A recent report highlights an alarming scenario: global economic growth could face a dramatic decline of 50% between 2070 and 2090. The cause is the climate shocks that could have far-reaching repercussions. Experts, particularly from the Institute and Faculty of Actuaries, emphasize the urgency for political leaders to take decisive action to decarbonize the economy and restore nature. This report echoes growing concerns about the impact of the global climate crisis and calls for accelerated action to prevent such an economic downturn.
A recent report issued by the Institute and Faculty of Actuaries (IFoA), in collaboration with scientists from the University of Exeter, warns that global economic growth could fall by 50% between 2070 and 2090. This dramatic decline would be caused by catastrophic climate shocks such as fires, floods, droughts, and the destruction of nature. The report calls for urgent action from political leaders to accelerate decarbonization and restore nature, emphasizing that if nothing is done, the risk of reaching a temperature of 3°C or more by 2050 could lead to devastating social and economic effects, including the death of over 4 billion people and significant sociopolitical fragmentation worldwide.
The risks related to climate shocks on the global economy
Climate shocks represent a growing threat to the global economy. A recent report from the Institute and Faculty of Actuaries (IFoA) warns that economic growth could collapse by 50% between 2070 and 2090. This projection is directly linked to potential devastating impacts such as fires, floods, droughts, rising temperatures, and the degradation of nature.
The study emphasizes the urgent need for immediate political action to both decarbonize and restore nature. Experts believe that without this shift, the global economy could suffer irreversible losses. Extreme climate phenomena, which already pushed the global temperature beyond the critical threshold of 1.5°C in 2024, will only worsen the situation if no action is taken quickly.
The geopolitical and societal consequences of climate change
The study warns that an increase of 3°C or more could lead to over 4 billion deaths. Furthermore, this could cause significant global sociopolitical fragmentation, the potential collapse of states, and even extinction events. This situation would jeopardize not only the economy but also the global social fabric, with rapid, lasting, and significant capital losses, exacerbating the risk of conflicts and mass migrations.
An urgent call to action and a paradigm shift
The IFoA report, in collaboration with scientists from the University of Exeter, calls for a radical revision of current economic policies that overlook these risks. Sandy Trust, the lead author of the report, states that current economic forecasts significantly underestimate the damages. While most global policies focus on the exploitation of natural resources, it is crucial to understand that nature is the foundation of our economy. This outdated approach needs to change as soon as possible to reverse the current trend.
