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In 2023, temperatures hit record highs thanks to the El Niño phenomenon, resulting in warmer surface waters in the Pacific and subsequently causing hotter and drier weather. Such conditions lead to a decrease in сocoa harvest yields. However, the real kicker is that 2024 could surpass it, which is not good news for anyone.
Scientists are pointing fingers at skyrocketing greenhouse gas emissions, resulting in ocean acidification, rising sea levels, melting ice caps, and glaciers retreating.
Where is all this leading us?
Let’s be clear: people in polar climates will only pack up and move to the tropics after a while. But as temperatures rise, permafrost degradation becomes a genuine concern.
As you might expect, this leads to problems: flooding, the formation of subway voids, and the inevitable destruction of infrastructure and, tragically, human lives.
And remember that permafrost contains tons of organic matter that, as it decomposes, releases methane, a potent greenhouse gas. As the saying goes, one problem triggers another, often bigger problem.
Now, about the economy…
Natural catastrophes and rising temperatures, such as those we have seen in the last decade, always result in astronomical losses for both government and households.
As for claims that warmer winters have kept gasoline prices in check, don’t hold your breath; the summer heat will likely even things out as it will increase the consumption of air conditioners.
Who stands to gain? Top stock gainers could be the beverage companies, such as The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP), and the construction and repair companies, such as Home Depot, Inc. (HD), and Lowe’s Companies, Inc. (LOW).
What is in store for Europe?
The drying up of rivers and lakes will affect logistics, energy, and agriculture. Dealing with these problems will require no walking in the park, especially given the current economic climate.
With crop shortages and dwindling resources triggering inflation, the ECB will have to tighten its belt, with the consequent risk of corporate default. This is currently the last thing we need.
Overall, an analysis by the World Economic Forum suggests that climate-intensified natural catastrophes could lead to losses of $12.5 trillion between now and 2050.
