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.
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.
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!
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.
If you would like a PDF of this commentary, please contact us and we'll be in touch.Contact us
Find out how we have helped our clients meet their hedging requirements.
Thought for Thursday, House of Commons ceasefire vote decision, minutes released from Federal Reserve monetary policy meeting, geo-political update in Russia and Gaza, and looking at today's data.
Word of the week Wednesday, data indicates public sector net borrowing in surplus, this afternoons House of Commons vote for a ceasefire in Gaza, and release of FOMC policy me.eting minutes
Travel Tuesday, changes for China's property market, attacks on Red Sea Vessels cause further shipping disruption, EU defensive naval operation launched, and US propose a UN Security Council Resolution in the Middle East.
Macro Monday, update on Israel-Gaza conflict, town in Ukraine in full control of Russian forces, and pressure for creation of more public-private partnerships in the UK from insurers.
Friday Feeling, Labour take comfort in by-election results, potential for income tax cut plans to be dropped, president of European Commission speaks on European Union defence production.
Thought for Thursday, data released this morning shows UK in technical recession, Sunak's pledge for economic growth takes a blow, increasing number of MPs not looking for re-election for the Conservative party, and Labour party lead drops seven percentage points.
Word of the week Wednesday, hotter than expected US inflation, inflation data in the UK comes in double than BoE's target, US Senate agrees foreign aid package, and today's data.
Travel Tuesday, plight of US commercial real estate owners according to Bloomberg, data shows increase in UK wage growth, easing UK unemployment, and talks to revive negotiations in the Middle East.