A recent study conducted by the UK Institute and Faculty of Actuaries, alongside scientists from the University of Exeter, has issued a stark warning regarding the potential economic fallout from climate change. The report predicts that global GDP could plummet by 50% between 2070 and 2090 if immediate action is not taken to combat climate impacts. This alarming forecast highlights that mainstream economic models have significantly underestimated the severe effects of climate change, particularly by excluding critical factors such as climate tipping points and extreme weather events [ecd63492].
The report, titled "Planetary Solvency – finding our balance with nature," emphasizes the urgent need for decarbonization and the restoration of natural ecosystems to avert catastrophic economic consequences. Lead author Sandy Trust remarked that current economic theories are akin to a "quasi-religious faith," failing to account for the risks associated with the degradation of natural systems. The actuaries warn that existing models are "precisely wrong" and do not adequately consider the risk of ruin posed by climate change [ecd63492].
Supporting these findings, the World Economic Forum's Global Risks Report 2025 identifies extreme weather and environmental risks as top concerns for the global economy. Recent extreme weather events, such as intense heatwaves in Asia and devastating wildfires in Canada, underscore the pressing need for action [ecd63492].
In the United States, the implications of climate change are particularly evident in California, where the insurance landscape is being transformed by increasing risks. Estimated losses from wildfires in Los Angeles have reached a staggering $40 billion, prompting a reevaluation of homeowners insurance policies [ecd63492].
Additionally, New York City’s recent lawsuit against major oil companies Exxon Mobil, BP, and Shell was dismissed by Justice Anar Patel, illustrating the challenges cities face in holding corporations accountable for climate-related damages [ecd63492]. The actuaries' report calls for annual risk assessments and systemic risk management to mitigate these growing threats to the economy and society [ecd63492].
As the global community grapples with the realities of climate change, the call for decisive policy action has never been more critical. Without it, the economic consequences could be catastrophic, affecting livelihoods and the stability of economies worldwide [ecd63492].