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."

"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."

"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."

Current economic models used by governments and financial institutions miss catastrophic climate shocks and instead assume gradual slowing of growth from rising average temperatures. The models assume future patterns will resemble the past despite fossil fuel-driven changes pushing the climate into uncharted territory. Climate tipping points, including collapse of Atlantic currents or the Greenland ice sheet, could trigger global consequences and may already be near thresholds with unpredictable timing. Cascading failures and compounding extreme weather events could wipe out national economies and precipitate a global financial crash harder to recover from than 2008. Preventing irreversible outcomes through emissions cuts is far cheaper than coping.

Read at www.theguardian.com