Presentation on theme: "Hedging Planetary Risk & Climate Change: The Biggest Unmanaged Factor In Investing— Predictions And The Impacts On Your Portfolio Simon R. R. Atkins CEO,"— Presentation transcript:
1Hedging Planetary Risk & Climate Change: The Biggest Unmanaged Factor In Investing— Predictions And The Impacts On Your PortfolioSimon R. R. AtkinsCEO, Atmospheric Scientist; Advanced Forecasting Corporation [AFC]GLG Institute
2BiographySimon Atkins is CEO of Advanced Forecasting Corporation [AFC], a think-tank in global Planetary Risk Management and a leader in climate change hazard consulting for businesses and investors that are affected by natural- based threats, human-caused perils, and economic complexities. For the last 20 years, Mr. Atkins has provided strategic expertise in advanced weather risk modeling and advises on vulnerability assessment “hotspots” for optimized security planning and business continuity. He is a Ph.D. candidate in biometeoelectromagnetics, and has an International MBA from the Helsinki School of Economics and a B.Sc. in atmospheric physics from Cornell University.For further information or to schedule a consultation with Simon Atkins, please contact your GLG representative.
3Table Of ContentsIntroduction: Are we “passengers” or “drivers” on this planet?Industries Affected: Present Impacts / Losses Are Real -- $0.55 Trillion Real In 2005Okay, So What Is Planetary Risk, And Why Is It Potentially Becoming Your Greatest Unmanaged Investment Factor To Implement A Plan For?Industries AffectedWhat Is ‘Shifting’, And By How Much, And Where, And When?‘Quick’ But More Accurate Word On Global Warming Climate Change (3 Parts)Global Hotspot Hazard Zones: Present & Future Trouble-SpotsUSA Planetary Risk Predictions: Threat Identification Maps Out 18-MonthsHow Do We Know This? (Forecast Derivations) What Is Our ‘Hit’ Rate Accuracy?Some Impacts On Economies, The Environment, Societies, Industries, Businesses, Investment Portfolios...And YouSimon’s Strategies For Exposure MinimizationNext Steps, Thinking Well Beyond ‘Out Of The Box’ For Opportunistic Business Continuity
4Are we “passengers” or “drivers”? Most evidence supports the former.
5Introduction: Present Impacts & Losses Are Real To Many 90% of Americans live along the coasts, near flood zones, earthquake fault lines, or in other locations that are at a high or moderate risk or being hit by a major natural disaster87% of businesses are negatively impacted by adverse weather at least 4x/yearAverage median known “climate hazards” loss (some information taken from citations of 140 different annual reports on Fortune 1000 firms) ranges from:Low-end: $50,000 loss on $1.7M revenue (2.9%) toHigh-end: $175,000,000 loss on $12B revenue (1.5%)But 37% of businesses had financial effects worth 5% - 23% of revenue!
6Introduction: Present Impacts & Losses Are Real To Many If the majority of these businesses ‘gamble(d)’ on weather / planetary risk, the respective accuracy would be approximately 42%-57% (a coin flip)But for 1% increase in accuracy (with intelligence), revenue saved on losses is ~ 2%And for 10% increase in accuracy (w/ intelligence), revenue saved on losses is ~ 39%With 80% total accuracy (from intelligence), revenue saved on losses is ~ 58%-184%!!Annual total climate refugees totaling one-third the USA population equivalentUp to 20% may come to the USA based on “destructive” climate, but few laws allow it.
7What Is Planetary Risk? Why Is It Most Unmanaged? Natural-based risks and human-caused threats that can trigger adverse economic, environmental and/or societal impacts.Natural-BasedHuman-CausedEarthquakes, volcanic eruptions, methane / carbon ‘burps’ (oceanic / permafrost)Terrorism, geo-political tensionPower / Energy Grid DisruptionsHurricanes, windstorms, tornadoes, blizzards, ice-storms, severe storms,Using weather as a weapon (ex. re-directinga hurricane to hit your enemy)Heat-waves, life-threatening coldAnthropogenic climate changeViral epidemics, technological “displacement” (sonar research, oil drilling, bombs, etc.)Rainstorms, river flooding, ice jams,snow melt floodsSolar cycle disruptions, solar radiation aberrations, Milankovitch TheoryOcean current aberrations (Thermo-Haline Circulation)Electromagnetic transference lines, geothermal warming, Magnetic North“polar shifts”Can you gauge these threats...can you quantify the risk?
8Population Displacement Industries Affected By Climate Change Hazards & Planetary ShiftsAgribusinessChemicalsCommoditiesConstructionEnergyEnvironmentEventsFinanceForensicsHealthInsuranceInvestmentsManufacturingPopulation DisplacementReinsuranceRetailSeasonal PlanningTelecommunicationsTourismTransportTravelIncreasing weather volatility and climate pattern alterations are challenging a wide spectrum of businesses and industries: utility prices, transportation schedules, crop yields, construction codes, municipalities, school districts, food processors, retail sales and real estate just to mention a few of a long list of sectors whose revenues, costs and financial performance are sensitive to weather volatility.Planetary shift disasters can affect economies for months and years to come.
9What Is ‘Shifting’, And By How Much, And Where, And When? Space weather is constantly changing.Geothermal heat fluxes are constantly changing.The electromagnetic flux (aka “communication interface”) between the Sun and the Earth is the key catalyst that is causing planetary shifting, and its volatility will surge higher through December 2012, the end of the solar cycle peak.Climate change “cluster spots” (similar to cancer clusters) are forming from electromagnetic transference lines -- some will benefit, most will experience traumatic “overhauls” from historical normals.
1057% 31% 4% Let Us Remember That Why Is Climate Changing? Why Are Weather Patterns Becoming More Erratic, More Volatile & “Stronger”?Climate is always changing in cycles, like the tides. Weather shifts are also cyclical.57%Extraterrestrial Effects / Causes1) Solar radiation flux changes2) Solar wind / electromagnetic shifts3) Space forces on revolution around SunTerrestrial & Atmospheric Effects / Causes1) Earth rotation / axis2) Ocean current aberrations3) Ocean density metamorphosis4) Electromagnetic imbalances (from core)5) Atmospheric interface changesAnthropogenic Effects / Causes1) Urban Heat Islands2) Deforestation3) Technology (SONAR)Let Us Remember That1) More people are moving toward climate hazard hotspots.2) Populations are growing rapidly in highest weather volatility zones.31%4%P.S. 8% -- we don’t know
11THE REAL CAUSE A Quick, More Accurate Word On Global Warming Climate Change: Part ISo-Called Mounting Evidence On Human-Caused Climate ChangeYou have read and heard about climate change reports, most coming from the IPCC, citing a profound effect on Earth's ecosystems. We agree, climate change is occurring. But these reports put the overwhelming majority of the blame on human-made Greenhouse gases (GHGs). We strongly disagree.The IPCC cites a so-called long list of evidence:• Glacial lakes are increasing in both size and number, potentially leading to deadly floods • Ice shelves are crumbling away and melting. In addition, the permafrost in mountainous regions and at high latitudes is warming (melting) increasing the danger of land slides. • As the temperature of rivers and lakes rises, their thermal stratification and water quality is changing. • River currents, affected by melting glaciers and ice, are speeding up during the spring. • Springtime is starting earlier, causing plants to bloom earlier and changing the migrations of birds. • Many plants and animals are expanding their habitats into mountainous regions and higher latitudes that are becoming milder.THE REAL CAUSENatural geothermal warming cycle is in an increase mode.Natural geothermal warming cycles.Natural geothermal warming cycles.Natural geothermal warming cycles.Amount of solar radiation/activity is increasing.Electromagnetic shifts with higher frequencies in the north.
12A Quick, More Accurate Word On Global Warming Climate Change: Part II The combination of more automated weather recording sites in urban centers, increasing geothermal warming (helped by a 50-year solar cycle that warms the lithosphere through increased electromagnetic radiation) both account for a large part of the increased temperatures.Of course, to be environmentally-conscious is a very positive action.If the truth and all the important facts on climate change were out in the public eye, it would not be the extremely controversial subject that is so “hot” today.
13Polar Ice & Permafrost & Glaciers A Quick, More Accurate Word On Global Warming Climate Change: Part IIIOne Prediction From That Alone...MAJOR FLOODING IN NORTH AMERICA, PARTICULARLY DOWN THE MISSISSIPPI RIVER; IN FACT, THERE IS ABOUT A 5% PROBABILITY THAT A SCENARIO OF WIDENING THE MISSISSIPPI BY 5 MILES IN YEARS FROM NOW COULD OCCUR – AND THAT COULD DRAMATICALLY ALTER MANY ASPECTS OF THE US ECONOMY.Geothermal Warming& ExpansionIncrease InVolcanicActivityMelting OfPolar Ice & Permafrost & GlaciersCause: more clouds, more storms, more tropical moisture into the MS RiverCause: more water volume into the MS River from the north
14Hotspot Hazard Zones -- Present & Future Trouble-Spots
15USA Planetary Risk Predictions: Threat Identification Maps These are the ones we will concentrate for now...but there are many more...
22How Do We Know This? What Is Our ‘Hit’ Rate Accuracy? Technology has allowed many advances...if you know WHAT to program into a computer...and if you know by HOW MUCH each parameter accounts for.Development of the combination of research, science, business, statistics, think-tank collection of intelligence, and a very open mind:Specifically...AI threat modeling, climate change “stochastic” computations (proprietary blend of historical intelligence, consensus programming, and genetic algorithms)The “Galileo Analogy” -- most present-day climate change understanding is equivalent to saying the Sun spins around the Earth.Humbly-speaking, let’s wake-up and look at this from a bigger view: we’re not the be-all-and-end- all. Start with solar and magnetic drivers.Accuracy of AFC’s planetary risk predictions: 71%-89%Accuracy of random guess-work predictions: 0%-17%
23Some Impacts On Economies, The Environment, Societies, Industries, Businesses, Investment Portfolios...And YouChange in...Will cause...Impact exampleIncrease in heat wavesEnergy grid challengesEnergy price increasesMore frequent floods; expanded drought zonesTightened food supply; more crop diseaseFood price increasesHigher proportion of intense earthquakesGreater magnitude of damage to transport and infrastructureConstruction costs increase, boom in construction?New Geo-political trading blocks (ie. new Cold War)Redistribution of energy-givers and energy-takersSurprising and dramatic country status reversalsVolcanic “hostilities”: another Pinatuboeruption by 2012Dramatic global cooling9-34 months laterHigher energy demand, higher mortality rates, etc.
24Simon’s Strategies For Exposure Minimization: Next Steps, Thinking Well Beyond ‘Out Of The Box’ For Opportunistic Business ContinuityGather intelligence on custom hotspots (those that affect your industry), both for present locations and most likely ‘shift-to’ spots.Go with logic, that which makes sense. Sometimes, we all get brainwashed temporarily. The subject of climate change is now huge: it has a political agenda too. There is a lot of fear -- scientists not being able to express their real data and opinions. My prediction is that the world will talk about global cooling before not too long.Increase contrarian wisdom...and investments (for example, currently Global Warming public, scientific validity is switching 180 degrees).Rank the risks in terms of prediction confidence and probability of occurrence.
25Simon’s Strategies For Exposure Minimization: Next Steps, Thinking Well Beyond ‘Out Of The Box’For Opportunistic Business ContinuityAssign monetary impact to low, medium and high possibilities.Draw up tertiary and quaternary (not just primary and secondary) effects of the top 5 highest ranked threats.Develop a monitoring, strategic evaluation, and decision-science recommendation system.Monitor closely the changing “Annual Reports” where businesses are factoring in more plans to instill risk management into minimizing losses based on climate change / planetary risks.
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