22 March 2024
Dear 50 International,
Noah, as the Bible records, listened to God and built an Ark. In the rabbinical tradition when asked why, Noah told of a Flood to overwhelm the earth whilst being mocked and persecuted. Today’s mockery is of denial, and indifference blamed on conspiracy, El Niño versus La Niña or just aberrations.
However, as Noah built and waited, we wait for 2024’s news hoping for relief from flood, fire and record-breaking temperatures. As a reminder, NASA’s Goddard Institute reports that 2023 was the warmest on record with July the hottest month ever. The EU's Copernicus Service recorded February 2023 to January 2024 as reaching 1.52C of warming!
Whilst Noah saved creation by floating on rising waters Science looks at the seas with increasing trepidation. Covering 71% of the planet’s surface, the seas are an overlooked bellwether. Ocean temperatures are also breaking records with February’s the highest known and likely to go yet higher. The speed of change is alarming science. As glaciers and ice sheets melt, with less sea ice, ocean currents are threatened; the Gulf Stream included.
Unchecked, an average temperature rise of 4%, the IMF estimates a debt-to-GDP ratio cost of 300%! To globally counter this annual investment of some £6.8 Trillion is needed; some 25% of all tax revenues (7% of household spending). This at a time when higher interest costs weigh heavily on Government debt still carrying costs of the 2007-8 financial crash, Covid, rising welfare costs and for the UK, the drag of Brexit. Britain is not alone with sustained high debt levels and little reserves. Globally, 2024 needs some $3.4 trillion of new debt.
Additionally, GDP models must adjust to rapidly ageing populations, collapsing birth rates, migration, and re-onshoring as challenges emerge from robotics and AI whilst societies become less cohesive. However, the cost of inaction is almost unthinkable.
Geo-economically, the Middle East uses oil earnings and debt to compete with huge showcase projects as fossil fuel earnings flatten and temperatures rise. For China, opaque financial data hides ageing populations, climate problems, the fallout of unofficial lending, a property debt crisis & compromised local government liabilities of $9 trillion resting on a coal-dependent economy being the world's leader in emissions. Outwardly the world’s lender with foreign assets of $4.3 trillion but deeply compromised with India a fast-rising challenge.
Unlike Noah’s, our Arks as nations are unmovable. The flood governments face is that of funding in uncharted seas, already burdened by adverse geopolitics and expensive debt. As Science scans for tipping points, Governments scan for tax opportunities and greater tax efficiency.
For families seeking havens for their familial Arks, they must also navigate fraught geopolitics, failing states, rising authoritarianism and the stalking horse of war. In this, tax becomes a more nuanced matter when considering such as the Goodard Institute's modelling; the UK ironically being a potential climate haven. A time to listen, indeed.
All the best
Alistdair