The Notebook: SocGen’s Kokou Agbo Bloua on the Nautilus, housebuilding and climate change
Today, Societe Generale’s global head of economics Kokou Agbo Bloua takes up The Notebook pen to tell us about the Nautilus, housebuilding and climate change.
The Nautilus Chronicles: Exploring the future of oceans
What has no beginning, end, or middle and touches every continent? If you answered “the ocean”- correct! Jules Verne even called it the “living infinite” in his novel Twenty Thousand Leagues Under the Sea. It is the story of three men who set sail in search of a giant sea monster but were instead captured by Captain Nemo aboard the world’s first submarine, The Nautilus. Together, they embark on an extraordinary undersea journey, encountering amazing deep-sea creatures, and even discovering the lost city of Atlantis.
Following in the footsteps of the Nautilus, the latest episode of Societe Generale’s 2050 Investors podcast is not an attempt at “finding Nemo” (pun intended) but rather dives deep into the mysteries of the oceans, aboard the modern-day Nautilus, the Nautile, the submersible that explored the Titanic’s wreck underseas.
The oceans are a major component of Earth’s climate system. Over thousands of years, they have played the principal role in the climatic balance that the planet has experienced: taking up heat and redistributing it across the globe, increasing atmospheric humidity, taking up and storing large quantities of CO2 from the atmosphere. Without the ocean, Earth’s maximum temperature would exceed 100°C, and the average surface temperature, which is currently around 15°C, would instead be around 50°C.
Unfortunately, this formidable force of nature, the living infinite, is reaching a tipping point because of global warming through marine heatwaves, rising acidification, plastic pollution threatening marine biodiversity on a massive scale.
Later in the episode, Nisha Bakker, director of partnerships at The Ocean Cleanup, shares some of her insights. The Ocean Cleanup is a non-profit foundation working daily to rid the world’s oceans of plastic. Nisha emphasises the need for a global effort to change the system of plastic production and waste management.
Home sweet home: Solutions for climate-resilient housing
“There’s no place like home”. This iconic phrase appears in The Wizard of Oz to remind us of the human need for familiarity, belonging and protection.
We start off another episode of 2050 Investors with the cautionary tale of The Three Little Pigs: a sobering reminder of the need to build sustainably for tomorrow.
Current estimates put the total number of houses at around 2bn and by 2050 we will need to house around 10bn people. To meet that need, over the past centuries, our homes have followed a Darwinian process of evolution by natural selection of efficiency. From caves to skyscrapers, they’ve protected us from wild animals, natural disasters and the changing climate. However, the housing industry also accounts for 39 per cent of global energy related carbon emissions according to the World Green building council. How can we create sustainable homes for all, and will we adapt in time in the face of the big bad wolf of climate change?
Economic outlook: Resilient but sluggish
SG economists believe that growth will continue to prove resilient in 2024 but remain rather sluggish and weaker than in 2023. In the US, the long-predicted recession will belatedly materialise in 2024. The main arguments for such a scenario are the lagged effects of monetary tightening. Despite having surprised to the upside in the third quarter of 2023, China’s economy is expected to expand more slowly in 2024. The euro area will contribute little towards compensating for the slowdown in the two largest economies. One key reason: the exceptionally high degree of resource utilisation, particularly as regards labour, as attested to by the exceptionally low unemployment rates.
Update on greenhouse gas emissions: Climate transition efforts curbed by financing challenges
SocGen economists’ estimates suggest that the world is on track for a 2.3°C average temperature rise by the end of the century, far from the 1.5°C goal of the Paris Agreement.
Based on EDGAR data, global greenhouse gas emissions are set to increase to 54.3bn tonnes of CO2e this decade. Many emerging markets and the rest of the world should see a continued and significant surge in emissions, whereas emissions across the advanced economies should fall. Emissions are close to peak in China.