The latest Intergovernmental Panel on Climate Change (IPCC) report on the current state of climate makes for grim reading. Its overarching conclusion is that every fraction of a degree of warming matters; and that if we want to limit global warming to 1.5˚ C (2.7˚ F) in the hope of averting catastrophe, we have as little as 12 years to act, which requires slashing global emissions by 45 percent.
For investors, this means the following: (1) a tax carbon combined with heavy regulation is inevitable; (2) progress in the use of nonfossil fuel technologies will continue to advance exponentially rather than linearly, with sustainability embedded in all decisions.
Global warming is anxiety provoking and, therefore, bound to have a negative effect on our wellbeing. Numerous academic papers are being published on the psychological toll that climate change exercises on our mental health; and last year, the American Psychological Association validated for the first time “eco-anxiety” as a clinically legitimate diagnosis.
This suggests that demand for mental wellness services will increase (roughly) in some proportion with the extreme weather manifestations, such as heat waves, hurricanes, fires and droughts, all of which are progressively becoming the norm.