Our directory of things of interest

University Directory

Grappling with climanomics in a warmer world

  • Written by  Marco Magrini
  • Published in Climate
Grappling with climanomics in a warmer world
11 Feb
2019
Marco Magrini looks at the financial pressures spilling out into the world’s environment

Last year, an army of yellow-dressed civilians rebuffed the French plan to raise the price of petrol, a policy that was intended to discourage fossil fuel consumption in accordance with the Paris agreement on climate change. At around the same time, 13 US federal agencies unveiled a report that predicts a very grim future for the late-century American economy, due to a predicted growth in the number of hurricanes, floods, droughts and wildfires. How can we give up on oil and coal without disrupting the economy (and social order)? Shouldn’t we invest millions today to save billions tomorrow?

Voters and politicians alike seem to favour a short-term approach that, at least where the climate is concerned, is definitely a mistaken one. The few who look into the future by trade, such as scientists and reinsurers, argue that we should act more now and regret less later. Reinsurance companies, those who insure insurers, are scared. Swiss Re, the world’s second biggest reinsurer, estimated $337billion losses from natural and man-made disasters in 2017, a third of which were insured. Not only are these disasters projected to increase with rising temperatures, but AXA, the French insurer, has added that above a certain threshold (4°C of warming) just about everything will be ‘uninsurable’.

A 4°C increase may seem far-fetched. The planet’s mean temperature has risen by 1°C since the Industrial Revolution. The Paris Agreement vowed not to exceed the ‘dangerous level’ of 2°C. However, the Intergovernmental Panel on Climate Change recently warned that a 4°C spike could be reached by the end of the century with some ease – simply not swaying from the current track will be enough. 

No wonder then that Mark Carney, governor of the Bank of England, has suggested adding climatic risks to annual stress tests for banks, at least to make them aware of the troubles they may incur from climate issues, such as financing a coal plant that is doomed to be shut down before its typical lifetime.

States, financial and industrial companies have to readjust their business plans, at least those based on long-term thinking. But families and individuals will also have to do the same. Before buying a new house by the beach, as with almost any other investment, civilians now need to grapple with climanomics.

This was published in the February 2019  edition of Geographical magazine

geo line break v3

Free eBooks - Geographical Newsletter

Get the best of Geographical delivered straight to your inbox by signing up to our weekly newsletter and get a free collection of eBooks!

geo line break v3

Related items

NEVER MISS A STORY - Follow Geographical on Social

Want to stay up to date with breaking Geographical stories? Join the thousands following us on Twitter, Facebook and Instagram and stay informed about the world.

More articles in NATURE...

Oceans

Many scientists believe that jellyfish numbers are increasing, pointing to…

Geophoto

Prepare to be inspired, startled and filled with awe in…

Climate

Excessive use of nitrogen-based fertilisers is contributing to numerous environmental…

Energy

A group of scientists from Edinburgh University has come up…

Geophoto

​This year’s winning environmental photographs show the impacts of the…

Wildlife

A WWF report has revealed that global forest vertebrate populations…

Climate

Yesterday saw one of the biggest public protest movements in…

Climate

On the eve of millions of world citizens going on…

Wildlife

Around 75 million birds are kept as pets in Indonesia,…

Wildlife

Migratory animals are actively adjusting their traditions to cope with…

Climate

How many trees can you plant in a day?

Polar

New analysis of NASA data has led to the discovery…

Climate

Naomi Klein is back and calling for a new world…

Geophoto

The move away from film has meant more pictures being…

Oceans

As the ocean looks set to get busier due to…

Climate

A report details how tropical storms are fuelling the rise…

Wildlife

After years of trials, talks, tweaks and test runs, EarthRanger…

Climate

Nationalism might gain political points in certain parts of the…

Geophoto

With guaranteed sunshine, bright blue skies and not a hint…

Oceans

A review of coral-saving methods is helping communities decide which…