The Cost of Inaction 2024

Climate hazards will increasingly disrupt our way of living TABLE 1 Note: RCP 8.5 scenario represents a high-emissions “business-as-usual” scenario characterized by sustained increases in greenhouse gas emissions; FTE = full-time equivalent. Sources: 1. University of Cambridge, 2. European Environment Agency, 3. NASA, 4. De Lellis, P . et al. and New York University, 5. Bloemendaal, N. et al., 6. Hotspot Fire Project, 7. Fischer, E. et al., 8. Multiple sources estimate 55,000-72,000 death toll, 9. Alfieri, L. et al., 10. World Meteorological Organization (WMO), 11. Naumann, G. et al., 12. World Bank, 13. Kulp, S. et al., 14. National Geographic, 15. Budiyono, Y. et al., 16. Bloemendaal, N. et al., 17. Lenzen, M. et al., 18. United Nations Environment Programme (UNEP), 19. BBC. Some regions will suffer more than others Although contributing the least to global warming, low- and middle-income countries will generally be hit hardest (see Figure 4). These countries face the highest average risk of extreme weather; but compounding this risk, they have economies that are more dependent on vulnerable activities such as outdoor manual labour and agriculture, their infrastructure tends to be weaker and they have fewer resources to invest in adaptation. In Sub- Saharan Africa, for example, 160 million people already live with water scarcity today;11 this is expected to worsen as warming intensifies. At the same time, vulnerable rainfed agriculture currently covers 95% of cultivated land and accounts for 10% to 70% of the GDP of most local economies.12 However, developed nations will also be increasingly affected. In the Southwest of the United States (US), rising temperatures and more frequent droughts are expected to increase competition for water resources, affecting cities, agriculture and energy production, while the Southeast is likely to be hit by more regular storms and floods, becoming a threat to life and infrastructure and depreciating values of real estate.Today, five Earth systems are at immediate risk of tipping into irreversible decline, accelerating warming on a planetary scale (see Figure 5):13 these include the melting of the Greenland and West Antarctic ice sheets, the thawing of boreal permafrost, the extinction of warm-water coral reefs and the standstill of the North Atlantic subpolar gyre (part of the Atlantic Meridional Overturning Circulation or AMOC), which plays a vital role in regulating the climate of Western Europe as well as global weather patterns. When global temperatures surpass 1.5°C above pre-industrial levels, irreversible warming will become a reality as some of the Earth’s landscapes turn into net emitters of carbon (such as permafrost) or accelerators of heating (such as the loss of sea ice). The World Economic Forum publication Business on the Edge: Building Industry Resilience to Climate Hazards provides a detailed briefing on Earth system tipping points14 and their implications for business risk across landscapes, supply chains and societies. In this new era of the Anthropocene, the warming triggered over the coming decades will shape Earth’s climate for millennia (see Figure 6), making it a global imperative to understand and respond to Earth systems disruption. Rainfed agriculture covers 95% of cultivated land and accounts for 10%-70% of the GDP of most local economies.A glimpse of 2050 Global scientific projections Socio-economic impact Extreme heat300m+ people could be affected by heatwaves in India11-in-1,000-day hot extremes 5x as likely with 0.85°C warming7~60k deaths in European heatwave (2022)8 Flood5x increase in annual flood losses expected in EU270% of population could face 5x surge in flood impacts at +4.0°C92021 flooding losses were $18.4bn in China & $3.2bn in India10 Drought80% chance of decade-long droughts in the US starting 20503Current 1-in-100-year droughts could occur every 2-5 years11Food lost to drought can feed 81m people daily12 (= population of Germany) Sea-level rise~1.3m Bangladeshis could forced to migrate due to sea-level rise4Global mean sea level expected to rise 1m by 100 per RCP8.513Jakarta is sinking ~28 cm yearly14 & facing $186m p.a. in flood damage15 Storm3x increase in annual probability of typhoons in Tokyo5Hurricane frequency could double by 205016~8,500 FTE jobs & $1.5bn of value lost in Cyclone Debbie (2017)17 Wildfire~35% increase in area burnt yearly by bushfires in Sydney6Wildfires likely to increase by a third18Canadian wildfires displaced 230k people & claimed 8 lives (2023)19 Today, five Earth systems are at immediate risk of tipping into irreversible decline, accelerating warming on a planetary scale. The Cost of Inaction: A CEO Guide to Navigating Climate Risk 10