Our 2K19 Climate Change Progress
There are a lot of people in the world trying to power a lot of machinery, and in case you didn’t get the memo, we’re doing it wrong! Drilling and digging into the ground for oil and coal, and then burning the stuff to create energy, is creating more harmful gases than it’s worth. Carbon dioxide is getting trapped in our atmosphere. It’s wrecking our weather, and it’s skewing investors’ returns. Declaring us at “the point of no return” yesterday, United Nations (UN) secretary general Antonio Guterres stepped up at the COP25 summit to suggest that we “stop drilling and digging.” Easier said than done!
Innovation is moving at such a pace that no country dares be left behind. To African states, progress means more cars on the road. To China, progress means cheaply increasing production output with coal-fired power plants and mines. To Brazil, progress means clearing the Amazon to make way for more farmland.
When a forum of slowing Western economies tells its emerging market competition that it needs to uproot fixed assets, invest in renewable energy sources, and discard fossil-fuels that they themselves relied upon for economic growth twenty years earlier, it can easily rub the wrong way!
The global goal set for this year was to cap rising temperatures to 2 degrees Celsius. It’s a big deal to polar bears and investors alike, as achieving the goal would leave diversified, long-term investment returns unharmed by 2050, according to research by Mercer. So, how have we got on? According to the UN, not great. Global temperatures are on course to rise 3-5 degrees by the end of this century.
It’s not too late! Investors scanning the markets for alpha might find it in the much needed renewables sector. Ready-made ethical funds like SPDR’s S&P 500 Fossil Fuel index (SPYX) are tipped to double in value over the next ten years. However, this whole issue is a political hot potato. Someone, somewhere, must fall on their sword to save the world. The clock is ticking!