Global Warming: a matter of resolution

First global average temperature: measurements taken at a number of locations around the world are allotted to a local geographical area, and the average is weighted by their relative size.

There appears to be some debate about the validity of such a single figure with respect to Climate modelling, but as a metric for Climate change policy I don’t see a better option.

The following global temperature chart is taken from the website of the UK Met Office Hadley Centre.

Sure enough, it clearly shows the temperature falling over the last decade! Worrying, until I started to look at these data from the perspective of an investor.

For these purposes this annual data is too fine grained. Whether your returns are financial or environmental, they will require a time scale of decades to become apparent, and at this resolution the trend is clearly rising.

The annual data form an interesting trend in terms of Climate modelling, but the real relevance of a broad metric like this is in establishing policy and the investment necessary to mitigate and adapt to climate change.

So the fine grained drop in global temperature is academically interesting, but irrelevant for purposes of policy; it’s a matter of choosing the appropriate resolution.