The threat of climate change on the world economy

Climate change could wipe out €2.18 trillion worth of financial assets. This is the estimate of the study carried out by professors from the London School of Economics whose results have been published in the journal Nature. In the worst scenario contemplated by the model, the loss would skyrocket to 21 trillion euros, which is equivalent to 17% of the world’s assets, ruining the world economy. On the other hand, if the objective of the Climate Summit is met of Paris if the temperature does not exceed 2 degrees compared to pre-industrial levels, the loss of assets would be 275 million euros less than the estimate of 2.18 trillion, even taking into account the cost of efforts to reduce emissions.

Already last January the World Economic Forum warned about climate change as the greatest potential threat to the global economy, but according to states study lead author Professor Simon Dietz, awareness is still low among investors in the financial sector. Dietz adds that “there is no scenario in which the risk on financial assets is not affected by climate change.”