Climate and economic risks 'threaten 2008-style systemic collapse'

By Jonathan Watts

The gathering storm of human-caused threats to climate, nature and economy pose a danger of systemic collapse comparable to the 2008 financial crisis, according to a new report that calls for urgent and radical reform to protect political and social systems.

The study says the combination of global warming, soil infertility, pollinator loss, chemical leaching and ocean acidification is creating a “new domain of risk”, which is hugely underestimated by policymakers even though it may pose the greatest threat in human history.

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Evidence on the deterioration of natural systems is presented with a series of grim global statistics: since 1950, the number of floods has increased by a factor of 15, extreme temperature events by a factor of 20, and wildfires sevenfold; topsoil is now being lost 10 to 40 times faster than it is being replenished by natural processes; the 20 warmest years since records began in 1850 have been in the past 22 years; vertebrate populations have fallen by an average of 60% since the 1970s, and insect numbers – vital for pollination – have declined even faster in some countries.

These processes amplify and interact with existing social and economic problems, potentially threatening systemic collapse similar to the 2008-9 financial crisis. Back then, a subprime mortgage crisis in the US exposed excessive risk-taking and triggered a global panic and the deepest recession since the 1930s. The IPPR study envisages a similar breakdown could occur if the US suffers relentlessly worsening damage from hurricane floods and forest fires, which would prompt a rush of insurance claims and threaten the viability of financial institutions.

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