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CLIMATEWIRE | Top Wall Street institutions are preparing for a severe future of global warming that blows past the temperature limits agreed to by more than 190 nations a decade ago, industry documents show.

The big banks’ acknowledgment that the world is likely to fail at preventing warming of more than 2 degrees Celsius above preindustrial levels is spelled out in obscure reports for clients, investors, and trade association members. Most were published after the reelection of President Donald Trump, who is seeking to repeal federal policies that support clean energy while turbocharging the production of oil, gas, and coal — the main sources of global warming.

The recent reports — from Morgan Stanley, JPMorgan Chase and the Institute of International Finance — show that Wall Street has determined the temperature goal is effectively dead and describe how top financial institutions plan to continue operating profitably as temperatures and damages soar.

“We now expect a 3°C world,” Morgan Stanley analysts wrote earlier this month, citing “recent setbacks to global decarbonization efforts.”

The stunning conclusion indicates that the bank believes the planet is hurtling toward a future in which severe droughts and harvest failures become widespread, sea-level rise is measured in feet rather than inches and tropical regions experience episodes of extreme heat and humidity for weeks at a time that would bring deadly risks to people who work outdoors.

The global Paris Agreement, from which the U.S. is withdrawing under Trump, aims to limit average temperature increases to well below 2 degrees Celsius. Scientists have warned that permanently exceeding 1.5 degrees — a threshold the world breached for the first time last year — could lead to increasingly severe climate impacts, such as the demise of coral reef ecosystems that hundreds of millions of people rely on for food and storm surge protection.

Morgan Stanley’s climate forecast was tucked into a mundane research report on the future of air conditioning stocks, which it provided to clients on March 17. A 3 degree warming scenario, the analysts determined, could more than double the growth rate of the $235 billion cooling market every year, from 3 percent to 7 percent until 2030.

“The political environment has changed, so some of them are conforming to that,” Gautam Jain, a former investment banker who is now a senior research scholar at Columbia University, said of Wall Street’s increasingly dire climate projections. “But mostly it is a rational business decision.”

The new warming estimates come as heat-trapping gases continue to rise globally and as international commitments to limit the burning of oil, gas, and coal, that’s responsible for the bulk of emissions, have stalled. Meanwhile, megabanks like Wells Fargo are backsliding on their previous climate pledges and exiting from the Net-Zero Banking Alliance, a United Nations-backed group that encouraged members to slash their emissions in line with the Paris Agreement.

Morgan Stanley, which in October watered down its climate-related lending targets, declined to comment.

Betting on potentially catastrophic global warming is both an acknowledgment of the current emissions trajectory and a politically savvy move in the second Trump era, according to Jain.

“Nobody wants to be seen as going against,” the administration’s pro-fossil-fuel energy policy, he said. “These banks are businesses, so they have to look at the risk that they have in their portfolio and the opportunities that they see in the most likely environment.”

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