This is not new. But climate scientists are forecasting things will get a lot worse a lot sooner than many mainstream economic models predict, according to Lauro.
Concerns around the growing impact of physical risks associated with global warming call for a more in-depth analysis of their potential economic consequences, writes Irene Lauro, environmental economist at Schroders.
Global average surface temperature rose by 1.45°C above pre-industrial levels in 2023, making the year the warmest on record. As global warming intensifies, extreme weather events have become more frequent and their economic damage more significant, says Lauro in a note released June 20. “With climate change becoming a more pressing issue, it is extremely important for investors to understand its impacts on the economy when making asset allocation decisions.”
