Global GDP to fall by 50 percent between 2070 and 2090 due to Climate Change
If urgent steps are not taken to restore biodiversity and reduce carbon emissions, global GDP could fall by up to 50 percent between 2070 and 2090.
The London-based Institute and Faculty of Actuaries, UK, has warned in a research report. This information was reported by the British newspaper “The Guardian.”
Risk management experts at the Institute and Faculty of Actuaries have warned. According to their published report, the level of risk to the global economy will increase significantly due to disasters such as wildfires, floods, droughts, temperature increases and landslides caused by climate change.
The Institute and Faculty of Actuaries published this report jointly with scientists from the University of Exeter.
According to data from the European Union’s Copernicus Climate Change Service, the annual average global temperature exceeded the internationally agreed limit of 1.5 degrees Celsius for the first time in 2024. This has led to more extreme weather events.
The Institute and Faculty of Actuaries report said that unless action is taken to reduce carbon emissions rapidly, remove carbon from the atmosphere and restore nature, the global economy will likely suffer its worst possible blow in the two decades before 2090.
If global temperatures rise by 3 degrees Celsius or more by 2050, it could lead to the deaths of 4 billion people, political divisions, state collapse and a massive loss of economic wealth. Some species may even be at risk of extinction.
“There is no realistic plan to avoid this scenario,” said Sandy Trust, the report’s lead author.
“Economic projections that predict a 3-degree rise in temperature will result in only 2 percent of global output are wrong,” she added. “These projections are blinding policymakers to the real risks.”
The report also noted that the risk assessment methods used for economic analysis are flawed. It does not adequately address the serious impacts of climate change, such as rising sea levels, migration and conflict.
It says, “Without a proper assessment of these risks, the world risks reaching a point where nature’s service systems are so degraded that people can no longer receive the basic services they need.”
The trust added, “An economy cannot exist without a society, and a society needs a habitable environment to survive. Nature is our foundation, providing food, water, air and the raw materials and energy needed for our economy. If the stability of this foundation is compromised, the future prosperity of human society will be threatened.”
The report, titled “Planetary Solvency—Finding Our Balance with Nature,” is a sharp criticism of current economic theory. The report says that this theory emphasizes only the extraction of resources for people, without considering the impact of the damage to nature on society and the economy.
The report calls on political leaders to adopt a new policy. It says, “World leaders must understand the need for this change. These extreme risks should inform policy decisions.’
The report proposes a new risk assessment dashboard that will help policymakers manage human activities within the Earth’s boundaries.
Professor Tim Lenton of the University of Exeter and co-author of the report said: “Current approaches are failing to adequately assess the increasing risks.”
“Planetary Solvency Risk uses the methodology of professional risk analysts to analyse our livelihoods and show that they are at risk. It provides a clear roadmap for understanding global risks and taking action, he added.
