A recent article in Bloomberg titled The Market’s Next Black Swan Is Climate Change, by Mark Gongloff, says “Failing to do more to slow the planetary heating caused by greenhouse-gas emissions will gouge 40% from global stock valuations.”
The article rife with multiple false claims and unverifiable predictions. Here is what the article claims:
Climate change will be really, really bad for stock prices.
Failing to do more to slow the planetary heating caused by greenhouse-gas emissions will gouge 40% from global equity valuations, estimates a new study by the EDHEC-Risk Climate Impact Institute. Accounting for climate-change-accelerating “tipping points” such as Amazon-rainforest dieback or a Big Burp of gas from melting permafrost, the market losses rise to 50%. On the other hand, if the world gets its act together and limits warming to 2 degrees Celsius above preindustrial averages, then the hit to stock prices will be just 5% to 10%.
First, what is a “black swan” event?
A black swan event is an unexpected, rare, and consequential event that has a major impact and is difficult to prepare for. The term is based on a Latin expression that assumed black swans didn’t exist. The term was popularized by Nassim Nicholas Taleb, an economist, professor, and writer.
The article assumes that climate change is such an event.
The ”really, really bad” portion of the article is more of an emotional reaction from a stock trader than a real quantification. Of course, it has been shown that stock trading is mostly emotional to begin with, according to Investopedia:
- Trading psychology is the emotional component of an investor’s decision-making process, which may help explain why some decisions appear more rational than others.
- Trading psychology is characterized primarily by the influence of both greed and fear.
Given that, it is easy to understand how the article and the study it references can easily be attributed to the fear component of stock trading.
And in the article, fear is used as the impetus:
And like objects in your rearview mirror, climate-change damage is already closer than it appears. Weather disasters cost the global economy $1.5 trillion in the 2010s, according to the World Meteorological Organization, up nearly tenfold from the 1970s after adjusting for inflation. The reinsurer Swiss Re has suggested insured losses from natural catastrophes will double in the next decade.
But the fear is based on climate model projections, not actual data. If actual data was used to look ahead, using several metrics, the trend would be for less weather (not climate) damage in the future. For example, hurricanes. The data shows no trend:
Or tornadoes, not only is there no increasing trend, the trend is actually negative:
Likewise, heatwaves. They were much worse in the past:
In fact, the metric combining many severe weather events, the data showing deaths from extreme weather, is sharply down over the last century.
While Bloomberg likes to blame climate, for extreme weather events, extreme weather events are just that, weather events. Such events are often conflated with climate change but this is a mistake. Weather and climate operate on vastly different timescales
Many real world data sets show that there has been no increase in drought, or heatwaves; no increase in flooding; no increase in tropical cyclones and hurricanes; no increase in winter storms; and no increase in thunderstorms or tornadoes, or associated hail, lightning, and extreme winds from thunderstorms.
From an investor’s perspective, it’s all about money. The biggest thing about extreme weather events is that they destroy property, but even the trend in property losses has declined as the Earth has modestly warmed:
Investors often focus on the “bottom line” to the exclusion of all else. In this case, the bottom line is that there is no evidence the future will be more dangerous, deadly, or destructive. The ability (or lack thereof) to predict the stock market is about as inaccurate as the output of computer models used to predict climate.
“It’s tough to make predictions, especially about the future,” the baseball player Yogi Berra is reported to have said. The truth of this is evident every day in the world of the stock market.
In the end, since climate change is not causing increasingly extreme weather, it cannot be causing increasing business losses – which the data shows it is not. My advice to investors? Follow the data, not the money, and suggest Mark Gongloff of Bloomberg take a “chill pill.”
Anthony Watts is a senior fellow for environment and climate at The Heartland Institute. Watts has been in the weather business both in front of, and behind the camera as an on-air television meteorologist since 1978, and currently does daily radio forecasts. He has created weather graphics presentation systems for television, specialized weather instrumentation, as well as co-authored peer-reviewed papers on climate issues. He operates the most viewed website in the world on climate, the award-winning website wattsupwiththat.com.
Is there anything bad that AGW doesn’t cause? Speak up, they’ll find a way to incorporate that as well into the narrative.
The new Great Satan- cause of ALL problems.
Zilch. Zero. Zip. There’s nothing AGW doesn’t cause.
Poker game sucks lately? AGW. Girlfriend ran off with some rich creep who drives a fancy sports car? AGW. Iron poor blood? Dental problems? Not sure if Jesus still loves you? AGW.
Rains on a picnic? What could be more obvious? Everyone KNOWS the answer.
The next black swan event will be when the world realizes the giant sink hole of corruption called the DC beltway has left the USA completely broke and with nothing working any more.
Education System is in shambles
Military is gold plated fiasco
Medical system broke
The justice system only protects those in side the beltway
Manufacturing base disappering
Most of world understands and will not buy debt
Where is a state led corruption investigation of everything DC
You’re asking the fox to see if anything is amiss in the henhouse. Good luck!
Fortunately, there is one person who we know is not part of the Washington DC Swamp, and that person is Donald Trump.
And if Trump is elected president, the DC Swamp is going to be in trouble. He owes them nothing, and they have shown him just how dangerous they can be to individuals and to the Rule of Law.
Stocks in companies producing “innovative” green products and services are not doing so well and will likely sink further.
probably 40% 🙂
A brand new media company called “Quacks Producing Claptrap” had an IPO last year at $20/share. The stock price jumped to $80/share within two days, then began a steady decline. Yesterday it closed at 30¢/share. The cause? Climate change — OBVIOUSLY!
It won’t be climate change, but the insane pursuit of Net Zero to address climate change that will devastate markets and standards of living.
Energy is a significant cost component in virtually every good and service in the economy. In addition, many industries cannot function with unpredictable availability of energy. Short disruptions can lead to major supply chain issues.
The next Black Swan event is likely to be a Net Zero Black(-out) Swan.
Well said. Even if we accept the climate emergency, why not just rely on the market to find a plausible solution that doesn’t hinder economic well being? Any company or organization that either single handedly or as part of a broader collaborative effort successfully addresses a major environmental issue would experience a dramatic increase in its stock prices and market valuation. There is no doubt the incentive is out there.
“ the insane pursuit of Net Zero…” which is caused by “climate change”
The black swan event may not be in this country. Germany and Australia are teetering on the edge. for a massive blackout. Then maybe it will become more obvious?
But I have some doubts. The reaction to the Texas power Crisis in 2021 comes to mind. Many folks refused to accept the role of the “renewables.”
Notice it says “will gouge” rather than “might gouge”. To make it seem to be a definite future is outrageous. And of course, they don’t know for sure that the heating is due to human caused emissions. Also, “failing to do more”????? How much more? Do they mean failing to get to net zero nirvana? At least the article admits the author is an “opinion editor”. When a story is about science- they should have a scientist write it- who might have a sense that his/her professionalism at stake.
I was too old when I learned that content providers were only needed because their product supported selling ads. The authors filled enough space with culturally suitable words to sell someone wrinkle minimizer, so good for them. They who selected the words knew they would say nothing.
Can something that takes 30 years to measure be called an event in the stock market?
Models that are doing pretty well, despite what you may read here.
Rusty,
Your death cult is proposing to drive us all to an early grave, freezing in the dark, hungry.
Over what? Less than 2° of milder weather? Over the next 75 years?
I am confident that if you were to enter a series of temperature-controlled rooms in random order, say 21.5°, 20.0°, 22.0°, 21.0°, 22.5°, you would not be able to perceive which ones were warmer or cooler.
There is NO CLIMATE EMERGENCY!
Just pointing out that the models are very reliable, so far.
Whether or not that is an emergency, who knows?
But the models are skilful.
You know that is complete RUBBISH, so why say it. ! !
Stop making a monumental FOOL of yourself,
Models are basically JUNK SCIENCE.
They do not even remotely represent REALITY.
The massively tainted urban data manipulated to match the 3 chimp’s doodling is JUNK and FAKE.
IPCC AR6, WG1, pg 1008
Everybody still has to live and work in heated buildings, use heated transportation and wear warm clothes, outside of the Tropics, most of the year.
An 18 months sample is enough for you to determine that they are “doing quite well?”
Data from Jan 2000 to Oct 2001? @TheFinalNail please provide a description of where the chart comes from. Is it a forecast or a hindcast?
Actually, because of the meaningless garbage on the horizontal axis…
… we have no idea what period it is meant to represent.
This links well to the meaningless garbage of the temperature data used.
The forecast period for CMIP3 is 2004, I think.
So about 20 years, not 18 months.
No, you DO NOT think.
So you are totally clueless and strive very hard to remain that way.
The models have it backwards. CO2 increases follow warming. The Sun causes warming and heats the oceans which can hold heat for 100+ years and that heats the air. The solar output has been the highest over the last 100 years of any 100 year period in the last 400 years.
https://lasp.colorado.edu/lisird/data/historical_tsi
The IPCC models don’t include the variability of the Sun which supplies 99+ of the heat, the clouds which can reflect up to 30% of the Suns energy back into space, or the oceans currents which can store up heat for long periods..
When the oceans, that hold 60-70 times the CO2 in the air, warm that reduces the amount of CO2 they can hold and that makes the CO2 in the atmosphere increase. Like a warmed soda pop.
Humans reduced their output of CO2 by 6 percent in 2020 due to COVID-19 and CO2 kept going up at the same rate.
‘Temporary reduction in daily global CO2 emissions during the COVID-19 forced confinement’https://www.nature.com/articles/s41558-020-0797-x
Human reduction of CO2 didn’t make a bit of difference in the rate of CO2 increases..
Deny the fake emergency not sound science.
Yes, of course CO2 outgasses from warmer ocean water and CO2 almost always lags temperature going back millions of years. But you can’t overcome the basic arithmetic of the mass balance that shows that we have put about twice as much CO2 into the air as was necessary to increase atmospheric CO2 concentration as much as it has increased. This means that nature has been a large net sink of CO2. It cannot simultaneously be responsible for the observed increase in concentration.
It’s a losing argument to claim that CO2 increases have been due to nature and it’s also a bad approach to tacitly accept that a) rising CO2 has been the sole cause of observed warming; and b) that this increase in CO2 and slight warming have in any way been anything but beneficial.
Don’t get caught up arguing the wrong points. The main thing is that the slightly milder temperature is in no way harmful so there is no excuse for destroying our way of life.
THERE IS NO CLIMATE EMERGENCY!
“It’s a losing argument to claim that CO2 increases have been due to nature”
The rate of increase of CO2 follows the ocean atmospheric temperature very closely.
You get a spike in the rate of increase at El Nino events, and even a step up in rate of increase after each major El Nino, just like the atmospheric temperature data.
Human CO2 emissions are a small fraction of the natural CO2 cycle, and do not even register on the “rate of increase” graph
Junk urban surface data, massively manipulated to match the models.
Zero possibility that it represents the mythical “global temperature”.
But you are well aware of that, aren’t you, fungal infection.
And of course the obligatory meaningless horizontal axis.
You should be highly embarrassed to present such garbage.
You have to wonder what went OH SO WRONG when they hired the next two chimps.
In the absence of empirical evidence that AGW is a reality, we are left with the fact that climate and weather change and that humans have learned to adapt to such changes. As far as I know, the effect of these factors – climate, weather and adaptation – individually has not been established but as the data shows we have learned to successfully cope. This should be comforting to rational folks.
Adaptation is what humans are good at. However, more and more cities are ignoring infrastructure (on purpose I believe) so that weather events cause more damage that the activist governments can point at and go, “see! It’s climate change! If we don’t put more money into (useless) green energy, we will be doomed!”
They literally just make
shitstuffthings up. It’s based on unproven, improbable climate models and an egregious misunderstanding of previous warm periods. It’s all hype with little basis in reality.We know it’s been warmer in the past. We know carbon dioxide was higher in the past. No climate apocalypses occurred during those periods. In fact, warming and high carbon dioxide do not correlate.
The “science” is more the history of mass movements, or the sociological equivalent of mass sociogenic illnesses. Witchcraft hysteria, pogroms, or tulip mania are closer to what is going on with “climate change” than a real upcoming disaster.
I recently read Witch trials in the early modern period – Wikipedia
The similarities to Global-Warming hysteria are astounding.
Investors hope to make $trillions in profits from “climate change” spending. They own the media, control the politicians with their campaign contributions and control the universities with their grants.
Investors Call for Policy Unleashing $275 Trillion for Net Zero
https://www.bloomberg.com/news/articles/2023-09-21/investors-call-for-policy-unleashing-275-trillion-for-net-zero
These “investors” might be upset that Janet Yellen wants “only” $78 trillion by the year 2050. Climate-fighting greed knows no bounds, even when it only has a very weak influence on the climate.
Based on increased absorption of infrared radiation by CO2 alone, increasing the CO2 concentration from ~300 ppm in 1896 (estimated by Arrhenius in his famous paper) to ~420 ppm in 2023 (at Mauna Loa) would be responsible for an increase in global average temperature of about 0.18 C (Detailed calculations available on request).
The observed increase in global average temperature over that period was 1.09 C (per GISS). So the accumulation of CO2 in the atmosphere is responsible for only 16% of the observed increase, and the rest (84%) is due to natural forces, over which human beings have no control.
So why should anyone spend trillions of dollars fighting “Mother Nature”, which is 6 times stronger than mankind over the past century?
When the boss is clueless, what can we expect.
Bloomberg’s quote on Farming
“I could teach anybody, even people in this room, no offense intended, to be a farmer. It’s a process. You dig a hole, you put a seed in, you put dirt on top, add water, up comes the corn.”
If there had been massive global panic when mile-thick glaciers covered North America all the way south to the Ohio Valley, they could’ve thrown enough virgins into bonfires to STOP THE MELTING! before Great Lakes emerge, before evergreen trees colonize three million square miles of former barren ice.
Oh, my Gawd! The humanity, the humanity. . .
On second thought, maybe panickers DID throw virgins into bonfires. Maybe that made enough smog to CAUSE THE MELTING. Maybe the global panic prompted hasty action that was counterproductive.
It won’t be the first time.
Oh, for the good old days when there was a lot more ice, longer winters and shorter summers, and a lot fewer living things.
I’ve read financial and economic modeling studies for almost 50 years. This is gibberish.
It’s the climate change equivalent of the Drake Equation estimate of extraterrestrial life: turtles all the way down. The ‘analyst’ can get any desired answer. Meaningful testing is impossible.
On the other hand, Anthony’s analysis is top-not h.
Nice Anthony. It has been some time since any journalist said anything I thought was worth listening to. Almost all of them repeat the same old thing, what ever is handed to them by those in charge.
Doing what they propose to do to slow the ‘ planetary heating‘ caused by ‘greenhouse-gas’ emissions will gouge 40% from global equity valuations,
If there’s anything that could be a Black Swan for the market, it would be the collapse of the “Green Energy” industry. Basically all the investors of any size are pot committed to the climate catastrophe, not that they actually believe it, but they believe in the immense trough of government funding and subsidies that comes with it. It is, in effect, yet another massive wealth transfer from the average tax payers to the ultra-rich who are in the position to benefit from the flow of funding. This is nothing new within a corrupted system, it’s been happening for many decades and will continue to accelerate until it can no longer do so (due to collapse).
EDHEC-Risk Climate Impact Institute eh?
Sounds like their job is to dream up fanciful estimates via biased self satisfaction spreadsheet models…
Air NZ leaves Bloomberg la la land and comes back down to earth-
Air New Zealand pulls the plug on 2030 climate targets (msn.com)
However, it doesn’t matter if Climate Change is an actual threat to financial markets. Our investors, as advised by brokers etc think that there is a serious risk, they will pull their money and head for the hills.