Heat waves tell only part of a larger tale. Fires are on the rise, floods are increasing in number and droughts are becoming more expensive ' and by most conventional reckoning, financial markets should be adapting to that fact. In pockets, they are. But zoom out and it becomes clear the broader picture is reversed: capital is still flowing towards the activities that create this risk more quickly than it's flowing toward protecting against it, real-world damage is multiplying faster than the balance sheets are adjusting for it and the lag between physical risk and financial price is (rather than a chasm) getting wider. The macro number beneath it all. Before breaking out the fire and drought in general, it needs to be considered in the larger sense. A study by the Potsdam Institute for Climate Impact Research, published in Nature discovered that climate damage already baked in with previous emissions will reduce global GDP by about 19% by 2049 compared with a world without...
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