https://arab.news/92ynu
As business, government and nonprofit leaders debate the future of climate action ahead of November’s COP30 UN Climate Change Conference in Brazil, the global economy remains vulnerable to acute and chronic climate-driven shocks whose impact could be more severe than that of the 2008 global financial crisis. At a time when many governments and businesses continue to underestimate and underprice physical climate risk, we must remember that neither financial markets nor regulators are always right. What if their current complacency about climate risks is catastrophically wrong?
The 2008 financial crisis and its aftermath showed how fast our expectations can be shattered. In the mid-2000s, deregulation and simplification were the norm: balance sheets were run thin and profits and losses ran high. Financial engineering boomed as risks were packaged, diluted and obfuscated, and as credit was given where it had not been earned.
In the face of all this, expressions of concern were drowned out by the din of transactions. But the signs were there. The fundamentals were not right.
By late 2008, the global economy was teetering on the brink of collapse. In the space of days, long-standing banking giants were swept away. Only government bailouts prevented the entire financial system from melting down.
