A Galician firefighter tackles flames during a prolonged period of drought and unusually high temperatures, in Asturias, Spain, in March. Reuters
A Galician firefighter tackles flames during a prolonged period of drought and unusually high temperatures, in Asturias, Spain, in March. Reuters
A Galician firefighter tackles flames during a prolonged period of drought and unusually high temperatures, in Asturias, Spain, in March. Reuters
A Galician firefighter tackles flames during a prolonged period of drought and unusually high temperatures, in Asturias, Spain, in March. Reuters

Carbon emissions from Europe's summer wildfires highest in 15 years


Nicky Harley
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Carbon emissions from summer wildfires in Europe were the highest in 15 years last year, with some countries seeing the highest emissions in 20 years, a new climate change report has warned.

The sixth annual European State of the Climate (ESOTC) report, published on Thursday by the Copernicus Climate Change Service (C3S), reveals low rainfall and high temperatures led to widespread droughts across the continent, which in turn helped create a perfect storm for wildfires.

Last month 1,500 people were forced to flee their homes in Spain after it suffered the first major forest fire of the year.

In 2022, which was a particularly bad year for wildfires in Europe, Spain was the worst-hit country with nearly 500 blazes that destroyed more than 300,000 hectares.

The C3S report has warned that a lack of rainfall in winter and spring this year has already led to a lack of moisture in the ground which is likely to affect crop production.

“For Europe as a whole, above-average fire danger conditions were seen throughout most of 2022,” the report says.

“Copernicus Atmosphere Monitoring Service (CAMS) scientists' monitoring of wildfires around the world tracked significant increases in wildfire carbon emissions for some European regions in summer 2022, following the hot and dry conditions.

“The total estimated emissions across the EU countries for summer 2022 were the highest since 2007. France, Spain, Germany and Slovenia also experienced their highest summer wildfire emissions for at least the last 20 years, with south-western Europe seeing some of the largest fires on record in Europe.”

The report says Europe experienced its hottest summer and second warmest year on record last year.

It revealed temperatures are rising in Europe at twice the global average rate — faster than any other continent.

Earlier this year Alpine ski resorts were forced to close due to a lack of winter snow.

During the winter of 2021-2022, much of Europe experienced fewer snow days than average, with many areas seeing up to 30 fewer days.

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.”

Updated: April 20, 2023, 7:55 AM