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What is the cost of Climate Change?


According to estimates, the total cost of returning to the 1.5 - 2 degrees reduction scenario by 2050 is between USD 25 and 30 trillion.


To have a comparative idea, this is less than what the global economy pays to subsidise fossil fuels or much less than what is spent on military armaments. It is also about 20 times less than the global wealth of stock market securities and financial derivatives, those that shook the global economy in 2008 with toxic bonds and derivatives. In a different perspective, it seems that "money is there"!


The estimates vary per source. A reasonably average base case suggests that we should account for a reduction of 50-70 billion tons of CO2e per year and that the cut of one (1) ton will cost approximately 60-100 US$. The estimates are safer for the period to 2030 which is the 1st major milestone of climate change mitigation actions performance. Beyond this point, estimates are highly speculative and will depend on progress and results to the year 2030.


The global benefit of this investment is expected to be in the order of $145 trillion, in the period from today to 2050, i.e. it will have a return of about 400%. This figure of $145 trillion, the opportunity cost has not been calculated if we do not act to address climate change and allow any expected disasters to occur, which will be simply incalculable! If the Planet's temperature rises 2-3-4 degrees, we are talking about untold trillions in damages and restoration actions. According to the New Climate Economy Report, issued in 2018, bold climate action could yield a direct economic gain of US$26 trillion through to 2030 compared with business-as-usual—a conservative estimate.


One may ask the question: what kind of benefits are there from the “dangerous” rise of temperatures? Well, there will short-term and long-term benefits from global warming. One example is the mortality from heat waves may be off-set by the mortality from cold waves, since countries like Canada will face milder winters with less illnesses from cold. The Arctic Sea will be navigable in some summer months of the year, thus decreasing the time and cost of transportation from S.E. Asia ports to Europe, Farmers will increase yield by extending crop periods. In addition, new jobs will be created and industries will change production and distribution methods to newer – less costly one. The same Report also finds that taking ambitious climate action could generate over 65 million new low-carbon jobs in 2030, equivalent to today's entire workforces of the UK and Egypt combined, as well as avoid over 700,000 premature deaths from air pollution compared with business-as-usual.

The above estimates are a result of a compilation prepared by RiskClima scientists, based on several sources for the purpose of demonstrating the capacity of RiskClima to quantify Risks and put their mitigation in perspective.


RiskClima helps you do for your business similar mathematics as above up to 2050 in order to quantify Risks and determine Mitigation Actions.

We have in mind that a disaster may last a few minutes of an hour, but it may take decades or never to be recovered, apart from the incalculable number of human lives, on a planet where, for the first time in human history, 50% of the population lives in urban centres with inadequate infrastructure and with absolute vulnerability to natural forces.


In essence, by committing today about half of an annual world's GDP, we are taking the necessary steps to ensure that this investment will return twice its value in the next 15 years or so until 2040, 10 years before the net-zero target.


RiskClima may help your organisation in doing the respective similar mathematics as above, that almost every business has to do for itself in the period up to 2050 ! For example, what is your cost of a potential climate risk and what benefits you may enjoy if properly managed to mitigate the risk in the planning horizon.

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