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Bill Gates: Global Warming Will Cause a Bigger Market Crash Than COVID-19

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About 81% of Canadians are concerned about global warming. Compared to that, only about 61% of U.S. citizens are aware of it and consider global warming a real threat. Even though it’s the majority, it’s low for the second-largest emitter of carbon dioxide. This is probably one reason why someone like Bill Gates has to connect the dots for people so that they understand how bleak the picture truly is.

One of the reasons people might actually start taking global warming seriously might be its economic impact. Because even though relatively fewer people know or want to know about the environment, almost everyone understands the economy or what a market crash does for an economy.

And with such a recent example of a pandemic-driven market crash in front of the world, Gates presented the true “potential” of global warming in ways that people might relate to a market crash.

A scary parallel

Bill Gates compared the coronavirus statistics with what global warming can potentially bring to humanity. The mortality rate of COVID-19 is 14 people per 100,000. And if global warming keeps rising the temperatures like this, by the end of this century, the world would see 73 people per 100,000 extra fatalities every year caused directly or indirectly by global warming.

Even if that’s not scary enough for most people, another potential corollary is that the pandemic’s economic devastation will become a regular cycle if we don’t work on the environment the way we approached the pandemic.

It might mean cyclical market crashes, regular corrections, and even recessions. If the economy is taking so much time to recover from a pandemic that peaked in different places in the world at different times, imagine what a globally uniform problem like global warming would do to the economy.

Bill Gates’s environmentally friendly Canadian stock

Bill Gates owns about US$1.5 billion worth of a very green Canadian stock, Canadian National Railway (TSX:CNR)(NYSE:CNI). The company was also listed in one of the world’s most sustainable companies in 2020, since it earned almost 81% of its revenue by transporting non-fossil fuel goods across Canada and the U.S.

Even if you don’t want to make an environmentally conscious investment decision, CNR might be a fantastic stock for your portfolio. The 24-year-old Dividend Aristocrat might not offer a very juicy yield (1.67%), but it does provide an amazing growth opportunity. It increased its market value by almost 93% in the past five years, resulting in a decent CAGR of 14%.

With a price to earnings of 23.6 times and price to book of 5.2 times, the stock is overpriced right now. But you don’t have to wait for global warming to bring the market down to make CNR affordable, because another market crash might be just around the corner. The stock fell almost 24% last time; a similar drop might make its valuation more palatable.

Foolish takeaway

Global warming is a severe threat, and not just to the economy but to humanity in general. And if its effects start to manifest earlier than predicted, and we begin to see its economic impact in a matter of decades instead of at the end of the century, a few stable investments and sizable nest eggs would undoubtedly help.

Speaking of Bill Gates...

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Fool contributor Adam Othman has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of and recommends Canadian National Railway. The Motley Fool recommends Canadian National Railway.

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