The Impacts Of The Financial Sector On Global Climate Change

The Impacts Of The Financial Sector On Global Climate Change


January 25, 2023 | Eul Basa

The Impacts Of The Financial Sector On Global Climate Change


The fossil fuel industry is arguably the main culprit behind the climate change crisis, but it's not the only category that's contributing to the problem. The financial sector, for example, has been making its own missteps with climate change, and they're frighteningly similar to the ones it made with the housing market during the financial crisis of 2008.

A new report titled Degrees of Risk reveals that the financial sector has been relying too heavily on 3°C and 4°C global heating models without taking into full consideration the seriousness of those scenarios. The National Centre for Climate Restoration says this approach is similar to the one the financial sector took 13 years ago when the housing market crashed—back then, it also relied on inordinately optimistic models which made it seem like a disaster could be averted.

According to the report, a global average warming of 4°C (covering land and ocean) would essentially mean a 6°C increase over land and an 8°C increase over the mid-latitudes. All in all, that would lead to a 10°C increase in the summer average, or 12°C in heatwaves.

Climate ChangeShutterstock

To put that into perspective, in places like western Sydney, which already reached highs of 48°C this year, adding 12°C would bring heatwaves of 60°C. At climate extremes like that, societies and economies would simply crumble. "Bank customers would be dead on the streets," the report said.

Ian Dunlop, the head of the Australian Coal Association who co-authored the report, says that prioritizing data collection over action could have catastrophic consequences. While analyzing models or conducting "stress tests" can provide an idea of what to expect, they are not conclusive, and thus heavy reliance on such should be avoided.

"Our point, quite simply, is you don’t use scenarios in these extreme situations where the costs are infinite and the economy is going to collapse. The implication is that you’re not going to have an economy," he added.

The moral of the story is that actions will speak louder; at least, at this point in time. Scenario analysis is useful, yes, but it should not take precedence over action, especially when time is running out.


READ MORE

airlinescovidinternal

(How) Will Airlines Survive COVID-19?

As the crisis continues, airlines are hemhorraging money. Will airlines survive this crisis? And if so, how?
January 7, 2021 Eul Basa
hospital_internal

Drama Is The Best Medicine: Doctors And Patients Reveal Their Craziest Cases

There is a reason why shows like Gray's Anatomy and ER are so addictive: Hospital drama is insane, and not just on TV—that stuff happens in real life, too.
February 10, 2021 Eul Basa
cases_internal

Move To Strike: These Lawyers' Cases Unraveled In An Instant

Courtroom cases can take months or even years to go in front of a judge. Then, in the blink of an eye, it can all unravel spectacularly.
February 10, 2021 Eul Basa
customerservice_internal

Customer Service Nightmares: These Awful Moments On The Job Had Us Cringing Hard

There's one unfortunate side of working in customer service that's just unavoidable: customers. If you've ever worked with customers, you'll relate.
March 1, 2021 Eul Basa
teachers_internal

These Cruel Teachers Are The Stuff Of Student Nightmares

While it can seem like teachers don't know much more than their students, these traumatized pupils think the story's a little more complicated.
March 1, 2021 Eul Basa
doctors_internal

Crash Cart: Doctors Reveal The Harrowing Moments They'll Never Forget

From one-in-a-million cases to deranged patients and everything in between, these doctors have shared the medical moments they will never—ever—forget.
March 1, 2021 Eul Basa


Disclaimer

The information on MoneyMade.com is intended to support financial literacy and should not be considered tax or legal advice. It is not meant to serve as a forecast, research report, or investment recommendation, nor should it be taken as an offer or solicitation to buy or sell any securities or adopt any particular investment strategy. All financial, tax, and legal decisions should be made with the help of a qualified professional. We do not guarantee the accuracy, timeliness, or outcomes associated with the use of this content.





Dear reader,


It’s true what they say: money makes the world go round. In order to succeed in this life, you need to have a good grasp of key financial concepts. That’s where Moneymade comes in. Our mission is to provide you with the best financial advice and information to help you navigate this ever-changing world. Sometimes, generating wealth just requires common sense. Don’t max out your credit card if you can’t afford the interest payments. Don’t overspend on Christmas shopping. When ordering gifts on Amazon, make sure you factor in taxes and shipping costs. If you need a new car, consider a model that’s easy to repair instead of an expensive BMW or Mercedes. Sometimes you dream vacation to Hawaii or the Bahamas just isn’t in the budget, but there may be more affordable all-inclusive hotels if you know where to look.


Looking for a new home? Make sure you get a mortgage rate that works for you. That means understanding the difference between fixed and variable interest rates. Whether you’re looking to learn how to make money, save money, or invest your money, our well-researched and insightful content will set you on the path to financial success. Passionate about mortgage rates, real estate, investing, saving, or anything money-related? Looking to learn how to generate wealth? Improve your life today with Moneymade. If you have any feedback for the MoneyMade team, please reach out to [email protected]. Thanks for your help!


Warmest regards,

The Moneymade team