Opinion: Tracking global warming trends? Think like a stockbroker
Oct. 2, 2013
Collectively, we must invest now in climate policies that recognize the long-term trend of increasing global temperatures.
By Amy Luers and Leonard Sklar
For the Daily Climate
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 invested over the long haul you were 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 both 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.
Trend versus fluctuations
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.
It's surprising how many people, keenly aware of the dangers of conflating short-term variability with long-term trends in the market, are fixated on short-term climate fluctuations. The Wall Street Journal's editorial board, calling in an Oct. 1 editorial for "policy caution" despite science's bold-face conclusions, is just the latest media example.
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.
Amy Luers is the Director of Climate Change for Skoll Global Threats. Leonard Sklar is a professor of geology at San Francisco State University. This article was originally published in TakePart.com, the digital division of Participation Media.
Image of man in front of electronic trading screens courtesy Mike Baird/flickr.
The Daily Climate is an independent, foundation-funded news service that covers climate change. Find us on Twitter @TheDailyClimate or email editor Douglas Fischer at dfischer [at] DailyClimate.org
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