By 2050, environmental damages could lead global economic output to decrease by 18%. Allianz Global Corporate & Specialty (AGCS) indicates in its latest report entitled “Measuring and Managing Environmental Exposure: A Business Sector Analysis of Natural Capital Risk’.

Quoting data from Trucost research group and the UN-backed Principles of Responsible Investment (PRI) network, the report shows that this percentage (18%) would represent a total of $28.6 trillion. According to AGCS, the slowdown could be linked to an increasing growth of the exposure to natural capital risks of several world economy’s key sectors (i.e. all natural resources used for goods production and ecological purposes). These include transport sector, which is a significant contributor to greenhouse gas emissions.

Moreover, the report points out that carbon emissions generated by transport sector have increased by 250% since 1970, and account for 23% of global emissions. Although the sector is less exposed to natural capital risks than others, such as oil and mining, AGCS indicates that it is more vulnerable.

The report indicates that annual climate change losses could shrink to 1% of global GDP if adequate measures are taken to reduce them. However, they could reach 5%, if governments are slow to respond to this growing phenomenon which affects economies both socially and environmentally.

Moutiou Adjibi Nourou