Good morning. David Meyer here in Berlin, filling in for Alan.
The flooding that has struck western Germany and neighboring countries is not normal. Yes, catastrophic flooding does happen sometimes, but for it to come in summer like this—two months of rain in two days—is bizarre. Yet here it is, claiming at least 103 lives in Germany alone. Hundreds are still unaccounted for.
There’s consensus here that climate change is partly responsible: higher temperatures make for heavier, more erratic rainstorms. And while Germany is thankfully not a country where climate science is seriously politicized, this event comes at a time when the electorate must make a huge political decision about the implications of that science.
The country will elect its first post-Merkel chancellor in a couple months’ time. There are only two serious candidates: the Greens’ Annalena Baerbock, who was briefly the front-runner before being hit by plagiarism claims, and Armin Laschet of Merkel’s center-right CDU party, who is keen to cast himself as the continuity candidate—and who, as the state premier of deluged North Rhine-Westphalia, is right in the thick of this week’s catastrophe.
The CDU-led government has made genuine progress on the climate front during Merkel’s 16-year tenure, with policies such as the world-leading Energiewende, or energy-transition plan. But the government is often accused of being in thrall to Big Auto (at least, before Dieselgate), and Germany’s own constitutional court recently ordered the government to boost its targets for the sake of future generations. This year’s CDU manifesto is vague on climate, and Laschet himself is far from bullish on the subject; four years ago he notoriously limited the spread of renewable energy in his heavily industrial state by placing restrictions on wind-turbine installations.
Whether that will be enough to revive Baerbock’s fortunes remains to be seen; the Greens are polling around 18% to the conservatives’ 29%, which is deeply challenging this close to the election. But Germans react decisively to disasters—recall how the Fukushima disaster in Japan killed the German nuclear industry—and this week’s catastrophe could help the argument for voting Green, especially in a country where industrialization has already raised regional temperatures by the 2°C the world is trying to avoid.
Whether or not Germans do opt for the Greens and their greater sense of urgency on the climate issue, the floods also join this year’s North American heat disasters in highlighting another fact: our challenge is not just one of limiting future warming, but also one of adapting to changes we see right now.
Meeting these challenges will be incredibly expensive, and there are important debates to be had about who bears the cost. The EU’s new green plan, which will expand carbon pricing within and beyond the union’s borders, is already being fiercely contested over its implications for consumers (and Germany’s choice of chancellor will likely have a big effect as that debate progresses.)
But we can already see grim previews of the alternative right now, and “expensive” doesn’t begin to cover it.
More news below, and don’t forget, nominations for Fortune‘s 40 Under 40 list close Monday.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Xiaomi vs Apple
Apple has slipped to third place in the smartphone-making stakes, with Xiaomi seizing the spot behind market leader Samsung. That's according to market-watcher Canalys. The news sent Xiaomi's shares up more than 4%. Fortune
Hong Kong
Companies floating in Hong Kong will be able to do so without first getting the green light from China's cybersecurity regulator, according to reports emerging from meetings between officials and bankers. Companies listing in the U.S., however, would continue to need approval. (See also: Didi's shares tanking again after a visit from the watchdog.) Bloomberg
China snub
Speaking of worsening Sino-American relations, China has sparked a diplomatic row by refusing to let U.S. Deputy Secretary of State Wendy Sherman meet with her counterpart, Le Yucheng. Beijing also won't let the two countries' top military officials meet. Financial Times
Lab leak theory
WHO Director-General Tedros Adhanom Ghebreyesus has asked China for greater transparency in the search for the coronavirus's origins. Tedros said the earlier push to rule out the possibility of a lab leak in Wuhan was premature: "I was a lab technician myself, I’m an immunologist, and I have worked in the lab, and lab accidents happen. It’s common." Guardian
AROUND THE WATER COOLER
Data uncertainty
It's been a year since the EU's highest court struck down the U.S.-EU Privacy Shield data-sharing pact, and things look bleak for coming up with a legally-sound replacement (Privacy Shield was itself the replacement for another struck-down deal). Do keep your eye on this—it's the digital economy's sword of Damocles. (Bonus read: Max Schrems, the man responsible for all this, on the situation.) Politico
Intel and GlobalFoundries
GlobalFoundries, the chipmaker that Intel rival AMD spun out in 2008, is now being courted by Intel itself. If it happens, the deal could reportedly be worth $30 billion. If it doesn't, GlobalFoundries might hold an IPO. Wall Street Journal
Olympic dreams
International Olympic Committee chief Thomas Bach wants athletes to avoid making political statements at the Tokyo Games: "The podium and the medal ceremonies are not made…for a political or other demonstration…They are made to honor the athletes and the medal winners for sporting achievement and not for their private [views]." FT
Bitcoin emissions
China's share of Bitcoin mining has plummeted from three-quarters to under half, thanks to a government crackdown. But, while much of China's mining used coal energy, a good chunk also used renewables—and now mining is increasing in places like Kazakhstan, where the fossil-fuel energy share is even higher. Fortune
This edition of CEO Daily was edited by David Meyer.
