Time for collective risk mitigation

Time for collective risk mitigation

In April 2018, The Economist wrote about the sharp increase of methane in the atmosphere during the past 10 years. This increase is worrying because, like carbon dioxide, methane retains heat and contributes to the heating of the earth. Scientists don’t agree on the cause of the increase either.

A possible cause is that the heating of the earth causes an increase of methanoges as an additional effect. Methanoges are located in moist soils and break down organic matter, releasing methane. An increase of methanoges therefore creates more methane in the atmosphere. Another possible cause is more worrisome and stored in the North Pole. There, the amount of methane stored in the ice caps is more than twice as much as all the carbon dioxide that humanity has emitted since 1800. The increase of methane in the atmosphere could be due to the release of melting ice caps in which it is stored.

Alongside these causes, there is also the so-called feedback loop effect, whereby more carbon dioxide in the atmosphere makes the earth warmer and thus also ensures that an increasing amount of methane is released, so even more heat is retained. It’s possible that the earth is heating up faster than we have predicted, due to feedback loops that we have not yet discovered.

We don’t see feedback loops in the historical data and cannot include them in our prognosis. So, is the Paris climate agreement sufficient? Do we, as a financial sector, act and adjust enough to counter the heating of the earth? What do you do yourself to prevent global warming?

It’s difficult to change this situation as an individual. However, it is possible to consciously choose to contribute as little as possible to global warming. If several individuals become aware of the severity of the situation and choose to minimize our contribution to warming, this may possibly lead to a translation of this choice and awareness into several institutions’ policy.

This would not only mean that we would reduce our flying, driving and meat eating, but also that we would take energy neutrality even more into account when investing. It’s the most collective form of risk mitigation. An ultimate investment in long-term success. At first, it may feel like a downshift, but in the end it means protecting the quality of life as we can (still) cherish it now.

Get in touch with Zaid Siddiqi for more information about this column.