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UK will suffer, on balance
UK-based PricewaterhouseCoopers predicts that the downside impacts of a 2C rise in global temperatures would outweigh the upside opportunities by an “order of magnitude”.
A new research paper by the financial services firm identifies five major threats, of which the impact on food security is one of the most important. During the food price spike in 2007-8, for example, 43 developing countries reduced import taxes and 25 banned exports or increased export taxes. The cost of damaged assets in international locations as a result of severe weather represents another major risk, most notably for the UK insurance sector. The average insured loss in the UK from inland flooding, for example, is predicted to increase by 8% to £600m.
On the plus side, PwC identifies areas of opportunity, including the demand for UK healthcare expertise overseas and reduced shipping costs from the opening of the Arctic.
Global financial markets may still be in the doldrums but there’s one ray of hope: climate-themed bonds. These investment-grade bonds jumped from a market of $174bn in 2011 to $346bn in 2012, according to new findings from HSBC and the Climate Bonds Initiative.
The research reveals 260 financial institutions that...