11th November 2011
While we battle the financial crisis, the growth of the greenhouse gases that causes global warming continues unchecked – and this is set to wreak havoc on emerging economies; seen as the pillars of investors' search for wealth during the western world's economic turmoil.
For example, there is an explosive and seemingly unstoppable growth in emissions from China, which leapt by 9.3 per cent last year to 8.15 billion tons of CO2, according to figures for 2010 from the US Department of Energy, reports the Independent.
The Chinese have firmly taken over from the US as the world's biggest polluter
Alongside this trend, India, the world's third-biggest emitter, is increasing its carbon pollution. It has reached 2.06 billion tons, which is 6.1 per cent of world emissions. But its increase over the year was 9.4 per cent – the highest rise from any country. And there are no plans to bring CO2 down.
Confusion among climate sceptics
These emissions continue to soar, prompting some to argue against anyone who thinks that climate change is no longer "an issue".
The application of scientific data and information, some say, has been distorted by the media and misinterpreted to benefit people's own stance on the subject. Sceptics may claim that global warming has "stopped" – but this is focusing on "short-term noise".
The Skeptical Science blog says: "Right now we're in the midst of a period where most short-term effects are acting in the cooling direction, dampening global warming. Many climate "skeptics" are trying to capitalize on this dampening, trying to argue that this time global warming has stopped, even though it didn't stop after the global warming "pauses"…
"…And while the global warming trend spans many decades, the longest cooling trend over this period is 10 years, which proves that each was caused by short-term noise dampening the long-term trend.
"In short, those arguing that global warming has stopped are missing the forest for the trees, focusing on short-term noise while ignoring the long-term global warming signal. Since the release of the BEST data which confirmed the global warming observed by all other global temperature measurements, climate "skeptics" have been scrambling for a way to continue denying that global warming is a problem, and focusing on the short-term noise has become their preferred go-to excuse."
So what does this mean for investors?
Given the combination of data and historical trend, the outlook for emerging economies appears bleak. Global warming threatens to have a detrimental effect on these markets, with the Stern report backing this up.
Some of the key points from the report include that all countries will be affected by climate change, but the poorest countries will suffer earliest and most. Average temperatures could rise by 5C from pre-industrial levels if climate change goes unchecked.
Alongside this, warming of 3 or 4C will result in many millions more people being flooded, and by the middle of the century 200 million may be permanently displaced due to rising sea levels, heavier floods and drought.
The poorest countries such as Thailand and India, for example, are also disproportionately at risk from climate-change-driven disasters such as flooding and storms, says the Guardian, as well as air and water pollution.
So while emerging economies have surged ahead in recent years, remaining tipped for investment success – but a series of problems could derail this growth. Could the threat of climate change dampen or even destroy investor portfolios – and might it even wipe these economies out?
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