The expected return of the El Niño weather pattern, supercharged by climate change, is shaping up to be the next test for a global economy already strained by the fallout from the Iran war.
El Niño occurs every few years when trade winds of the tropical Pacific weaken and the ocean warms up. It typically lasts up to a year, peaking around year-end, and tends to bring dryness and heat to much of Asia and wet weather to various places, including the Gulf Coast.
The diverse outcomes of the last El Niño, from 2022 to 2023, included a rice export ban in India, a dengue epidemic, low water levels in the Panama Canal, devastating floods in Brazil and more expensive chocolate.
Forecasters in the U.S. and elsewhere say El Niño is highly likely to form this year. Very hot ocean temperatures mean it has the potential to be a severe one, but it’s too early to say.
https://www.wsj.com/business/energy-oil/el-nino-is-the-next-risk-hanging-over-the-global-economy-810c4b47?st=hj83Pp&reflink=article_email_share
Christopher K. Merker, PhD, CFA, is a director with Private Asset Management at Robert W. Baird & Co. He holds a PhD in investment governance and fiduciary effectiveness from Marquette University, where he has taught the course “Sustainable Finance” since 2009. Executive director of Fund Governance Analytics (FGA), an ESG research partnership with Marquette University, he is a member of the CFA Institute ESG Working Group, an international committee currently exploring ESG standards, publishes the blog,
Sustainable Finance, which covers current topics around governance and sustainability in investing, and is co-author of the book,
The Trustee Governance Guide: The Five Imperatives of 21st Century Investing.
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