Global warming would put “trillions of dollars” of the world’s financial assets at risk.
An average of $2.5 trillion (£1.72tn) would be affected from the impacts of climate change by 2100, a new report claims.
That’s 1.8% of the world’s financial assets, according to the Grantham Research Institute on Climate Change and the London School of Economics and Political Science and Vivid Economics.
However, it also revealed there is a 1% chance that a 2.5°C global warming could threaten $24 trillion (£16.5tn) of global financial assets during the same period.
Limiting warming to 2°C in 2100 would “significantly” reduce the ‘climate Value at Risk’, the researchers found.
The figure would be $1.7 trillion (£1.17tn), with 1% chance of $13.2 trillion (£9.1tn) being at risk.
Professor Simon Dietz, Lead Author of the report said: “Our results may surprise investors but they will not surprise many economists working on climate change because economic models have over the past few years been generating increasingly pessimistic estimates of the impacts of global warming on future economic growth but we also found that cutting greenhouse gases to limit global warming to no more than 2°C substantially reduces the climate Value at Risk, particularly the tail risk of big losses.”