A recent risk assessment by the Network for Greening the Financial System (NGFS), a global network of central banks, has highlighted a stark reality: the physical shocks caused by climate change could slash global economic growth by up to a third.
The report, published this week, warns that floods, droughts, rising temperatures, and the costs of mitigating and adapting to extreme weather could have a devastating impact, on the global economy, with projected losses now at a significantly higher scale than before.
The NGFS’s revised estimate is based on cutting-edge climate and economic data, offering more detailed insights into the potential physical risks.
This new modeling reveals an alarming increase in the damage climate change could inflict, with economic losses projected to reach a staggering 33% of global GDP by the end of the century if global temperatures rise by 3°C.
This marks a significant leap from earlier predictions, which estimated the damage at just 6%.
New climate models show a drastic increase in economic damage risks from global heating.However, experts warn that this estimate may still be far too conservative.
Sandy Trust, an actuary specializing in sustainability, cautioned that the NGFS report fails to account for several critical factors, including climate tipping points.
Such as the melting of the Greenland ice sheet and the destruction of the Amazon rainforest which could trigger irreversible changes in the climate system.
Moreover, issues like sea temperature rises, mass migration, conflict, and biodiversity loss remain unaddressed.
While the new assessment provides a more comprehensive view of the risks, Trust argues that it still underestimates the true extent of the danger, comparing it to a Titanic model where the iceberg is visible.
But the true consequences are not fully acknowledged.
As global heating accelerates, experts stress the importance of preparing for even more severe economic impacts than, currently predicted.