welcome to bloomberg commodities edge. let's get right to the data dating, a look at the top market stories of the week, and the main story is still a power supply shortage. i want to start on the impact of the oil market. brent's pathway to 80 is getting clear. it is the spread between december 2021 and 2022 and it is near seven dollars a barrel, almost double what we saw in august. there are lots of reasons why that is happening to the oil price. natural gas prices could have an impact on the market. u.k. utilities are dropping like flies. more than 1.5 million households in britain being forced to switch energy suppliers as two more supplies collapsed. now seven are out of business

since early august. gas prices could hit as much as $100. the impact on oil is through fuel switching. natural gas prices are in orange , versus the white which is brent. you can move from gas to liquefy and petroleum gas, kerosene, which affects prices of gasoline and diesel. goldman sachs estimates 2 million barrels of oil demand date could be stimulated across sectors. >> we have the potential for gas pushing the demand higher. when we look at opec, they disappointed. iran taken off the table right now. gulf of mexico reductions. all the risk as to the upside, so we stick with our $80 target, maybe even $10 higher than that depending on the winter we get. alix: is there enough oil

supply, and what happens if it is not actually cold? lng prices could fall 70% as supply comes online. in the meantime, there is a lot to do cap. china plans to stop building new coal-fired plants in other nations, and then one of the last sources of international funding for the dirtiest fossil fuel. john kerry, special envoy for climate, addressed china's role in climate change earlier this week. >> china, i hope, over the next course of the round of discussions, have figured it out. hopefully president xi will feel this is a way for the u.s. and china to get on a cooperative track and open up the possibilities to do the other things that we also have to focus on. alix: let's get into it with andrew cosgrove. how much coal could china's

decision actually take off the market here? andrew: thank you for having me. it more pertains to projects either in the permanent stage or pre-permit stage. those account for probably anywhere from 40 to 50 million tons, but that would be demand taken away post 2025. there are already projects that chinese and japanese contractors could pick up the slack and are already building over the next few years. about $30 million. that probably differs or cancels in the out years. alix: there is a lot of pressure on china to do more. when will they stop funding domestic plants, what is the supply and demand dynamic right now? andrew: coincidentally, they need to fund the buildout and capacity of coal mines, not just plants. they are building new coal

plants right now someone as a replacement strategy, the same with steel mills, but more efficient. the supply and demand imbalance is still very tight and likely to be tight over the next few years unless they really crackdown on the power rationing issues which they have already done like for aluminum, steel, and maybe that leaks into other sectors. we don't see the whole s&p loosening materially. alix: thank you so much, andrew. time for commodity in chief, where we speak to one executive in the commodity world. how to reduce co2 emissions is one of the biggest questions facing the human race. you can change the kind of energy you use, you can capture carbon as it is released, or you can suck carbon out of the air. it is hard but it will help.

one way to do it is through the ocean. the ocean naturally takes carbon out of the air in two ways. crashing waves can dissolve co2. gas dissolves on the surface and winds its way down to the ocean floor. once co2 dissolves on the surface, it is eaten by photo plankton. when they die or are eaten by larger fish, that carbon goes deeper into the ocean where it is eventually buried into the sea floor and is formed into rock or shale. some call that marine snow. if this process can be replicated and increased, the oceans can be a tool in decarbonizing the world. it is really hard to measure how much carbon is actually absorbed , and if technology and businesses move too fast, there could be unintended consequences and harm done to the ocean, and it is pricey. $2 billion over the next 10

years will be needed for r&d alone. enter whoi, an organization dedicated to research ocean and exploration. it is scaling up an experiment. understand how this natural process works before man made gets involved. i recently sat down with peter to find out how much the ocean really does. >> the carbon in the very depths of the ocean is measured in billions of tons per year. it is a biologic productivity of the ocean that exists today. the ocean takes up as much carbon as we admit from all global transportation worldwide. alix: the globe would be a lot warmer if we didn't have this ability? >> if the ocean were dead, if

you said no biological activity, the carbon dioxide in the atmosphere would probably double. alix: does that change as oceans themselves get warmer? >> we don't have eyes on the ocean, when we look below the surface, going down to an average of about five kilometers, we don't know how the ocean is changing. oceans have tremendous capacity to take up carbon dioxide from the atmosphere. in fact, this is the concern, we need to understand how the oceans take up that carbon and might be able to sequester that over time. alix: do you have theories or ideas about how that could be scalable in a business model, for example, where a company could come in, take your data and here is what i will do to take carbon out of the atmosphere and put it into rock and ocean? >> this is what we are interested in, to make sure the science gets ahead of that action. essential that we first build

the scientific, technological capability of doing this monitoring. if these solutions driven by what i see will be a very large economic drivers, if they get ahead of the science and this turns into a wild west for the oceans, that is the worst possible outcome. alix: what kind of questions in terms of fisheries, low oxygen areas, all the other unintended consequences. what comes up? >> but then we are most concerned about is that industry, solutions will be presented to the oceans and we will not have our eyes on the ocean. the primary productivity of the oceans, density of fisheries, deep ocean oxygen levels. if there is too much biological activity, that can lead to harmful algal blooms. developing that set of observations, capabilities to monitor the system -- it is like

monitoring the health of patients. alix: how long before you have concrete results? >> i think we can get initial results to within a couple of years. deploying this, monitoring this over time, so that as the oceans are changing, we are keeping our finger on the pulse of the ocean. alix: do we have an idea of what the economic value of all of this could be? >> if somebody could come up with a way to durably and verifiably store carbon somewhere far in excess of a century to millennium, thousands of years, they would have a line of people out the door of people waiting to do business with them. we are talking hundreds of billions of dollars and even trillions of dollars. the current carbon trading market is $320 billion. that went up 20% in one year, last year. alix: that was my interview with the woods hole oceanographic

institute president. staffing shortages and slaughterhouses are leaving pig farms crammed with 95,000 extra animals in the u.k. the problem is where to put them so they don't hock up to much space. farmers are getting creative and putting them in cattle barnes and potato sheds. shortages of co2, one of the most humane and common methods of slaughtering pigs, could result in an overabundance of pigs. that does it for bloomberg commodities edge. catch us every thursday at 1:00 new york time. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. we will speak with the former bank of england governor mark carney. we will discuss the bank's decision, the movie saw in rates today, and esg investing. we will discuss the state of economic recovery through the lens of travel. i will speak with the ceos of tripadvisor, as well as rv company bolus. it's good to quick check on what is happening in the markets. you do see big gains on the s&p 500, third day in a row after the drops we saw monday, now looking at gains for the week. 4458 is the level after rising 62 points. the real action for me is in the yields. right now, you can see the u.k. yield up about 10 basis, almost

11. the u.s. 10 year yield almost 10 basis points. the u.s. 30-year moving higher by 11 basis points. these are huge moves maybe these are three standard deviations and more away from what you would typically see. we have had a 1.20 or one point 30 handle on the u.s. 10-year yield for the past few months and now we have moved briefly above 1.40 today. this is a great chart showing that it is all about real yield. the 10-year nominal yield in white. the 10-year real yield in blue. nominal yields, we are still slightly higher than the 20-year average. if you look at the real yield, we still have a long way to go, and that is why tom keene harps on about it every day on surveillance. let's get to the economy through the lens of travel.

the global forum on travel is underway this week as the u.s. announces it will soon allow entry into most air travelers fully vaccinated against covid-19 vaccine. joining us to discuss is stephen copper, tripadvisor ceo and cofounder. thanks for joining us. i was very excited personally when i saw these restrictions lifted. i can now bring friends with me back home. how important is this for the industry? steve: it is really great, as many people at the conference have been talking about. travel is back, governments are really opening up the capability to move all around. this is my first business trip, a great hotel at a great conference. love being on the road again. i think that will be contagious as the world starts to open up. thank you, president biden, for opening up the u.s..

we look forward to the return of many travelers here and making it easier to get around everywhere. matt: i feel like hotels and restaurants have been knocking it out of the park. airlines do nothing but disappoint. is that just the way it is, we have to accept that air travel is a horrendous experience, whereas the other elements of travel are fantastic ammo curious --and luxurious? steve: i am a traveler like you. i am not a part of the airline industry, per se, but we have to acknowledge how much easier and cheaper it is to fly everywhere. at the moment, because it is so hard to predict where people are going and when, airlines are scrambling to keep everyone going on the right plane to the right places. but i have to cut them some slack. it is really hard to rand logistics when so many things

are changing. as covid restrictions ees, as we all get back out on the road again, i think the airlines will be able to manage meaningfully better than they are now. matt: just the experience. i cannot even fit in an economy seat and i am not a gigantic basketball player. i am 6'4", but i have to buy the extra legroom or move to business if i want to not lose my knees the entire time. they are reducing everything to maximize profits while reducing everything except for the price. it gets cheaper and cheaper, and that is the problem. steve: i actually view it as a gain. folks that are willing to pay the extra legroom helps support the other folks who may not choose to pay that much and are in the more cramped quarters. it is a little bit of price

elasticity. it helps more people get out and travel because that airfare component is cheaper for everyone to be able to move. i think that is great, brings everyone together. we were just talking about our product, tripadvisor plus, as another way to help reinstate travel, get it going again, by providing savings across hundreds of thousands of properties around the globe. again, get that product to help you save, and travel is back. matt: it does seem like leisure travel has bounced back. what about business travel? are you seeing that come back yet? steve: we are starting to see signs of it. there are many predictions that say it will be slower than leisure, clearly, but some folks are saying it will 85 years but it will be bouncing back. i see that as well in terms of

our own business, our own estimates going forward. we are starting slow, getting back on the road to conduct his nose. i believe zoom meetings will be a part of our lifestyle for a long time. but business travel will recover, just a question of time. matt: you are obviously at a conference. i have been going back to conferences as well, and i think everybody is looking, if not already getting into business travel again. steve kaufer, the ceo of tripadvisor. still ahead, we continue our focus on travel. the rv industry set a new record for each of the last nine months. we will speak to the ceo of bowlus, geneva long, and find out why road travel has become so popular. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. the popularity of domestic road travel has really come back due to the pandemic and the rv industry just set a new monthly record for each of the last nine months. think about that, a monthly record for each of the last nine months. geneva long joins us, the ceo of bowlus, which has been called the rolls-royce of the rv world, to talk about the trends they've been seeing. let's talk about the product that you sell. why is it the rolls-royce, what am i getting when i buy a bowlus ? geneva: thanks very much. the bowlus is the most high and travel trailer. we have an amazing combination of performance and luxury. it can be towed by a small suv

because it is lightweight. it is a dream to tow, as you can see in the picture, being towed by a porsche macan. this really opens up your ability to camp in different destinations, whether it be beautiful vineyards, private lands, lands across the west particularly. it is really opening up a different way to travel. those who are looking for something domestic, getting onto that secret that we have all known for a long time, which is luxury land travel across the u.s. is now available to those within rv, especially with a bowlus. matt: definitely looks more comfortable than the airline travel i was just talking about. i do notice there is a lot of aluminum, high and would -- woo

ds. how difficult is that to get right now considering the supply chain issues, the shipping costs , and commodity costs as well? geneva: great question. one of the things we did in 2020, and continue to do every day, is work diligently with long-term and immediate vision to keep our supply chains secure. that means for us, we are favorite customers and also carry higher inventories than we did prior in order to make sure that we are fully hedged against disruptions. as a result, we have delivered all of our bowlus' on time during the pandemic, as well as pre-pandemic. we continue to be hyperaware about how complex and then ball the management of our supply chain is, other supply chains needs to be. for us, the manufacturer, the

high components, we do a lot of it ourselves, so that means we have flexibility because we are making those materials and making those final touches in-house. matt: how is that labor then? you have your own employees putting together most of this product. has it been difficult to find the right people, hard to hire? geneva: we have a really awesome team. we have been able to continue that production over this difficult time and keep our employees safe, keep social distancing, all the rest of the requirements that enable us to have safe manufacturing. we have been very lucky. matt: thanks for joining us, geneva long, ceo and founder of bowlus. coming up, we will shift gears

and focus in on rates. we have seen some incredible movement in the markets today, and we happen to have a pretty fantastic guest with whom to talk about rates. mark carney joins us, former governor of the bank of england. he is also now working with brookfield, running esg investments. a lot to talk about with the former governor. definitely an interview you do not want to miss. this is bloomberg. ♪

mark: i'm mark crumpton with bloomberg first word news. u.s. schools were counting on widespread vaccinations to get all students back to in person

classes for the first time since early 2020. but weeks into the effort, signs of another texting year are emerging. over the past month with kindergarten through 12th grade in session, the country has reported almost one million covid-19 cases among those under the age of 18. at least 2000 schools nationwide have closed, up 18% from the previous week. new york state health commissioner howard zucker, who helped andrew cuomo respond to the pandemic, is stepping down. he was central to allegation to the cuomo administration's covering up of nursing home deaths. the report found officials undercounted covid related deaths in new york nursing homes by as much as 50%. governor kathy hochul says she agrees with the decision to resign. pakistan's government says the

international community should come up with a roadmap that leads to diplomatic recognition of the taliban. the country's foreign minister says the plan should include incentives if taliban leaders fulfill certain requirements. the official said pakistan is "in sync" with the rest of the world and wants to see a stable afghanistan. global news 24 hours a day, on-air, and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ amanda: welcome to bloomberg markets. i'm amanda lang. matt: i'm matt miller. we welcome our bloomberg and bnn bloomberg audiences. here are the top stories we are following for you from around

the world. big jump in rates. we speak to the former bank of england governor mark carney. he leads impact investing at brookfield asset management now, and he will talk to us not only about the moves in rates but the state of esg investing as regulators crackdown on greenwashing. and the latest on ever grand, as chinese regulators told the company to avoid a near-term default on dollar bonds. i feel like we should ask a couple of questions. and shares of carnival cruise rise by the most in two months as the company reports 50% of its fleet will resume service by the end of october. we will have that for you in our stock of the hour. amanda: stocks in general in a risk on kind of move today. we have seen gains after jay powell signaled that he believes the strength of the economy

keeps the central bank on track on its plans to begin tapering, a timeline around tapering an increase in rates. broad-based gains, everything except real estate is higher for the s&p 500. the big groups that got the market where it is remain solidly higher as well. just to give you a sense of how that is driving this market, we see salesforce up more than six percent on its outlook. we are watching yields globally on the rise, including the 10-year. u.k. guilt doing the same thing. the curve steepening in a pretty significant way. for what it is worth, ever grand remains in focus. we have been waiting for this dollar bond coupon which is due today. investors continue to keep and i on ever grand as it becomes

clear that it is having trouble that goes well beyond just bond lenders. the big question is at what point does it collapse under the weight of all of this debt, and part two of that question is what the chinese government does about it. matt: it doesn't look like the chinese government has a number of different ways to deal with this. reports it could be broken up into a few smaller pieces. we have also seen the pboc pushing liquidity out into the market. at least for now, the emergency ripples through global markets seem to be over. i want to get to a different story completely right now for our stock of the hour, but not less exciting. shares of carnival cruises are surging as the company announces

it is on pace to operate at 50% capacity by the end of next month. stocks editor dave wilson has more. we had a travel theme in the show and i feel like we have gone from the least comfortable ways to travel, talking about airlines, to more and more luxurious ways to do it. certainly, on a carnival cruise, you can stretch out.. dave: it is not just the flagship carnival line, it is princess. eight of their nine lines are operating. the exception is in australia. that is where they have this 50% capacity by the end of october. we are talking 42 ships, a little bit less than half of the total, but some of the bigger ones will be on the seas. they are ending for 65% by years

and. it will take a while. this company has been losing money ever since the pandemic began. we will find out how much they lost in their latest fiscal quarter tomorrow. analysts looking for somewhere around $1.6 billion on revenue, . it is going to take a year for the company to start making money again, according to analyst estimates. that is something to watch, what that progression looks like. beyond that, the idea of where the ships are. north america, what is going on with the coronavirus, the biggest issue for the company. the majority of its fleet operate in this region, as opposed to 40% in europe and asia. and then those three ships in

australia. matt: thanks very much, dave wilson. for background, we talk a lot off air about cruises. it seems to be a theme that we continually stumble over. coming up, we will speak about some much more important and probably the opposite names with bank of england governor mark carney, who is now working on esg. i don't think cruises fall into that category. esg investing at brookfield asset management. we will talk about a range of issues. stay with us for that. this is bloomberg. ♪

amanda: this is bloomberg markets. i'm amanda lang. alongside matt miller and mark carney. he is now the head of impact investing at brookfield asset management, leading the charge on a listing companies to embrace that zero emissions for the coming years. delighted to have him. mark: great to be here. amanda: this is all leading up to cop. you are an advisor to boris johnson, playing an important role through the united nations. how important is cop, which will potentially be a rule setting meeting coming in getting companies and investment themes where they need to go? mark: i think it's incredibly important.

what we have seen over the last 18 months in partnership with italy, countries have moved from less than one third of countries having that zero commitments to three quarters of having that zero commitments. underneath those commitments, more policies. consistent with that, president xi's announcement yesterday. those commitments are cascading down from the country level two companies. more than 3000 companies around the world have that zero commitments and are developing the most rigorous plans associated with that. of course, the financial sector is moving in the same direction. as we virtually meet today, we almost have $90 trillion of balance sheets controlled by companies of financial firms, banks, insurers, financial asset

owners, have committed that money toward net zero. the cop process has brought net zero from out of the shadows and into the mainstream. it is really an organizing principle for finance, business, ultimately the economy. amanda: you yourself helped to lead a team that is making decisions today based on an understanding of where things may go, but the final rules, the pricing of those investments have not been baked in. it is an interesting position for you to be in, but it's an interesting position a lot of people happen to be in. you influence the policy, which makes it doubly interesting. but a lot is not known about the outcomes of these investments. how much uncertainty is there on that front? mark: let's start with what is known. the objective is to get to net zero. people can have different opinions about the speed to

which an individual country or the world will get there. we know the objective. secondly, we know there is a range of technologies, most prominently solar, wind, other technologies that are commercially profitable today, highly attractive today, and play a huge role in decarbonization over the next decade. one of the simplest things conceptually is rolling out renewables at scale, rolling out renewable charging for zero emission vehicles at scale. another thing that we know in canada, in the u.k., in europe, is that there will be no new internal combustion engine sales from 2030, 2035. we know where the world is moving with those types of rules. there is huge investment opportunity today. the more growth component of

this, venture capital part of the spectrum is for technologies associated with the other 40% of emission reduction that we will have to do. thank hydrogen, carbon capture storage, sustainable aviation fuel, machine learning ai applications for optimization. but we know a lot. that that we do know is associated with a delta of investment of over a trillion dollars now that needs to ramp up. the opportunity is huge. depending on your risk appetite, there is a huge spectrum of ways to deploy capital. matt: there is also such a huge range of what esg investing could be. on the one hand, you could say this is a retail company that has a very diverse board, which makes sense, because they can then sell their products to more people.

but it could be something that is not a great product for the climate. on the other hand, you have what are truly carbon capture, wind power, causative climate investments. how do you decide where to go in that range? mark: great question. in some respects, the answer is embedded in the question. the element of broader esg, that is the most measurable, concrete , and to some extent in terms of the scale of the opportunities, is around decarbonization investments. taking emissions from up years and moving them down on the path toward net zero. in many respects, that is the easy bit of impact investment, certainly the most impact for the climate. but that is not the alpha to omega as you put it esg. much broader issues around

environmental sustainability in terms of sustainability, and importantly the social governance factors. it is important to have common data for that. that is something that for cop we are delivering. bloomberg users will know that this is the body that provides financial disclosures for basically everybody but the u.s.. they will set up a second pillar for sustainability exposures so we have consistent standards around that. they will start with climate disclosure and then move on. but there is an element when you move further away from that zero two broader esg. we need -- to broader esg. amanda: one of the things that we are seeing at the moment are, judgments are being made by the biggest players in the sectors involved, we have seen it with

energy companies, with long-term investment plans. we have seen it with investors supporting the sector. those high prices could persist when we look at the capex of oil and gas relative to demand, we could find ourselves in an inflationary cycle. certainly want your gas with concern. with the effect that low rates have at a time when we have this shift in investing patterns, how much of a concern should that be for the globes of central banks? mark: central banks, regardless of the cause of underlying moving prices have to make a judgment whether those are transitory or have an element of persistence to them. let's take a step back. first thing in terms of global energy, to be absolutely clear, we have far more proven also fuels, whether oil, gas, certainly coal, then we need.

to be more specific, then we can possibly burn and control the level of the climate. in most cases, twice as much in the case of coal. we can only really afford to burn about a quarter of it. we have more than we need and there will be issues with the transition. more broadly, going back to what does the energy transition been for the economy, for growth and prices, this is a very big, positive investment shock to the global economy. we need to increase the scale of investment into overall energy infrastructure. it will be on the renewable low carbon side rather than on the oil and gas side, but we need to increase that by anywhere from 1.5 trillion dollars to 2.5 trillion dollars a year. that is about two percentage

points of global gdp. that is about the size of the famous savings glut that formed over the early 2000s. that is a big shift if it comes to pass. people will have different views about how quickly that will move , how rapidly that will have an impact, but that will have an impact, in my judgment, on the overall level of global interest rates. tangibly in terms of people's lives, it will have a positive impact in terms of the speed of growth, the number of high quality jobs, and by the way, a better environment for everybody. matt: i want to point out porsche and siemens are working on a synthetic fuel that pulls carbon out of the atmosphere, mixes with water and drives the 911. save the whale tail will be myhashtag on that. i want to get back to your central bank hat, asked what is

happening with central rates right now. all of a sudden, today, after the bank of england discussion, we shot up 10 basis points on treasuries. what do you think is going on here? mark: fortunately, no longer a central bank governor. second thing, i am not following the day to day, but in the broader context, what is going on -- and there are lots of challenges, we all know that. the broader context is we have a global recovery that has momentum, potential to broaden out. the more progress we can make at cop, the more we can provide medium-term strength to that global recovery because of the investment i just talked about. on balance, it is reflationary. on balance, it moves up global rates. balance, it moves things in the

direction we need. that is not a day trader comments, that is a longer term direction. global rates ultimately headed to sub 1% is not persistent with the recovery we are currently on. second, if, as we deliver on these climate goals, this is an investment boom that we can help put in place. we happen to need it for broader reasons but it will have tangible impacts, in my judgment, on the near-term growth trajectory. amanda: so good to have you with us, mark carney, the former governor of the bank of england. heads impact management at brookfield asset management. this is bloomberg. ♪

matt: this is bloomberg markets. i'm matt miller. for what it is worth, this time we are looking at zombie companies. a new study finds these names have expanded by 9% globally in the past decade, these zombie names. zombies are defined as companies trading for more than 10 years and had been unable to their interest burdens from their operating revenues for three consecutive years. it is always interesting when you can use the word is zombie, and with pictures like this. it is interesting that we see a lot of these in real estate, and health care, especially with the huge boom we are seeing. . amanda: they hide in plain sight. a lot of debt investors know they are buying the debt of a company that cannot cover

interests and operating costs. it just speaks to the low rate environment, willingness to take on debt. that is the part of the market that feels like musical chairs. some of these companies should be allowed to fail. matt: we live in an environment where a little deli in new jersey that creates sausage rolls can create over a billion dollars. it's been a pleasure. for amanda lang, i'm matt miller. this is bloomberg. ♪

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mark: nancy pelosi signaling

democrats will avert a government shut down by passing a stopgap without a debt ceiling increase. >> we are not talking about future spending -- it is important to note, this is to pay incurred costs. last year, democrats and republicans together incurred pot -- costs for covid that needs to be paid for. mark: the house passed a stopgap spending measure this week that would keep the government open until december 3 and suspend the debt ceiling until 2022. republicans are expected to block it in the senate. new cdc data shows americans receiving their first dose of a covid-19 vaccine -- in recent days. worrying health officials.