The economics of climate change

Climate change poses the biggest long-term risk to the global economy. No action is not an option.

By mid-century, the world stands to lose around 10% of total economic value from climate change. That is a real scenario if temperature increases stay on the current trajectory, and both the Paris Agreement and 2050 net-zero emissions targets are not met, according to new Swiss Re Institute research.

The Climate Economics Index stress-tests how climate risks will impact 48 countries representing 90% of the world economy and ranks their overall climate resilience. It shows all countries will be affected, but some are more vulnerable than others.

Find out more with our interactive tool or download the full report using the button at the top of this page.

Physical risks

Economies in south and southeast Asia are most vulnerable to the physical risks associated with climate change. They are also the countries that have most to gain if the world is able to rein in temperature increases. Many advanced economies in the northern hemisphere are less vulnerable, being both less exposed to adverse developments in weather patterns associated with climate change, and better resourced to cope.

Transition risks

Climate change also poses transition risks, and once again Asia may be most impacted. Transition risks can show, for example, in large shifts in asset values and higher costs of doing business as the world moves to a low-carbon economy, and can have significant financial and economic impacts.

Climate risk is a systemic risk and can only be addressed globally. We still have an opportunity to correct course now and construct a world that will be greener, more sustainable and more resilient.
Jérôme Haegeli, Swiss Re's Group Chief Economist

Mitigating the risk

The impacts of climate change can be lessened if decisive action is taken to meet the targets set out in the Paris Agreement. This will require more than what is pledged today, with both the public and private sectors working together to accelerate the transition to net zero.

Re/insurers play a key role in providing risk transfer capacity, risk knowledge and long-term investment, using their understanding of risk to help households, companies and societies mitigate and adapt to climate change.

Find out more in our report.


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