Monday numbers: A closer look at a giant insurance company’s dire warning about climate and the economy

By: - April 26, 2021 6:00 am

A new report issued by “Swiss Re” – that’s the name by which the venerable Fortune 500 firm, Swiss Reinsurance Company, Ltd., is known – includes dire new warnings about climate change and what it will mean for the global economy in the years ahead.

The report, which was highlighted in an April 23 story by reporter Jasmine Garsd for the news outlet Marketplace, tells a sobering tale of the enormous problems we can expect in the coming decades as a result of rising global temperatures – especially if humanity doesn’t  immediately — and dramatically — reduce greenhouse gas emissions.

This from Garsd’s story:

A new report from Swiss Re, one of the largest insurance providers in the world, issues a dire warning about climate change: that rising temperatures, higher sea levels, falling crop yields, and wildfires are all likely to reduce global wealth significantly by 2050. According to the report, climate change could eliminate as much as 14% of the global economic output in the space of 30 years.”

The Swiss Re report shines a bright spotlight once again on the fact that warnings about the climate emergency are not just emanating from environmental groups with altruistic motivations. The new report makes clear that climate change will have big impacts on the economy and cost lots and lots of businesses lots and lots of money. Indeed, Garsd reports, the new study has motivated the company to change its pricing model in response:

Professor Andrew Hoffman at the University of Michigan said that Swiss Re’s changes are likely to be followed by other insurers. It shows that climate change isn’t about politics, Hoffman said, it’s about reality. ‘An insurance company doesn’t have a political dog in this fight,” he said. “They’re just looking at the numbers.'”

But, of course, developments like this should come as no surprise. Notwithstanding the absurd denials from conservative American politicians, talking heads and propaganda outfits, a wide array of major corporations has been forecasting destructive impacts to their profits from climate change (and urging action to combat it) for decades. This even includes giant energy companies like BP and Chevron.

Indeed, even under the Trump administration, the U.S military was taking steps to prepare for what promises to be a massive impact on its assets, the demands on its services and its ability to respond.

In short, the Swiss Re report sends yet another loud and clear message that: a) it is utterly irresponsible to deny the reality of the climate emergency, and b) urgent action of the kind outlined by President Biden last week (including a 50%-52% reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030 and a switch to 100% carbon pollution-free electricity by 2035) is truly an existential matter for the human species and global sustainability.

Here are some of the numbers from the report:

48 – number of countries “stress tested” in the study

90% – share of the global economy represented by those nations

-18% – economic decline (as measured by a falloff in GDP) by 2050 if no mitigating actions are taken to address the crisis and global temperatures increase by 3.2 degrees Celsius, or 6.3 degrees Fahrenheit

-14% – the decline if some mitigating actions are taken and temperatures increase by 2.6°C, or 4.6°F

-11% – the decline if further mitigating actions are taken and temperatures increase by 2°C, or 3.6°F

-4% – if Paris Agreement targets are met and the temperatures increase by less than 2°C

-24% – projected negative impact on the Chinese economy if no mitigating actions are taken

-10% – projected negative impact on the economies of the U.S., Canada and the U.K.

-11% – projected negative impact on Europe

+10% – amount projected that must be added to the global infrastructure budget to achieve the target in the Paris Accords (a rise of less than 2°C)

10 billion – projected world population in 2050

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Rob Schofield
Rob Schofield

Editor Rob Schofield oversees day-to-day newsroom operations, authors regular commentaries, and hosts a weekly radio show/podcast.