Southwest Iceland is bracing for a volcanic eruption following thousands of earthquakes that have split houses apart and caused large sinkholes to form across the local landscape.
Officials in the country declared a state of emergency and on Tuesday urged 3,000 residents of the small fishing town of Grindavik to evacuate amid signs that “magma is moving closer to the surface,” CNN reported.
What’s Happening: Scientists said on Monday that “the greatest area of magma upwelling” is in an area 3.5 kilometers (two miles) northeast of the coastal town, according to the outlet. Local officials are also concerned about a geothermal power plant that’s about six kilometers (four miles) away from Grindavík and plan to construct a safeguarding trench around the plant, which provides electricity and geothermal water to heat the homes of 30,000 people who live in the Reykjanes peninsula, said CNN.
Iceland’s Civil Protection Agency said on Friday that the country’s 360,000 residents are facing an event that they “have not experienced before, at least not since the eruption in Vestmannaeyjar,” -a volcanic eruption that took place without warning in 1973, according to the publication.
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The Potential Effects: Although expert opinions vary on how devastating the effects of a potential eruption could be, they agree that it will depend on whether an eruption takes place on land or under water or ice. In 2010, an eruption at Eyjafjallajökull near or under glacial ice caused a plume of smoke that disrupted air travel in several European countries and cost the airline industry $200 million in daily revenues.
Despite the unknowns, Grindavik appears to be facing a high level of danger. “The evacuated town of Grindavík is very close to the position of the new fracture, and its survival is far from assured,” Bill McGuire, Professor Emeritus of Geophysical & Climate Hazards at University College London said in a statement, according to CNN. “Everything depends upon where magma eventually reaches the surface, but the situation doesn’t look good for the residents of the town.”
The Investment Perspective: With climate change escalating the occurrence of natural disasters in both frequency and severity, traders are looking for investment opportunities in companies involved in helping to mitigate damage. Multiple companies based in the U.S. and abroad have areas of their business focused on preparing for, monitoring, researching and preventing natural disasters and/or on aiding governments and communities in the wake of these events.
Procure has created two funds that hold companies involved in various stages of monitoring, mitigating and responding to natural disasters.
The Funds: The Procure Space ETF UFO tracks companies involved in the space sector, which has become pivotal in forecasting, monitoring and evaluating disasters. Satellite imagery, radar technology in satellites and thermal technology are all used to monitor the world’s geology and environment.
The Procure Disaster Recovery Strategy ETF FIXT tracks a collection of companies involved in the recovery process from natural disasters like hurricanes, wildfires, floods, or earthquakes.
The funds each hold several stocks popular with retail traders, which can offer a diversified approach to investing in a single stock. For example, Virgin Galactic Holdings, Inc SPCE is weighted at 4.78% within the UFO ETF and Nvidia Corporation NVDA is weighted at 2.22% within the FIXT fund.
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