Climate change effects could cost investors $4 trillion in assets, report warns

Maria Galluci in the International Business Times: Private investors risk losing more than $4 trillion in assets due to the devastating effects of climate change. Rising sea levels, intense flooding and more severe storms threaten to wipe out or diminish portfolios due to property damage, weaker growth and lower asset returns, the Economist Intelligence Unit said in a report Friday.

Assets at stake amount to roughly one-fourth of U.S. gross domestic product. The number could swell to nearly $14 trillion if the Earth’s temperatures warm by a staggering 6 degrees Celsius (10.8 degrees Fahrenheit) compared to the pre-industrial era. From the public-sector perspective, extreme warming represents value losses of $43 trillion, or 30 percent of the entire stock of the world’s manageable assets, the report said.

“Institutional investors need to assess their climate-related risks and take steps to mitigate them; very few have begun to do this,” the report said.

Climate scientists say the world is on track to warm by at least 2 degrees Celsius (3.2 degrees Fahrenheit) by 2050 if countries don’t take dramatic steps to reduce greenhouse gas emissions from power plants, tailpipes and buildings. Even lesser degrees of warming will have dire consequences for the world’s food supplies, coastal communities and human health....

2008 flooding from Hurricane Ike in Key West, Florida, National Guard photo