Russia’s major heat wave – the worst in over 130 years – is the latest example of extreme weather having a significant economic impact on the global agriculture sector.  Droughts and forest fires have caused a wheat crop crisis in Russia, raising global prices by nearly 70% and promptin President Vladimir Putin to ban wheat exports entirely.

Similar scenarios are playing out elsewhere in the world.  Droughts in Kansas, for instance, have killed off over 2,000 cattle and flooding in Pakistan has destroyed thousands of acres of crops.

“Over the whole globe all these changes in climate… are going to cause some real ripples in our capabilities of producing food,” warned Jerry Hatfield, laboratory director at the U.S. Department of Agriculture’s Agriculture Research Service.

Analysts at HSBC warn that if countries cannot not adapt to higher temperatures and more extreme weather, grain production in G20 countries may fall 8.7% by 2020.  With population growth taken into account, HSBC predicts G20 per capita grain production could drop between 11.9% and 16.1% by 2020.

Reduced output could “create havoc” in agricultural markets around the world, driving up the price of food and other essential goods.  There is grave concern that price spikes could result in unrest in many poor or resource-scarce countries similar to the riots that took place during 2007-2008, when global food prices spiked based on rampant market speculation.

Watch video of air pollution from Russian fires – released by NASA

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According to the BP Statistical Review of World Energy, global emissions of CO2 and other greenhouse gas emissions decreased for the first time since 1998, dropping 1.1% to 31.13 billion tons after 2008′s peak of 31.55 billion tons.

However, despite this overall reduction, China’s greenhouse gas emissions have grown sharply as the nation rapidly industrializes and continues to construct new coal-fired power plants.  China is now the world’s leading emitter, having overtaken the United States in 2008.  This past year, China ‘s fossil fuel combustion released 7.5 billion tons of CO2 into the atmosphere.

China is not the only developing nation whose emissions have grown sharply.  India also saw an increase of 7%, and it has now overtaken Russia as the world’s third largest emitter.  In aggregate, the developing world now accounts for half of all global emissions.

United States emissions, on the other hand, fell by 6.5% to 5.9 billion tons in 2009, the lowest level since 1995.  However, “although the share of emerging markets is growing, the industrialized countries remain the preponderant source of historical greenhouse gases,” reminds Nick Robins, head of HSBC’s Climate Change Center of Excellence.

The United States and China, as well as the world’s other top emitters, now find themselves under tremendous pressure to either extend the Kyoto Protocol or formulate a successor to the climate treaty, which is set to expire in 2012.  Nations are also attempting to come up with domestic emissions reductions plans of their own.  “In terms of future emissions targets, China is ahead of the U.S. because it has set itself commitments to reduce carbon intensity, while the U.S. is struggling to get climate legislation through Congress,” remarks Robins.

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Turkey and Russia signed agreements on Wednesday for the construction of Turkey’s first nuclear power plant and the development of a pipeline project to carry Russian oil from the Black Sea, through Turkey to the Mediterranean.

Turkey, a U.S. ally, served as NATO’s foremost base during the Cold War, but its relations with Moscow have rapidly developed since the fall of the Soviet Union. Both countries have vowed to triple their bilateral trade volume to around $100 billion in the next five years.

The power plant construction, near Turkey’s Mediterranean coastal town of Akkuyu, is expected to take seven years, said Turkey’s Prime Minister Recep Tayyip Erdogan, who oversaw the signing with visiting Russian President Dmitry Medvedev.

The two leaders also signed an agreement to work on a pipeline project that would pump Russian oil from the Black Sea port of Samsun in northern Turkey to the Ceyhan oil terminal on the Mediterranean in southern Turkey, where an oil refinery would be set up. From there, the oil would be shipped to Europe.

The goal of the project is to bypass Turkey’s Bosporus strait to alleviate the congested oil tanker traffic through the narrow waterway that bisects Istanbul en route from the Black Sea to the Mediterranean.

Russia’s gas exports have made it the second largest trading partner of Turkey. Both sides have recently been working to improve their diplomatic relations and trade ties.

“By taking these steps, Turkey is taking its position as an energy hub to a much different level,” Erdogan said. “The solidarity with Russia on this issue is of utmost importance.”

On Wednesday, Turkey and Russia also agreed to mutually lift entry visa requirements for visits of up to 30 days in an effort to boost tourism and business. About 3 million Russian tourists visit Turkey annually.

“It is a historical agreement that will before anything else ease the life of millions of people,” Medvedev said.