Climate and food will shape future

It seems hard these days to strike up any conversation with professionals in the financial markets without an undertone of manic depression, which may in itself be a sign that the cycle is about to turn. The best rule in markets is always to remember that booms never last, but neither do busts.

The second rule is that long-term trends matter more than short-run cycles (as long, of course, as you survive the cycles).


Let me pick out two long-run trends that are running even more strongly than previously thought. The first is the shift to a sustainable, carbon-free economy with all that implies for energy and transport businesses.

At present, there is growing evidence that global warming is proceeding at a more alarming pace than previously forecast. But there is also evidence of a more rapid political response. Both mean the economic consequences will accelerate.

The second trend is in soft commodity prices, which have turned a corner that is likely to be not merely cyclical but possibly the most fundamental change since the beginning of the industrial revolution. For decades, real food prices have been falling as the gains in farm productivity