Climate change could cut global financial assets by $2.5 trillion, report finds
Image: REUTERS/NASA/Michael Studinger
Climate change could wipe $2.5 trillion off the value of global assets, according to a new set of economic models.
The study assesses the impact of climate change on the present value of global financial assets. Under a business-as-usual emissions path, this could cut $2.5 trillion off their value. However, under a worst-case scenario this could rise to $24.2 trillion.
The authors of the study highlight that climate action is not just imperative for the environment, but also our economy. “Limiting warming to no more than 2 degrees Celsius makes financial sense to risk-neutral investors – and even more so to the risk averse.”
The risk of climate change
The World Economic Forum’s Global Risks Report 2016 named climate change as one of the biggest risks to life on earth.
This study, published in the journal Nature, further highlights the risks posed by failing to limit global warming.
The business-as-usual scenario sees global temperatures increase to 2.5 degrees Celsius above pre-industrial levels by 2100. The study makes clear the significant losses this could cause – up to $24.2 trillion – and is another reminder of the need for urgent climate action.
Why we need to tackle climate change now
February 2016 was the hottest month on record, with NASA data showing global surface temperatures were 1.35 degrees Celsius above the long-term average.
Failing to tackle these rising temperatures could have dramatic consequences for all of us.
Christiana Figueres, the Executive Secretary for the United Nations Framework Convention on Climate Change, and Achim Steiner, Executive Director the UN Environment Programme, have highlighted the risk of failing to act.
“The need for urgent, concerted action cannot be emphasized enough. Any delay will cause negative consequences to continue to accumulate. This will not only cause tremendous suffering, especially to the world’s most vulnerable people; it will reverberate for decades to come,” they wrote.
Don't miss any update on this topic
Create a free account and access your personalized content collection with our latest publications and analyses.
License and Republishing
World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.
The views expressed in this article are those of the author alone and not the World Economic Forum.
Stay up to date:
Future of the Environment
Related topics:
The Agenda Weekly
A weekly update of the most important issues driving the global agenda
You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.
More on Climate ActionSee all
Anja Eimer
November 1, 2024