Edmond Rhys Jones: How climate shocks could break the economy

How climate shocks could break the economy

Climate change isn't just reshaping our planet — it's also shaking the very foundations of the economy, says sustainability expert Edmond Rhys Jones. He explores the massive gap between what science tells us about the climate crisis and how the economy measures its impact, advocating for economists to borrow tools from science (like simulations and digital twins) to prepare for the turbulence ahead.

Climate change is not only a planetary crisis but a looming economic one, with floods in Pakistan killing 1,700 people and European droughts marking the worst in 500 years. Traditional economic models gloss over the real turbulence, missing up to 80 percent of the financial impact from natural disasters. By borrowing tools from the sciences, such as simulations and digital twins, economists can better anticipate and prepare for cascading disruptions across industries and financial systems. The choice now is between scrambling to fix broken systems or investing in resilience and innovation before disaster strikes.

Climate Disasters Threaten To Unravel The Economic System

Climate change is not just a scientific crisis; it poses an immediate threat to financial systems worldwide. In 2021 alone, natural disasters killed thousands and upended industries, yet economic models often miss 80 percent of the true impact. Insurance markets are breaking under the pressure, and basic tools like mortgages could become unworkable in high-risk areas. Bridging the gap between scientific insight and economic preparedness requires bold new tools like simulations, helping societies anticipate and withstand future shocks.