Financial sector warns of cost of climate change

Two major reports have forecast massive potential costs from damage caused by floods, storms and heatwaves resulting from global climate change.

Both reports, published on 29 June 2005, call for immediate action from governments and the financial industry to avoid crippling cost implications of climate change.

The first report, from the Association of British Insurers (ABI), predicts as much as a two-thirds increase in the cost of cleaning up after climate change by 2080. The ABI report builds on data from research by the Intergovernmental Panel on Climate Change.

The second, a joint report from the World Wildlife Fund and international financial services provider Allianz Global Investors, warns that action must be taken to calculate the cost risks from climate change and make provision for them. The financial industry must take these risks into account but a clear political framework at international level is essential.