Leading US financial giants now predict that global climate goals will fail but they’re eyeing big profits as the planet heats up. In a wave of new forecasts, Wall Street banks including Morgan Stanley and JPMorgan Chase admit that the Paris Agreement’s aim to limit global heating is effectively out of reach.
Instead, investors are being advised to prepare for a 3°C warmer world, well beyond the internationally agreed threshold of 2°C. The consequences? More deadly heatwaves, extreme weather, economic chaos and a massive surge in demand for air conditioning.
Morgan Stanley’s March analysis predicts that the global AC market could jump 41% by 2030, reaching $331 billion, driven by the intensifying need for cooling in a hotter world. The report identifies dozens of air conditioning firms likely to benefit from rising temperatures.
“Cooling will be a long-term growth theme,” says the report, describing it as critical for human health and productivity.
But critics say this outlook is shockingly cynical. Paddy McCully of Reclaim Finance slammed the report, especially given that Morgan Stanley recently weakened its climate targets and withdrew from the Net-Zero Banking Alliance a move echoed by other major US banks like JPMorgan, Bank of America, Citigroup, and Goldman Sachs.
“There’s a clear retreat on climate from the finance sector,” said McCully, calling it a mix of political influence and corporate backtracking. Much of this shift is being linked to Donald Trump’s return to the White House, where he’s once again rolling back environmental protections and dismissing climate change as a hoax.
Analysts agree that even though the transition to a warmer world will bring opportunities like new shipping routes through the melting Arctic these are opportunities born out of crisis, not progress. Economist Gernot Wagner described this frank acknowledgment of climate-driven profit as “saying the quiet part out loud.”
And while Morgan Stanley insists its research simply reflects expert findings, it also admits that an AC boom won’t solve the problem especially if those units are powered by fossil fuels, adding even more emissions to the cycle.
With last year being the first to exceed 1.5°C in global warming, many experts believe the window for limiting damage has already closed. What’s left now, it seems, is a scramble to adapt and for some, to profit in a world of increasing heat.