Want to Track Global Warming Trends? Think Like a Stockbroker
Editor's Note: The following piece first appeared on TakePart.com. It was co-authored by 2000 Fellow Dr. Amy Luers, Director of Climate Change at Skoll Global Threats Fund, and 1996 Fellow Professor Leonard Sklar, San Francisco State University. We invite your comments on the article in the section below.
Ask a Wall Street analyst and all but the most extreme contrarians will tell you that over the long run, the market is going to go up. Sure, over the last century there have been some downturns, and some flat periods of little growth, but if you invest over the long haul you are virtually guaranteed to make money.
Now consider the question: Is the planet warming?
Ask a climate scientist and all but the most extreme contrarians will tell you that over the long run, the global surface temperature is going up. Sure, over the last century there have been some periods of slight cooling, and some periods where the temperature seemed stable, but if you analyze the temperature trend over a long enough time interval, you’re guaranteed to find significant warming.
The upper two graphs illustrate how similar the patterns of short-term variability and long-term growth are for the stock market and global temperature. Over the last century, both have increased dramatically, enough for significant profits to be reaped from the market, and for significant changes in our environment to be felt across the planet. Both trends also show major fluctuations, including a flat period of little change over the most recent decade.
The lower two graphs illustrate how to separate short-term variability from the long-term trends. Any investment advisor worth their fee will point out that if you had invested and then withdrew your money in any random one or two year period of the last century, the odds of coming out ahead were around 50-50. But if you had left your investment in the market for 30 years, the odds of a profit go up to about 90 percent.
Any scientist worthy of their advanced degree should similarly point out that if you compare only a brief one or two year period over the last century, the odds of finding an increase in global temperature are barely better than 50 percent. However, if you consider temperature change over a 30-year period, nearly 90 percent of the time you’ll find that temperatures have increased.
Therefore, for both the rising stock market, and the warming global temperature, the long-term trend completely overwhelms the short-term fluctuations.
Not everyone can afford to invest in the stock market. But when it comes to investing in climate policies, none of us can afford to wait any longer.
Collectively, we must invest now in climate policies that recognize the long-term trend of increasing global temperatures. Nothing less than our children’s future depends on it.