Experts warn of catastrophic losses to global GDP in coming years: 'Risks to future human prosperity'
According to a new British study, the economic impact of rising global temperatures may be far worse than previously anticipated. The Institute and Faculty of Actuaries (IFoA) found that, in the worst-case scenario, the global GDP could halve by the end of the 21st century.
The report's lead author, Sandy Trust, warned that political leaders are not taking the potential consequences of global warming seriously enough. According to Trust, as relayed by the Guardian, other risk assessments failed to account for potential outcomes such as igniting global conflicts, mass migration, and rising sea levels.
In simple terms, the prospect of planetary insolvency caused by unchecked ecological damage is understated. As a result, political leaders are making policy decisions based on an incomplete grasp of the facts.
As the report says, according to the Guardian: "They are precisely wrong, rather than being roughly right."
A problem cannot be solved unless it is fully understood, and the IFoA report expressly outlines the challenges that lie ahead.
The report found that warming above 2 degrees Celsius (3.6 degrees Fahrenheit) will lead to several climate tipping points, including massive loss of life, the destruction of ecosystems, and the breakdown of nation states. Even if the 50% loss of GDP figure isn't realized, a 25% contraction of the world's economic output would still be a catastrophic outcome for global prosperity.
Framing the issue in economic terms makes a compelling case for otherwise skeptical political leaders. Moreover, a worldwide issue cannot be solved with parochial thinking. As the report says, overcoming it will require nothing short of a global paradigm shift. It will be difficult, but the problem is not insurmountable.
The report offers multiple recommendations for tackling the problem. The most notable is the creation of a Planetary Solvency risk dashboard to provide actionable guidance for political leaders to make sound policy choices. Additionally, the report calls for further international cooperation and oversight to meet the challenge.
While the picture painted by the report lays out the risks in stark terms, there is some cause for optimism if their recommendations are taken seriously. If the terms of the Paris Agreement are actually met, the worst of the climate shocks could stabilize later in the century, according to at least one study.
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Of course, that's a pretty big "if," and, as Trust explained to the Guardian, the stakes could not be higher: "Nature is our foundation, providing food, water and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity which we must take action to avoid."
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