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Iceland’s new volcano: It’s bringing a new level of excitement and danger to transiting through Reykjavik.

China suspends climate and other dialogue with U.S.: Other areas of cooperation affected by Beijing’s decision include maritime safety, counternarcotics and transnational crime, per AP. Beijing continues to fire ballistic missiles near Taiwan for the first time since 1996. With Beijing warning commercial planes to avoid nearby airspace, Taipei is calling the exercises “a maritime and aerial blockade.”

Right back at you: Deputy Secretary of State Wendy Sherman and U.S. Ambassador to Australia Caroline Kennedy will travel this weekend to the Solomon Islands, which recently signed a defense pact with Beijing.

Cambodian heat: China’s top diplomat Wang Yi walked out before the start of a gala dinner for ASEAN foreign ministers in Cambodia on Thursday evening, where Secretary of State Antony Blinken was also in attendance.

Read the ASEAN Communiqué which is based on consensus between all 10 member states: It expresses “deep disappointment” around Myanmar’s military junta and offers repeated references to upholding international law (a nudge against Russia in Ukraine and China’s maritime claims).

Hunger games: Ambassador Linda Thomas-Greenfield, U.S. Representative to the United Nations, is delivering a keynote address in Accra, Ghana, on the global food security crisis, at 10 a.m. ET. The speech will be livestreamed, and anchors a four-day trip to Uganda, Ghana and Cabo Verde.

Another three ships carrying grain will leave port in Ukraine today, per Turkish Defense Minister Hulusi Akar.

A farmer collects harvest on his field ten kilometres from the front line in the Dnipropetrovsk region, Ukraine, on July 4, 2022. | Efrem Lukatsky/AP Photo

HOW MUCH GRAIN COULD UKRAINE SHIP IF UKRAINE COULD SHIP GRAIN? And how much is enough to make a difference for global food security? Last year 194 grain-carrying ships left Ukraine ports.

As of today, just a small fraction of that is on its way to export markets. Just four grain shipments have left Ukraine ports since Feb. 24. The first ship to leave port Aug. 1 carried 26,000 tons; a total of 480,000 tons of grain, corn and vegetable oil, is ready to ship according to the Ukrainian Port Authority.

If everything goes well with the new U.N. brokered grain deal, between four and five million tons of grain could leave Odesa every month until November. That’s enough to clear the 20 million tonnes stuck in silos in Ukraine. But it doesn’t tell us what will happen with the 60 million tons expected from this summer’s harvest.

Relatedly, Russia reports a record grain harvest this year (it’s impossible to know how much of these figures are stolen Ukrainian crops) — possibly 130 million tonnes, including 87 million tonnes of wheat.

International Crisis Group has a detailed assessment of the winners and losers in Ukraine’s grain struggles.

What’s next, from POLITICO.

Insider looked into how the food crisis is unfolding in 13 locations around the world.

INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.

TAIWAN — PSY-OPS AND SELF-FULFILLING PROPHECIES 

This week’s military exercises are designed to intimidate. “There is certainly in the design and location of the exercise an ambition to psychologically coerce the Taiwanese into thinking that resistance is indeed futile,” Alessio Patalano of King’s College London’s war studies department told Global Insider. And then there are ultranationalists to please at home: the crowd that wanted the PLA to shoot down House Speaker Nancy Pelosi’s plane or at least interfere with it.

This psychological warfare is having other effects: Western companies and governments are having their own crises of confidence. There’s two case studies this week.

SOUTH KOREA SNUBS PELOSI: Newly ensconced President Yoon Suk-Yeol chose not to meet in person with Pelosi Thursday during her visit to the peninsula — opting for a phone call. Yoon did so after a late night out Wednesday at a Seoul theater followed by a dinner with actors. Yoon’s supporters frame it as a vacation, analysts are calling it a snub.

UKRAINE — WHO’S DELIVERING ON THEIR PROMISES? The U.S. has delivered more arms than anyone else in absolute terms, but only 38 percent of what it has promised. Poland and Latvia have perfect records, while Estonia and Norway are also above 90 percent, per the Kiel Institute for the World Economy. Countries near the bottom of the rankings include Greece, Spain and France.

U.K. — LATEST ON THE RACE TO REPLACE BORIS: Voting opened this week among Conservative Party members to decide who will replace Boris Johnson as party leader and therefore U.K. Prime Minister. Liz Truss is only five percentage points ahead of Rishi Sunak, new private polling suggests. That is significantly less than the roughly 20-point lead she was thought to have ahead of voting. Voting closes Sept. 4.

Who are the Conservative Party members deciding Britain's next P.M.? Seven in 10 are men, and 6 in 10 are over 55. Three in 4 voted to leave the EU, and 97 percent are white.

YEMEN — CEASEFIRE EXTENDED FOR ANOTHER TWO MONTHS: ​​The U.N.-mediated truce between Houthi rebels and the Saudi-backed coalition has held up for four months already. That’s improved the humanitarian situation, more than halving the number of civilian casualties in the conflict, to under 100 per month.

ECONOMY — IT’S LOOKING MESSY IN EUROPE: 

U.K.: The Bank of England is predicting inflation will hit a whopping 13 percent in 2022 (up from 9.4 percent today) and warning of a looming recession. The poorest 20 percent of the U.K. population are facing the highest rate of inflation, and are among the most badly affected of all groups in the OECD.

Germany: Watch out for a 2009-level recession if Russia completely cuts off natural gas supply. Germany is at least on track to have its gas reserves 80 percent full by winter (the goal is 90 percent).

Winter planning: To save energy, the city of Hannover is ready to switch off hot water and shut down fountains. Berlin will stop lighting up 200 tourist sites, and in Munich it will be illegal to heat buildings beyond 19 degrees (68 degrees).

The nuclear option: Germany could safely keep open, or reopen, three recently closed nuclear power plants. It’s keeping them closed for political reasons, not safety reasons.

DEBATE — SPAIN’S NEW AC RULES: Spain’s government announced it would ban certain venues from setting air conditioning below 27°C (80°F) — including all public and commercial buildings such as bars, cinemas, theaters, airports and train stations. The decree will also stop heating from being raised above 19°C (66°F) during the winter.

Households are not required to follow these rules, but the government “recommends” that they do so. What do you think? Let me know: [email protected]

WHAT’S THE EXCHANGE RATE FOR AN MBS FIST BUMP? After President Joe Biden’s full-court press in the Middle East last month, OPEC+ ministers agreed to raise their oil output by only 100,000 barrels a day, a tiny 0.1 percent of global demand. Guess that’s the going rate for a fist bump rather than a handshake.

BY THE NUMBERS — FOSSIL FUELS 

OIL MAJORS RAKING IN CASH: Oil majors BP, Chevron, Exxon, Total and Shell reported combined record profits of $59 billion in Q2 2022, despite output being lower than in 2019. The companies typically doubled or tripled their profits.

RUSSIAN COMPANIES NOW LOSING REVENUE: After riding the wave of massively spiking energy prices around the invasion of Ukraine, Russian energy companies and the Russian state are now feeling the pinch. Prices are down and tax revenues are plummeting (partly due to Moscow’s decision to cut gas flows to Europe).

INNOVATING OUR WAY TO CLIMATE PROTECTION: Amazon’s emissions keep growing (by 18 percent in 2021), despite the company’s commitment to be carbon neutral by 2040. That’s because the company growth rate (21 percent) far outstrips its carbon efficiency gains (around 2 percent).

Context: Microsoft’s emissions jumped 21.5 percent in 2020-21.

Overall point: While companies such as Amazon can point to real achievements — ”last year, we reached 85 percent renewable energy across our business” — it’s going to take some other form of innovation to actually get to net zero.

INDIA: New Delhi has upgraded its carbon intensity goals — the government will now work to cut emissions intensity by 45 percent by 2030 (up from 35 percent), and aims for 50 percent of energy from non-fossil fuel sources by 2030 (up from 40 percent). The country’s 2070 net-zero target remains in place.

CHINA: The China Renewable Energy Engineering Institute estimates China will increase its solar and wind installations by 25 percent in 2022, keeping the country on track for its 2030 1,200GW clean power goal. 

WATCH FOR: Mexico, Indonesia, Argentina and Turkey to update their targets in coming weeks. h/t COP watcher Ed King

EGYPTIAN HOSPITALITY: The COP27 hosts confirmed a “World Leaders Summit” on Nov. 7-8, at the beginning of the two-week COP meeting. Don’t hold your breath: We’re unlikely to see Xi Jinping, Vladimir Putin and Biden taking strolls around the Red Sea together — but you can expect fights about the role of natural gas in the global energy mix.

FOOD SECURITY — LACK OF RAIN IN INDIA POSES NEW THREAT: India’s total rice planted area is down 13 percent this season due to a lack of rainfall, including West Bengal and Uttar Pradesh, which account for a quarter of the output.

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

TAIWAN FEEDBACK — WHAT DID PELOSI GET RIGHT, AND WRONG

“A thousand international org employees, myself included, would like to share your excellent thread but can’t for obvious reasons.” — Anonymous, global NGO 

“The next few days will certainly be a little tense. But Speaker Pelosi made two very important points with her trip. She refused to let the Chinese Communist Party change the United States’ relationship with Taiwan, and she correctly judged that letting the CCP set the rules of U.S. foreign policy would be a downward spiral towards disaster. It’s sad that the White House failed this test and caved to the CCP’s bullying, because when the United States stands with our allies in the face of tyrants, we project strength — when we fail to do so, their aggression and militarism continues.” — Rep. Michael McCaul (R-Texas)

“I have been to the PRC 35 times over 10 years as Chairman of two investment funds, meeting with dozens of senior business and political leaders. Over dinner we often talked about politics and the economy. Based on my experience, Nancy Pelosi did exactly the right thing in handling her trip. Against gross incompetence and confusion in our Administration, which is causing global misery and has lost significant "face" in Asia, she stood up to the PRC.” — Anonymous, managing partner at a tech investment firm

“It's the Pacific, stupid! What is at stake for the U.S. is not Taiwan, but the Pacific. Everyone's interest is best served by maintaining the status quo, which rests on two conditions: no use of force against Taiwan from mainland's China; and One China policy by the U.S.” — Stefano Stefanini, former Italian NATO ambassador

“Taiwan is an excellent case study on how a democratic society can engage with the PRC while protecting its sovereignty, good governance, democracy, and human rights. Being pro-Taiwan is not the same as being anti-China. For the United States and its allies, one thing is clear: our chances of prevailing in this era-defining ideological contest with the Chinese Communist Party will largely depend on the ability to achieve unity of purpose within the democratic camp. We cannot do this if we leave potential partners like Taiwan out in the cold.” — Dan Twining, International Republican Institute (more from Twining and IRI’s Taipei-based advisor, J. Michael Cole)

“The fear-mongering and partisan headlines around Pelosi's visit to Taiwan are infuriating. Stop letting brutal dictatorships like China set the agenda with bluffs and violence. Unite democracies and let dictators be afraid instead.” — Garry Kasparov 

“On how the West absorbs Chinese framing of issues: “When ill-informed foreign officials join ill-defined PRC-led projects, those officials often incorporate the vague phrases fed to them by their Chinese counterparts, without fully comprehending their meanings, into their own vocabularies to maintain good relations … The "human community of shared destiny" is a good example of a flexible concept that could mean almost anything. The ungraspable term has increasingly found its way into international documents, including those of UN agencies.” — Martin Hála in Journal of Democracy

UNITED STATES — HAWLEY’S MAGA TURN AGAINST NATO: The U.S. Senate Foreign Relations Committee on Wednesday voted to ratify Finland and Sweden as members of the North Atlantic Treaty Organization (NATO). The vote on the Senate floor was 95-1.

GOP Sen. Josh Hawley (Mo.) voted "no," while GOP Sen. Rand Paul (Ky.) voted “present.” Hawley’s move puts him at odds with fellow GOP senators considered possible 2024 presidential contenders, as party leaders work feverishly to stamp out Trump’s influence on foreign policy within their ranks.

Sens. Jeanne Shaheen (D-N.H.) and Thom Tillis (R-N.C.), co-chairs of the Senate NATO Observer Group, called the vote “an unmistakable message to both our allies and adversaries that our transatlantic bonds are stronger than any threat that seeks to break them,” in a statement.

APPOINTED: Shani Spivak is now director for emerging technology and secure digital innovation at the National Security Council, joining from the FBI. h/t Daniel Lippman

META’S SILICON VALLEY EXODUS: Meta’s No. 2 executive Nick Clegg, is swapping Silicon Valley for London. Adam Mosseri, the head of Instagram is joining him, and Alex Schultz, Meta’s chief marketing officer, is already there. Other top execs have moved to New York and Israel.

SENTINEL-1B DECLARED DEAD: One of the EU’s critical satellites for monitoring climate change using cloud piercing radar sensors has developed a permanent malfunction. Images from Canada’s Radarsat-2 and Radarsat Constellation Mission, Germany’s TerraSAR-X, Italy’s COSMO-SkyMed and Spain’s PAZ will be used to monitor sea ice movements for researchers.

REINVENTING THE METRO MAP … FOR PEDESTRIANS: The Spanish city of Pontevedra has developed a rather ingenious pedestrian map — the Metrominuto map demystifies how long it’ll take to get from one point of the city to another on foot, and is available in app form. Similar maps have since been crafted for cities like Modena, Italy and even car-obsessed Brussels.

PODCAST — Expanding Antimonopoly Thinking, to Pursue Social, Racial and Economic Justice. U.S. antitrust enforcer Lina Khan unfurls her thinking.

PODCAST: The Audit, looks at U.S.-Pakistan relations.

Thanks to editor Ben Pauker, Phelim Kine, Stuart Lau, Aitor Hernandez and producer Mallory Culhane. 

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