Global Warming Exceeds 1.5C
Thought for Thursday, climate service research shows global warming exceed 1.5C, Green Prosperity Plan rolled back by Labour, and all time highs for the S&P 500.
Thought for Thursday
“The first panacea for a mismanaged nation is inflation, the second is war. Both bring temporary prosperity; both bring permanent ruin. But both are the refuge of political and economic opportunists.” Ernest Hemingway
Global Warming Exceeds 1.5C
Research from the EU’s climate service has shown that global warming has, for the first time, exceeded 1.5C over the course of a year. Here, the Copernicus Climate Change Service identified that between February 2023 and January 2024, global warming reached 1.52C.
This comes against the target laid out during the Paris COP21 conference in 2015 which saw leaders around the world pledge to keep global warming within a 1.5C threshold of preindustrial levels. While the data does not technically break the Paris Agreement (given that this looks at longer-term averages), it is indicative of the impact of global warming and that keeping to the Paris Agreement will present itself as a significant challenge.
Last year US researchers at the National Centres for Environmental Prediction identified Monday 3 July as the hottest day on earth since records began at the end of the 1800s. Here,
with the global average temperature exceeding 17.1 degrees Celsius, scientists cited the impact of greenhouse gas emissions and El Niño.
Last month was also identified as the eighth hottest January in a row, with the Copernicus Climate Change Service stating that it was 1.66°C warmer than an estimate of the January average for 1850-1900 (which serves as the designated pre-industrial reference point). Hence, attention now turns to how 2024 will pan out and whether firms, governments, the international community, and other organisations will be able to keep to their pledges and direct sufficient resources to help confront the challenge of global warming.
Labour Roll Back Green Prosperity Plan
Most call their timing into question, when it was confirmed by Labour sources yesterday that they’re rolling back on their £28bn a year Green Prosperity Plan. Though the official announcement comes today, with the news being widely reported yesterday Sir Keir will be hoping that Rishi Sunak’s insulting performance in the Commons yesterday will have largely taken the heat out of the news, that we all knew was coming.
£28bn a year is a significant sum of money, but the cost to of transition is estimated to be close to one trillion pounds over the next 20 years, so it’s not as if this amount alone is going to make or break the move to a green economy. There would be plenty that could be done without significant government spending that would support private investment in the sector, particularly with the tens of billions of pounds in pension funds that will be crying out for long term, stable, inflation aligned returns – which energy investment would provide.
Perhaps the big lesson from this is for Rachel Reeves, who could have said a percentage of GDP, or tax revenue instead of an absolute number, and then could have avoided this whole situation!
S&P 500 Hits All Time Highs
Yesterday, the S&P 500 index hit all-time highs as it appreciated some 0.8% over the course of the session. This comes on the back end of a string of corporate earnings results which gave markets some room for cautious optimism. With some 2/3rds of company reports having been published, the results have on average surpassed expectations, though its not been without casualties. Elsewhere, the Dow Jones rose 0.4% as the Nasdaq closed around 1% higher as attention turns to the next string of earnings, as well as any further guidance from the Fed.
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