The rise of extremism

The news headlines on massively damaging hurricanes, floods and heat waves are almost daily. Extreme weather is now the norm. This is likely to lead to a not insignificant hit to potential global economic growth over the next 20 years unless preventive and remedial action is taken. Given the current rate of losses, we estimate global growth could be hit by 1% pt a year. But crises provide opportunities. Catastrophe or impact bonds will be a growing market. Green bonds to fund resilience infrastructure could deliver high returns to compensate for higher risk. And investment in renewable energy is increasingly profitable.

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