February 17, 2020
Extreme weather has the potential to trigger an economic recession worse than anything else in human history, experts warn.
Current financial markets do not account for the risk posed by horrific natural disasters such as floods and droughts.
As a result, investors are at risk of a sudden correction and crash which devastates the global economy unless unless action is taken to mitigate its impact.
Researchers believe a disaster-induced crash would dwarf the infamous Great Depression and 2008’s Great Recession and be the worst economic meltdown ever.
Study author Professor Paul Griffin, of the University of California’s Davis Graduate School of Management, said: ‘If the market doesn’t do a better job of accounting for climate, we could have a recession – the likes of which we’ve never seen before.’
He explained that the central message in his latest research is that there is too much ‘unpriced risk’ in the energy market.
Professor Griffin said: ‘Unpriced risk was the main cause of the Great Recession in 2007-2008.
This article was posted: Monday, February 17, 2020 at 5:53 am