US$6.6 trillion damage to environment in 2008
Global environmental damage caused by human activity in 2008 represented a monetary value of $ 6.6 trillion, equivalent to 11% of global GDP, calculates a study released by the UN-backed Principles for Responsible Investment (PRI) and the UN Environment Programme Finance Initiative (UNEP FI). Those global costs are 20% larger than the $ 5.4 trillion decline in the value of pension funds in developed countries caused by the global financial crisis in 2007-8.
The study, an initial effort to quantify in monetary terms the environmental harm caused by business and the possible future consequences for investor portfolios, fund returns and company earnings, estimates that in 2008 the world’s top 3,000 public companies were responsible for a third of all global environmental damage.
The study warns that as environmental damage and resource depletion increases, and governments start applying a “polluter pays” principle, the value of large portfolios will be affected through higher insurance premiums on companies, taxes, inflated input prices and the price tags for clean-ups. Read the report at this link.
“GHG emissions and resulting climate change impacts account for a large and growing share of environmental costs – rising from 69% to 73% of externalities between 2008 and 2050,” says the report. Trucost applied a carbon price of US$ 85 to each tonne of GHGs emitted in 2008 to calculate global annual external costs as US$ 4.5 trillion. This represents the present day value of future climate change impacts and is based on the social cost of carbon from the Stern Review on the Economics of Climate Change (2006).”
“The future rise in costs for escalating GHG emissions to reflect mounting climate change impacts results in projected external costs of US$ 21 trillion in 2050. Emissions are the main driver of the trajectory of rising externalities year-on-year. Water abstraction and air pollution were the other main contributors to environmental costs, followed by emissions of volatile organic compounds, waste generation, fish and timber use and mercury emissions.”