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https://www.theguardian.com/environment/2026/feb/05/flawed-economic-models-mean-climate-crisis-could-crash-global-economy-experts-warn>
"Flawed economic models mean the accelerating impact of the climate crisis
could lead to a global financial crash, experts warn.
Recovery would be far harder than after the 2008 financial crash, they said, as
“we can’t bail out the Earth like we did the banks”.
As the world speeds towards 2C of global heating, the risks of extreme weather
disasters and climate tipping points are increasing fast. But current economic
models used by governments and financial institutions entirely miss such
shocks, the researchers said, instead forecasting that steady economic growth
will be slowed only by gradually rising average temperatures. This is because
the models assume the future will behave like the past, despite the burning of
fossil fuels pushing the climate system into uncharted territory.
Tipping points, such as the collapse of critical Atlantic currents or the
Greenland ice sheet, would have global consequences for society. Some are
thought to be at, or very close to, their tipping points but the timing is
difficult to predict. Combined extreme weather disasters could wipe out
national economies, the researchers, from the University of Exeter and
financial thinktank Carbon Tracker Initiative, said.
Their report concludes governments, regulators and financial managers must pay
far more attention to these high impact but lower likelihood risks, because
avoiding irreversible outcomes by cutting carbon emissions is far cheaper than
trying to cope with them.
“We’re not dealing with manageable economic adjustments,” said Dr Jesse Abrams,
at the University of Exeter. “The climate scientists we surveyed were
unambiguous: current economic models can’t capture what matters most – the
cascading failures and compounding shocks that define climate risk in a warmer
world – and could undermine the very foundations of economic growth.”
“For financial institutions and policymakers, it’s a fundamental misreading of
the risks we face,” he said. “We are thinking about something like a 2008
[crash], but one we can’t recover from as well. Once we have ecosystem
breakdown or climate breakdown, we can’t bail out the Earth like we did the
banks.”
Mark Campanale, CEO of Carbon Tracker, said: “The net result of flawed economic
advice is widespread complacency amongst investors and policymakers. There’s a
tendency in certain government departments to trivialise the impacts of climate
on the economy so as to avoid making difficult choices today. This is a big
problem – the consequences of delay are catastrophic.”"
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
