of goods, factory production and of course, agriculture. To talk more about the economic impact of the extreme hot, dry weather, I’m joined by the FT’s climate reporter, Camilla Hodgson. Hey, Camilla.

Camilla Hodgson
Hi. Good morning.

Marc Filippino
Camilla, specifically, one of the big rivers that’s been affected by the droughts is the Yangtze River, that’s in China. And in Europe, the Rhine has really low levels. How critical are these waterways?

Camilla Hodgson
They’re vital. I mean, first thing is these waterways, things like the Rhine and the Po River in Italy, they’re really important for transport. All sorts of different goods go up and down those rivers. So the situation that we’re in now where the rivers are at really low levels is proving quite difficult. Cargo ships are having to take much less cargo. Some ships are, I believe, stuck in traffic. Essentially, at the moment, it’s just really snarling up the whole system. There are also power-related problems. Hydropower, for example, in China and elsewhere in the world. We’re seeing shortages there because hydropower is essentially generating power from water. And if there’s a lack of water, you get less power. That’s the reason why in parts of China, you’re having the likes of Toyota shut down, temporarily shut down manufacturing plants just because they don’t have the power. And the local officials are saying we need to conserve what we have.

Marc Filippino
Camilla, I wanna talk about the UK, where you’re based. This past July was the driest on record and a drought has been formally declared across big parts of England. Can you talk more about the impact that this is having, especially on farmers, the way I understand it?

Camilla Hodgson
Yeah, the drought in the UK, which we’re still in, it’s proving really difficult for all sorts of parts of the economy. Farmers, as you say, are an obvious group here. The grass that cattle feed on is dying, so farmers are having to dip into the supplies of straw and the food that they’ll feed to animals in the winter already. And it’s only August. There are also concerns that they’ll find it difficult to plant crops in the autumn simply because the ground is so dry and compacted. And although there’s been some recent rain, some of it actually quite dramatic, it’s difficult for the ground to absorb all of that all at once. So a lot of it just gets wasted.

Marc Filippino
Oh, wow. That’s interesting. So Camilla, here in the US, the south-west part of the country is in something called a megadrought. The FT reported on one study that estimated it’s the worst drought to hit the region in more than a thousand years. Water levels in the Colorado basin are frighteningly low and that’s a huge resource for a lot of states around there.

Camilla Hodgson
It’s an area that’s really suffered a very long and intense period of drought. And just last week, the US Bureau of Reclamation came out with some new data which basically showed water levels at real historic lows. And they said as a result of that, states, including Arizona and Nevada, would have to really cut their water, the amount that they took from the basin next year. And for Arizona, that’s a cut of 21 per cent. So it’s really significant. And they’re doing that because they say we’re basically approaching a tipping point, something has got to give. Basically what that means in the short term is using less water and figuring out a kind of longer term sustainable approach that because we know that these droughts are not going away.

Marc Filippino
Aside from ordering less water usage, what can governments do?

Camilla Hodgson
It’s really difficult and it’s place-specific. There are tech solutions that you can use, such as desalination plants, which are facilities where you strip the salt out of water so you can make salty water into drinking water or, you know, water for agriculture. The problem with that is that it’s expensive, it’s complicated. You’re not gonna be able to build them everywhere and you need the access to the salty water to start with. Then there are other things being talked about here and elsewhere, such as let’s reduce the amount of leakage in water pipes. A huge amount, millions and millions of gallons of water are lost to water leaks. But these pipes are underground for the most part. So identifying leaks is not necessarily easy. And another thing is just conserving water more generally, being more prudent in how you use it. And that’s kind of what they’re talking about in the Colorado Basin region, just figuring out ways of being able to do more with less.

Marc Filippino
Camilla Hodgson is a climate reporter for the FT. Thanks, Camilla.

Camilla Hodgson
Thank you.

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Marc Filippino
The family that owns one of the most famous sports clubs in the world hasn’t said a word. But that hasn’t stopped speculation about whether the Glazer family might sell Manchester United. Of course, Elon Musk had to jump in with a tweet saying he’s gonna buy the club. Here’s the FT’s Sam Agini telling us about a more serious offer.

Samuel Agini
Billionaire Sir Jim Ratcliffe, who’s one of the UK’s richest people, a life-long supporter of the club, he’s made his interests very clear. He said that he would be interested if the club is for sale. There’s been reports that the Glazers would consider the sale of a minority stake, but others are hopeful that that could go further, that one of the biggest brands in sport could be up for sale. A lot of people I’m talking to are pretty sceptical of that, though.

Marc Filippino
So just to set the stakes a little bit, that this club is worth more than $2bn. It’s listed on the New York Stock Exchange. Selling would be a huge deal. How much of this chatter about a sale is just frustration, people blowing off steam? I mean, Man U has had a terrible season so far.

Samuel Agini
I think what’s interesting is that the Glazers have always been disliked by a lot of the fan base. They acquired the club in a leveraged buyout in 2005 and what that meant was they borrowed money to buy the team. And the cost of being owned by the Glazers, and those costs basically a lot of fans wish would just go straight into improving the squad. At the same time, in the past ten years, the Glazers have really spent, they have really backed United in the transfer market, acquiring stars like Cristiano Ronaldo and helping him to return to the club. He’s you know, he’s one of the biggest names. But it’s just not happening on the pitch. This is the thing with, it’s the strength of football clubs. They have these, you know, huge followings. Manchester United’s is global, but the problem is that when performances turn, then the pressure really ramps up in that fan base. So it’s the strength and the weakness to these owners.

Marc Filippino
Sam Agini is the FT’s sports business reporter. He also writes for our Scoreboard newsletter. We’ll have a link to that in the show notes.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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