Global GDP could plummet by as much as 50% between 2070 and 2090 unless urgent steps are taken to combat climate change, a new report from the Institute and Faculty of Actuaries (IFoA) and scientists from the University of Exeter warns.
The report highlights that without decisive political action to decarbonise economies and restore nature, the economic and societal shocks from climate change could be catastrophic.
The finding follows recent data from the EU’s Copernicus Climate Change Service (C3S), which revealed that global temperatures exceeded the critical 1.5°C threshold for the first time in 2024, exacerbating extreme weather events.
A Dire Warning for the Future
The IFoA report paints a bleak future, where fires, floods, droughts, and ecological breakdown could cripple economies and shatter societies. According to Sandy Trust, the report’s lead author, current climate risk models fail to grasp the true scope of the dangers, particularly in relation to tipping points and systemic collapse.
Trust criticised the prevalent economic forecasts that only predict a 2% loss in global output from a 3°C rise in temperatures, labelling them dangerously misleading. “Economic predictions… are blinding political leaders to the risks of their policies,” he warned.
The report warns of more than 4 billion potential deaths and a world torn by sociopolitical fragmentation and possible extinction-level events, with global temperatures on track to rise 3°C or more by 2050.
“You can’t have an economy without a society, and a society needs somewhere to live,” Trust concluded, cautioning that planetary systems may already be teetering on the brink.
Evidence of Accelerating Climate Breakdown
C3S data supports the report’s grim assessment, revealing that exceeding the 1.5°C threshold has “supercharged” extreme weather events, amplifying droughts and floods globally. This data signals a clear message: climate change is no longer a distant threat but a rapidly unfolding crisis.
Prof. Tim Lenton, co-author of the report and chair of climate change at the University of Exeter, emphasised the failure of current strategies, stating,
“Current approaches are failing to properly assess escalating planetary risks or help control them.” He continued.
“Planetary solvency applies the established approaches of risk professionals to our life-support system and finds it in jeopardy.”
Proposed Solutions
The report urges a fundamental rethinking of global economic strategies, calling for a move away from models that prioritise growth and extraction over ecological sustainability. Trust highlighted the vital role of nature in supporting human prosperity:
“Nature is our foundation, providing food, water, and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity which we must take action to avoid.”
A key proposal is the introduction of a Planetary Solvency Risk Dashboard, aimed at offering policymakers actionable insights into the risks at hand. Additionally, the report stresses the urgency of decarbonisation, carbon removal, and nature restoration to prevent catastrophic economic and ecological outcomes.
Broader Implications for Society
The IFoA’s dire report points to the critical link between the health of ecosystems and the stability of human societies, warning that environmental breakdown could destabilise entire civilisations. “It is these extremes that should drive policy decisions,” the report argued, calling on global leaders to act swiftly and decisively.
“Policymakers are currently unable to hear warnings about risks to ongoing human progress or unwilling to act upon them with the urgency required.”
Trust stressed the importance of leaders understanding the stakes of the climate crisis. “Leaders and decision-makers across the globe need to understand why these changes are needed,” he remarked, urging global policymakers to act without further delay.