Poor countries at four times risk of climate change, S&P warns
The economies of poor countries According to an S&P Global Rating analysis, by 2050, climate risks will be four times greater than those of wealthy peers.
About 12% of low- to middle-income countries will face economic productivity threats, compared to 3% for upper- and upper-middle-income states, the ratings agency said in a report based on “middle” situations. South Asia is particularly at risk – 10 times higher than Europe – due to exposure to storms, floods and rising sea level.
Countries around the equator and small island states are generally more at risk of physical climate, but also tend to be poorer, less diverse.fieconomics and weak institutions. This means that their economic losses are higher and more likely to be sustainable because they have less adaptability, S&P has been found.
“Climate change requires climate money to help developing countries build resilience where they have made relatively small contributions,” says the author, including Marion Amiot. “International cooperation and support can help the weakest countries finance the growing adaptation gap.”
Bond markets have already adapted to the threat of climate change, with borrowers issuing record amounts of green bonds and investors often offering a so-called “greenium” to seize them. Progress in determining the extent of climate risk for individual nations has been slow, and in any case the models may be of limited use as many sovereign bonds will not mature for decades.
S&P does not consider this analysis as part of its base case for sovereign ratings, citing the uncertainty of the estimates. The S&P analysis does not assess the so-called transformation risks, which indicate the economic costs of moving towards a green economy or the adaptation of the respective governments and communities.fforts
“It simply came to our notice thenffiCult to measure the impact of current adaptation approaches, ”said Paul Munde, the report’s primary analyst. That being said, it is reasonable to assume that countries will try to adapt to problems such as rising sea levels.
The study is based on a scenario that projected an average temperature rise of 1.8 degrees Celsius, with the Paris Agreement aiming to limit temperature rise to “well below” at 2 degrees Celsius. – Bloomberg
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