In a recent report about the rising demand for air-conditioning, Morgan Stanley casually observed that the planet was all but certain to blow past the goal of limiting the global average temperature rise to no more than 2 degrees Celsius above preindustrial levels, a threshold laid out in the Paris Agreement.

The company’s “base case,” the report said, was that the world was moving toward a temperature increase of [My emphasis]

That forecast, once thought of as extreme, is now becoming commonplace. The United Nations’ Emissions Gap report for 2024 said that the world was likely to warm 3.1 degrees Celsius over the course of this century without efforts to rapidly reduce emissions. The Intergovernmental Panel on Climate Change has forecast that without drastic action temperatures will be even higher than that by the end of the century.

A constant challenge when talking about global warming is appreciating that little numbers — a rise in temperatures by just a single degree, for example — represent utterly profound changes.

Which is why it’s worth pausing to consider what scientists have said about what the world would look like if average global temperatures rose 3 degrees Celsius, and what it will cost.


At 3ºC of warming, rising seas are likely to inundate many coastal cities, including metropolises like Rio de Janeiro, Shanghai, Miami and Osaka, Japan.

A litany of other problems, including extreme weather, unrelenting heat waves, the proliferation of insect-borne diseases, widespread species extinction and declines in crop yields, would also get worse.

It’s impossible to know the actual cost of all these disruptions. Yet as the prospect of more intense warming becomes more likely, some estimates are beginning to emerge.

By 2049, costs from the effects of climate change could total more than $38 trillion annually, according to a paper by scholars at the Potsdam Institute for Climate Impact Research.

In the United States alone, climate change is expected to wipe away $1.47 trillion in value from real estate around the country by 2055, according to a February report from First Street, which models climate risk.

Just in New York City, more than 80,000 homes could be lost to floods in the next 15 years, my colleagues Mihir Zaveri and Hilary Howard reported this week.

Beyond the immediate losses inflicted by severe weather and flooding, a decline in output is likely as crops fail and extreme heat strains supply chains.

Researchers at ETH Zurich recently calculated that in a world that has warmed 3ºC, global gross domestic product is likely to fall by an average of 10 percent, with poorer countries hardest hit.

Climate change is simply making some things uninsurable.

“The math breaks down: the premiums required exceed what people or companies can pay,” he said. “This is already happening. Entire regions are becoming uninsurable.”

But the risks extend well beyond the insurance business, Thallinger said.

“This is not a one-off market adjustment,” he wrote in his post. “This is a systemic risk that threatens the very foundation of the financial sector. If insurance is no longer available, other fi[url]nancial services become unavailable too. A house that cannot be insured cannot be mortgaged. No bank will issue loans for uninsurable property. Cr[/url]edit markets freeze. This is a climate-induced credit crunch.”

At that point, Thallinger wrote, “the financial sector as we know it ceases to function.”

“And with it,” he added, “capitalism as we know it ceases to be viable.”

Trump administration cuts funding and staff for flagship climate report