Study Finds Trillions Of Dollars Of Global Financial Assets At Risk From Climate Change
New study estimates global warming of 2.5 centigrade degrees by 2100 would put at risk trillions of dollars of world’s financial assets
An average of US$2.5 trillion, or 1.8 per cent, of the world’s financial assets would be at risk from the impacts of climate change if global mean surface temperature rises by 2.5°C (4.5°F) above its pre-industrial level by 2100, according to a new paper by researchers at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science and Vivid Economics, which is published today (4 April 2016) in the journal ‘Nature Climate Change’.
However, the authors, Simon Dietz, Alex Bowen, Charlie Dixon and Philip Gradwell, found that uncertainties in estimating the ‘climate Value at Risk’ mean that there is a 1 per cent chance that warming of 2.5°C could threaten US$24 trillion, or 16.9 per cent, of global financial assets in 2100. The authors point out that these sums are larger than the estimates of US$5 trillion for the total stock market capitalisation of fossil fuel companies today.
Limiting warming to 2°C (3.6°F) in 2100 would significantly reduce the ‘climate Value at Risk’, the researchers found. The average value of global financial assets at risk would be US$1.7 trillion, with 1 per cent chance of US$13.2 trillion being at risk.
FAQs