“Economic collapse and then global warming will catch us off guard, experts fear.”
Severe weather events can leave a large bill and are not always evenly or predictably distributed. Heavy economic losses in the U.S. from weather events in 2011 show that the cumulative cost of several disasters can add up, a growing concern as our climate becomes more volatile.
Experts perceive “major systemic economic failure” and “failure of climate change adaptation” as two of the most systematically critical global risks for the next ten years, says the World Economic Forum (WEF) in its annual Global Risks Report. Finding that environmental and economic systems are highly correlated and interdependent, the report highlights the relationship in a case section titled “Testing Economic and Environmental Resilience.” Referencing a 2011 Mercer study, the report estimates that climate change will cumulatively issue a $2–$4 trillion blow to global health and infrastructure investments by 2030. So far, international policies have committed only $100 billion for adaptation and damage costs.
WEF’s survey respondents often rated economic and environmental risks as highly correlated, and mapping these connections revealed one of the clearest “constellations.” As both systems show signs of decline, experts worry the relationship spells disaster.
A network analysis—where relationships between risks were determined by experts rating pairs of challenges as highly interconnected—revealed that declining economic and environmental systems are correlated. WEF says this correlation currently manifests itself in a daunting negative feedback loop (a vicious cycle of problems reinforcing one another). Efforts to avert climate change are hindered by limited public resources, but the longer decision-makers wait, the more it will cost. The report notes the increasing difficulty of implementing international climate-change mitigation agreements since the economic slow-down. The report points to the private sector as an untapped source of funding and innovation. In the U.S., where 80% of the nation’s critical infrastructure is in private hands, public-private collaboration will be essential to protecting the nation’s assets, according to the report.