2022

The world is creeping closer to the warming threshold international agreements are trying to prevent, with nearly a 50-50 chance that Earth will temporarily hit that temperature mark within the next five years, teams of meteorologists across the globe predicted.

With human-made climate change continuing, there’s a 48% chance that the globe will reach a yearly average of 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels of the late 1800s at least once between now and 2026, a bright red signal in climate change negotiations and science, a team of 11 different forecast centers predicted for the World Meteorological Organization late Monday.

The odds are inching up along with the thermometer. Last year, the same forecasters put the odds at closer to 40% and a decade ago it was only 10%.

The team, coordinated by the United Kingdom’s Meteorological Office, in their five-year general outlook said there is a 93% chance that the world will set a record for hottest year by the end of 2026. They also said there’s a 93% chance that the five years from 2022 to 2026 will be the hottest on record. Forecasters also predict the devastating fire-prone megadrought in the U.S. Southwest will keep going.

“We’re going to see continued warming in line with what is expected with climate change,” said UK Met Office senior scientist Leon Hermanson, who coordinated the report.

These forecasts are big picture global and regional climate predictions on a yearly and seasonal time scale based on long term averages and state of the art computer simulations. They are different than increasingly accurate weather forecasts that predict how hot or wet a certain day will be in specific places.

But even if the world hits that mark of 1.5 degrees above pre-industrial times — the globe has already warmed about 1.1 degrees (2 degrees Fahrenheit) since the late 1800s — that’s not quite the same as the global threshold first set by international negotiators in the 2015 Paris agreement. In 2018, a major United Nations science report predicted dramatic and dangerous effects on people and the world if warming exceeds 1.5 degrees.

The global 1.5 degree threshold is about the world being that warm not for one year, but over a 20- or 30- year time period, several scientists said. This is not what the report predicts. Meteorologists can only tell if Earth hits that average mark years, maybe a decade or two, after it is actually reached there because it is a long term average, Hermanson said.

“This is a warning of what will be just average in a few years,” said Cornell University climate scientist Natalie Mahowald, who wasn’t part of the forecast teams.

The prediction makes sense given how warm the world already is and an additional tenth of a degree Celsius (nearly two-tenths of a degree Fahrenheit) is expected because of human-caused climate change in the next five years, said climate scientist Zeke Hausfather of the tech company Stripe and Berkeley Earth, who wasn’t part of the forecast teams. Add to that the likelihood of a strong El Nino — the natural periodic warming of parts of the Pacific that alter world weather — which could toss another couple tenths of a degree on top temporarily and the world gets to 1.5 degrees.

The world is in the second straight year of a La Nina, the opposite of El Nino, which has a slight global cooling effect but isn’t enough to counter the overall warming of heat-trapping gases spewed by the burning of coal, oil and natural gas, scientists said. The five-year forecast says that La Nina is likely to end late this year or in 2023.

The greenhouse effect from fossil fuels is like putting global temperatures on a rising escalator. El Nino, La Nina and a handful of other natural weather variations are like taking steps up or down on that escalator, scientists said.

On a regional scale, the Arctic will still be warming during the winter at rate three times more than the globe on average. While the American Southwest and southwestern Europe are likely to be drier than normal the next five years, wetter than normal conditions are expected for Africa’s often arid Sahel region, northern Europe, northeast Brazil and Australia, the report predicted.

The global team has been making these predictions informally for a decade and formally for about five years, with greater than 90% accuracy, Hermanson said.

NASA top climate scientist Gavin Schmidt said the figures in this report are “a little warmer” than what the U.S. NASA and National Oceanic and Atmospheric Administration use. He also had doubts about skill level on long-term regional predictions.

“Regardless of what is predicted here, we are very likely to exceed 1.5 degrees C in the next decade or so, but it doesn’t necessarily mean that we are committed to this in the long term — or that working to reduce further change is not worthwhile,” Schmidt said in an email.

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By Tommy Wilkes

LONDON (Reuters) – Stocks fell heavily again on Monday and the dollar rocketed to a new two-decade high as worries about higher interest rates and a tightened lockdown in Shanghai deepened investors’ fears that the global economy is rapidly heading for a slowdown.

After a bruising session on Friday in which U.S. stocks sold off sharply as another rise in long-dated U.S. Treasury yields unnerved investors, markets were set for a rocky start to the week, with most indexes in the red.

Central banks in the United States, Britain and Australia all raised interest rates last week, and investors are bracing for more tightening as policymakers try to get on top of soaring inflation.

“We see recession risk over the next 12 to 18 months to be as high as about 30%,” said Dan Ivascyn, group chief investment officer at bond giant PIMCO.

“One of the key reasons for that is the Fed and other central banks appear dead set on getting inflation under control.”

There was plenty more for investors to worry about on Monday aside from tightening financial conditions.

There appeared to be no let-up in China’s zero-COVID policy, with Shanghai tightening the city-wide lockdown for 25 million residents.

Speculation that Russian President Vladimir Putin might declare war on Ukraine in order to call up reserves during his speech at “Victory Day” celebrations also hurt market sentiment. Putin has so far characterised Russia’s actions in Ukraine as a “special military operation”, not a war.

Wall Street futures headed sharply lower with the S&P 500 futures down 2% and Nasdaq futures 2.5%. The S&P 500 and Nasdaq on Friday posted their fifth straight week of declines — their longest losing streak in a decade.

The Euro STOXX weakened 2%. Germany’s DAX lost 1.6% and Britain’s FTSE 100 1.78%.

MSCI’s main emerging market stocks index fell 1.2% to its lowest level since July 2020.

The MSCI World Index dropped 0.7%, leaving it not far from the 17-month intraday low reached on Friday.

(Graphic- World equities: https://fingfx.thomsonreuters.com/gfx/mkt/znvnemgrrpl/world%20equities.JPG)

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.4% and Japan’s Nikkei 2.53%. Chinese blue chips eased 0.8%, while in offshore markets the yuan fell to as low as 6.7759 per dollar, its weakest since October 2020.

The big data event of the week is the U.S. consumer price report due on Wednesday, when only a slight easing in inflation is forecast, and certainly nothing to prevent the Federal Reserve from hiking by at least 50 basis points in June.

U.S. 10-year bond yields on Monday reached a new 3-1/2 year high of 3.203%.

DOLLAR DOMINANCE

With investors juggling so many worries, one place they are looking for safety is in the dollar.

The dollar index, which measures the greenback against a basket of currencies, rose as much as 0.4% to 104.19, the latest in a string of 20-year highs.

“Risk appetite is fragile and yield spreads continue to suggest further upside on the Dollar Index,” said Sean Callow, a senior FX strategist at Westpac.

“We look for ongoing demand for DXY (the dollar index) on dips, with 104 already being probed and still potential for a run towards 107 multi-week.”

The soaring dollar is hammering other currencies. The euro briefly dropped back below $1.05 while the Japanese yen fell to its weakest since 2002.

Expectations that the Fed will move more aggressively in raising interest rates are supporting the dollar, as is a sense among investors that the U.S. economy will hold up better than a euro zone hit by the fallout from the war in Ukraine.

But rates are also rising in the euro zone. On Monday, Germany’s 10-year bond yield hit a new highest level since 2014, buoyed by hawkish policymaker Robert Holzmann saying on Saturday that the European Central Bank should raise rates three times this year to combat inflation.

The diary is full of Fed speakers this week, giving them plenty of opportunity to keep up the hawkish chorus.

Oil prices initially see-sawed after the Group of Seven nations committed to banning or phasing out imports of Russian oil over time, before falling.

Brent dropped 2.15% at $109.97 by 1115 GMT, while U.S. crude dropped 2.39% to $107.15. [O/R]

Spot gold prices lost 1.24% to $1,859 an ounce, having struggled recently to gain traction as a safe haven. [GOL/]

(Reporting by Tommy Wilkes; Additional reporting by Wayne Cole in Sydney; Editing by Bradley Perrett and Chizu Nomiyama)

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