Global economic losses from extreme weather could reach $5 trillion: Lloyd’s

Global economic losses could reach US$5 trillion in the event of a “plausible increase” in climate-related extreme weather events. climate change causing crop losses and food and water shortages, the insurer said Wednesday Lloyd’s From london.

Lloyd’s, which carried out the research alongside the Cambridge Center for Risk Studies, stressed that its “systemic risk scenario”, which models the global economic impact of extreme weather events, is hypothetical.

However, he assured that the work will improve companies’ and policymakers’ understanding of their exposure to critical threats such as extreme weather conditions.

By adjusting the US$5 trillion in estimated losses over a five-year period to the probability of these events occurring extreme weather eventsprojected global economic losses amounted to $711 billion, according to Lloyd’s.

“The World economy “It is increasingly complex and increasingly subject to systemic threats.”said Trevor Maynard, executive director of Systemic Risk at the Cambridge Center for Risk Studies.

Impact

According to him, the investigation “will help companies and policymakers explore the possible repercussions of these scenarios.”

Lloyd’s modeled global economic losses from extreme weather events by estimating the impact of food crises and water in the world Gross Domestic Product over a period of five years.

The weighted average loss in the three severity levels (severe, severe and extreme) was US$5 trillion over five years, from US$3 trillion in the least severe scenario to US$17.6 trillion in the most extreme.