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Global Letter – Tip of the iceberg

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The basic science has long been known: but the planet is warming faster than expected.

COVID-19 is a sharp reminder of humankind’s fragility and its linkages with the natural world. Headlines understandably focus on its devastating human and economic consequences. By contrast, climate change may appear as a somewhat distant and slow-moving emergency. But risks are escalating: and some of the most recent scientific evidence is distinctly worrying.

Recent developments

Cloud computing. While the basic physics of greenhouse gas warming has long been understood, 1 whereby a doubling of CO 2 e concentration (which has already happened) ultimately raises equilibrium temperature by around 3 0 C, the real world is more complicated than the laboratory. Some recent research suggests that a net effect of cloud formations that result from rising temperatures is to augment that temperature rise, quite possibly by a meaningful amount. 2

Arctic and Antarctic warming. Increasingly recognised as a bellwether for the rest of the planet, the Arctic continent is warming at least twice as fast as the rest of the world, and this year is set to be particularly hot. 3 Already in May there were reports of unusually warm weather, with temperatures in some parts of Siberia some 10 o C higher than the ‘normal’ May average. And June looks to have been even hotter. A new Arctic record temperature of 38 o C has supposedly been recorded in the Siberian town of Verkhoyansk, north of the Arctic Circle. Likewise, the South Pole is reported to have warmed three times faster than the global average over the past 30 years. 4

Two recent major casualties are harbingers of more to come:

  • Thawing of the permafrost appears to have contributed to the recent catastrophic fuel spill in Siberia. The supports of a tank anchored to the permafrost flexed and then fractured. Many Arctic pipelines are anchored similarly.
  • Smouldering wildfires – so-called ‘zombie fires’ – in the peatlands can burn under the snowpack and release carbon stored thousands of years ago. Siberia experienced some of its worst wildfires last summer: an area the size of Greece burned, and the temperatures recorded so far this spring/summer bode ill for the fire season ahead.

Lethal heatwaves. 5 The world has just experienced its warmest May on record, and 2020 is on course to be the warmest year since measurements began. Some countries appear particularly at risk – temperatures in parts of India soared to 50 o C in May. A recent government report warned that the average temperature in India is expected to rise by 4.4 o C, the frequency of summer heatwaves to rise 3-4 fold, and the duration of heatwaves to double by the end of the century. 6 Given that in India ‘heat-exposed’ activities employ some three-quarters of the labour force, and produce around half of national output, 7 the socio-economic consequences could be dire. Likewise in Europe, heatwaves are becoming more frequent and intense – temperatures rose to 46 o C in France last summer, costing more than 1,500 lives. 8

Severe storms. Floods and storms have been the most frequent climatic disasters to date, constituting about 80% of the total. 9 Recent research suggests that the changing climate is leading to tornados, hurricanes, and cyclones that are more frequent, intense, and slower-moving, and hence more damaging. 10 Scientists warn that this year’s US hurricane season may be particularly active and intense, owing to a warm Atlantic Ocean and current atmospheric conditions. 11


At last, the forthcoming (sixth) assessment by the United Nations Intergovernmental Panel on Climate Change (IPCC), due for release next year, is expected to include a 5 o C+ climate scenario. 12

The 1.5 to 2 0 C Paris target has long been unrealistic. An illustration: achieving it would require that this year’s COVID-19-induced rate of decline in greenhouse gas emissions be maintained, each and every year, for the next decade! 13 Patently, this will not happen.

Even a 3 o C target for 2100 probably represents an unwarrantedly low base case, unless it is believable that some radical new technology is invented and made operational.

Indeed, a 4 o C rise by 2100 is looking increasingly probable: and in our judgement, it would be derelict for investors to work with any lower path when evaluating the outlook for asset prices.

As regards stress testing, this should in our judgement now be done against a path that leads to the global average temperature being 5 o C higher by the turn of the century.


  1. Eunice Newton Foote, a scientist and women's rights campaigner from New York, is now acknowledged as being the first person to discover, in 1856, that altering the proportion of carbon dioxide (then called carbonic acid gas) in the atmosphere would change its temperature.
  2. On average, these sensitivities are nearly 0.6°C higher than the average predictions from the previous generation of models (i.e., CMIP5). For more, see Shultz, D., 2020. Why Is Climate More Sensitive in the Latest Earth System Models? [online] Available at: https://eos.org/research-spotlights/why-is-climate-more-sensitive-in-the-latest-earth-system-models [Accessed: 15 June 2020]
  3. On its current trajectory, the Arctic is expected to be some 6 o C warmer by 2050. Woods Hole Research Webinar Series, May 2020. Available at: https://whrc.org/webinar-series/ [Accessed: 6 May 2020].
  4. Dunne, D., 2020. South pole warmed ‘three times faster’ than global average over past 30 years. Carbon Brief [online]. Available at: https://www.carbonbrief.org/south-pole-warmed-three-times-faster-than-global-average-over-past-thirtyyears?utm_campaign=Carbon%20Brief%20Daily%20Briefing&utm_medium=email&utm_source=Revue%20newsletter [Accessed: 1 July 2020]
  5. Lethal heat waves are defined as three-day events during which average daily maximum wet-bulb temperature could exceed the survivability threshold (~35 o C) for a healthy human being resting in the shade.
  6. Pakrasi, S., 2020. Temperature over India likely to rise by over 4 degrees Celsius by end of 21st century: Govt report, [online]. Available at: https://www.hindustantimes.com/india-news/temperature-over-india-likely-to-rise-by-over-4degress-celsius-by-end-of-21st-century-govt-report/storyZsXcDjcYv7DiHWG7F8egGO.html?utm_campaign=Carbon%20Brief%20Daily%20Briefing&utm_medium=email&utm_source=Revue%20newsletter [Accessed: 16 June 2020]
  7. McKinsey Global Institute, 2020. Climate risk and response: Physical hazards and socioeconomic impacts, [online]. Available at: https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Sustainability/Our%20Insights/Climate%20risk%20and%20response%20Physical%20hazards%20and%20socioeconomic%20impacts/MGI-Climate-risk-and-responseFull-report-vF.ashx [Accessed: 20 May 2020]
  8. This estimate comes from French Health Minister Agnes Buzyn, as reported by Agence France Presse and the Guardian (2019). Summer heatwaves in France killed 1,500, says health minister. 8 September. Available at https://www.theguardian.com/world/2019/sep/09/summer-heatwaves-in-france-killed-1500-says-health-minister [Accessed 2 July 2020]
  9. IMF, 2020. Global Financial Stability Report, April. Chapter 5: Climate Change: Physical Risk and Equity Prices, [online]. Available at https://www.imf.org/en/Publications/GFSR/Issues/2020/04/14/global-financial-stability-report-april2020#Chapter5 [Accessed: 3 June 2020]
  10. Frequency: The frequency of severe hurricanes in the Atlantic Ocean, for instance, has roughly doubled over the past two decades. Growing in intensity: Hurricanes, typhoons, and cyclones are growing stronger in every region of the world because of climate change, new research suggests. Speed: It has been shown that hurricanes are moving more slowly across land due to changes in Earth’s climate. This has resulted in greater flood risks as storms hover over cities and other areas, often for extended periods of time. For more, see Blakely, R., 2020. Storms growing stronger due to global warming, study confirms. The Times, [online]. Available at: https://www.thetimes.co.uk/article/storms-growing-stronger-due-to-global-warming-study-confirms-0tc39b069 [Accessed: 1 June 2020]
  11. Bruggers, J. and Green, A., 2020. Hurricane Season Collides With Coronavirus, as Communities Plan For Dual Emergencies. Inside Climate News, [online]. Available at: https://insideclimatenews.org/news/29052020/hurricanecoronavirus-floridaevacuationplans?utm_campaign=Carbon%20Brief%20Daily%20Briefing&utm_medium=email&utm_source=Revue%20newsletter [Accessed: 3 June 2020]
  12. Watts, J., 2020. Climate worst-case scenarios may not go far enough, cloud data shows. The Guardian, [online]. Available at: https://www.theguardian.com/environment/2020/jun/13/climate-worst-case-scenarios-clouds-scientists-globalheating [Accessed 14 June 2020]
  13. United Nations Environment Programme, 2019. Cut global emissions by 7.6 percent every year for next decade to meet 1.5°C Paris target – UN report, [online] Available at: https://www.unenvironment.org/news-and-stories/press-release/cut-global-emissions-76-percent-every-year-next-decade-meet-15degc [Accessed 24 June 2020]
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Global Letter – Tip of the iceberg

The basic science has long been known: but the planet is warming faster than expected. COVID-19 is a sharp reminder of humankind’s fragility and