The Earth faces a major solar event early next year that could damage satellites and have a potentially catastrophic impact on the global economy as the Sun reaches the peak of its 11-year cycle.
The “solar maximum” sends out radiation that could throw thousands of orbiting devices into “satellite drag”. Should scientists fears be realised, the impact of next year's event is likely to be unprecedented because there are now 10 times more satellites in orbit than there were during the last cycle.
Predictions by a leading space weather scientist who spoke to The National from the British Antarctic Survey (BAS) suggest the upcoming cycle is more powerful than the last with “substantial risk” to satellites in low-Earth orbit.
The UK Risk Register, which grades events such as pandemics, terrorist attacks and nuclear war, has now raised the level to “significant” for the impending solar maximum.
The event, which could last between two and three years, has the potential to cause the Kessler Event in which two satellites collide, with the debris having a cascading effect on others, potentially wiping out most of the orbiters. The Royal United Services Institute think tank in 2019 noted that the Kessler Effect – in which two objects colliding would cause potentially infinite other collisions – posed the same threat to the use of space as climate change or plastics in the oceans pose on Earth.
There are more than 7,000 satellites in space, with almost the entire globe dependent on them for mapping, timing and the internet.
“This could have quite a severe impact globally on how we run our lives, so it is a significant cause for concern,” said Prof Mervyn Freeman, BAS deputy leader of space weather.
In the worst-case scenario the event could prove as economically disastrous as the Covid-19 pandemic, costing the global economy “many billions, if not trillions” in the damage caused, he said.
High intensity
The 11-year natural solar cycle is coming to a peak but at a “greater intensity and more powerful than the previous solar cycle”, with the one starting in 2013 being “a relatively weak affair”, Prof Freeman said.
All space weather is driven by energy from the Sun and the intensity is predicted by counting sunspots, areas where the magnetic field is about 2,500 times stronger than Earth's,
“The number of sunspots that we're seeing now is more than the previous time around so we know that this makes space weather more variable and intense,” the scientist said.
“We may have yet to experience the worst of the space weather and we don't know entirely what the consequences might be.”
The BAS is providing modelling on the potential impact to the UK Met Office, which is the government “risk owner” for space weather.
Starlink threat
The peak is likely to occur in the first half of 2024 and the “highest risk period” will last for up to three years afterwards.
The main risk from the solar maximum is particle radiation, in which particles can get accelerated to very high energy by the Sun's radiation, which ionises them and creates plasma.
Charging through space, this plasma can damage geostationary orbit satellites’ electronics, sending them off course unless they are protected to withstand a charge.
The 3,500 satellites in low-Earth orbit, including Elon Musk’s Starlink service that is crucial to the Ukrainians in their fight against Russia, could be vulnerable to “satellite drag”.
The space weather creates electrical currents that flow through the outer region of the atmosphere and change its density, acting as a drag on satellites and changing their orbit.
The low-orbit area, between 160km and 1,000km above Earth, has become cluttered with defunct satellites and space debris that also needs to be tracked.
Companies such as Starlink will need to be informed about potential incoming debris and manoeuvre their satellites out of danger to avoid the Kessler Effect.
“The main risks would be from a major geomagnetic storm, which would be a big disrupter and a big space weather event,” said Prof Freeman, speaking at BAS headquarters in Cambridge.
Another danger would be “that we fail to predict a conjunction of two objects for a collision avoidance manoeuvre and they collide, producing thousands more pieces of debris”.
That could make low-Earth orbit “unsustainable”, instigating the runaway Kessler Effect.
Carrington trillions
The most intense recorded geomagnetic storm was the Carrington Event of 1859, which caused telegraph systems to go haywire, with some lines catching fire. Named after British astronomer Richard Carrington, who documented the effects – the biggest solar storm in recorded history hit Earth with the power of 17 nuclear bombs.
If there was a repeat of Carrington the worldwide cost would be trillions of pounds, similar to the pandemic but with much fewer deaths.
Surging electrical currents can also damage transformers in the national grid, causing serious interruptions to power supply.
Lloyd's of London insurers have estimated that a Carrington-level event would cost the US alone up to $3 trillion or 15 per cent of GDP.
“Our models are being delivered to the Met Office so hopefully they are more prepared, but there's still a lot of research to do to improve on them,” Prof Freeman said.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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