Climate disasters cost the world $650 billion over 3 years — Americans are bearing the brunt: Morgan Stanley

https://www.cnbc.com/2019/02/14/climate-disasters-cost-650-billion-over-3-years-morgan-stanley.html

Tom DiChristopher
Published 6:27 AM ET Thu, 14 Feb 2019 Updated 8:30 AM ET Thu, 14 Feb 2019

Climate-related disasters have cost the world $650 billion over the last three years, and North America is shouldering most of the burden, according to a new report from Morgan Stanley.

While governments and corporations are taking steps to mitigate the impacts of climate change, Morgan Stanley says private enterprises need to strongly consider preparing for a world gripped by more frequent and intense weather events, rising sea levels, changes to agriculture and the spread of infectious disease. Those outcomes will have a lopsided effect across industries, raising risks for some and creating opportunities for others.

"We expect the physical risks of climate change to become an increasingly important part of the investment debate for 2019," Morgan Stanley equity strategists Mark Savino, Jessica Alsford and Victoria Irving said in a research note Wednesday.

At $650 billion, the three-year price of climate disasters totals just over a quarter of a percent of global gross domestic product, the analysts say. The investment bank warns that the situation may only get worse, noting that damages associated with global warming could total $54 trillion by 2040, according to a UN panel composed of the world's top climate scientists.

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President Donald Trump continues to cast doubt on the consensus among climate scientists and U.S. government agencies that greenhouse gas emissions from human activity are warming the planet. His administration, backed by congressional Republicans, is seeking to boost fossil fuel production and push through a broad rollback of Obama-era policies aimed at lowering U.S. emissions.

After the U.S., Asia is most exposed to the cost of climate disasters, absorbing $180 billion in economic damages, equal to 0.24 percent of regional GDP, Morgan Stanley says.

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In the near term, Morgan Stanley sees climate change posing risk of negative disruptions to a dozen sectors, from agriculture to oil and gas production. Just four sectors — capital goods, home improvement retail, lodging and construction machinery — could reap benefits from those near-term disruptions.

Over the longer term, structural changes are seen negatively impacting nine sectors, including many of the industries that also face near-term hurdles. Real estate, leisure and consumer retail are also on the list. Other sectors, like auto manufacturing, biotechnology, health care and pharmaceuticals, insurance, mining and utilities, could find opportunity in structural change.

Drilling down, the four main vectors that Morgan Stanley identifies — sea-level rise, weather events, changes in agriculture and infectious disease — will impact sectors in different ways.

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