Climate change poses an increasingly urgent threat to global economic stability, with alarming projections underscoring the potential losses that could arise from inaction. The Mae Fah Luang Foundation’s Sustainability Forum 2025 recently delivered stark warnings regarding these potential losses, emphasizing that if global temperatures rise by 3.2°C by the year 2050, the world could face a staggering economic decline amounting to US$18 trillion. This figure is strikingly six times greater than the economic damage resulting from the Covid-19 pandemic, highlighting the profound and lasting impact climate change could have on our global economy.
The Grim Economic Forecast
Karin Boonlertvanich, Executive Vice President of Kasikornbank, referenced findings from the Intergovernmental Panel on Climate Change (IPCC) during the forum, underscoring that the expected economic toll could amount to around 18% of global GDP. This figure stands in stark contrast to the US$8 trillion loss incurred during the pandemic, which represented only about 3% of the global economy.
For emerging economies like Thailand, the repercussions could be disastrous. Estimates suggest that Thailand could see losses equivalent to a staggering 44% of its annual GDP or 45% of its exports. This raises a pressing concern for businesses, as failure to adapt to climate challenges could significantly increase the risk of non-performing loans for financial institutions. Boonlertvanich posed a critical question to the audience: “How can we compete in a rapidly changing world?” This sentiment highlights the urgency with which both governments and private sectors must address climate change.
Investing in Climate Solutions
Amidst these dire predictions, there exists a silver lining: the acceleration of global climate finance. Projections indicate that climate-related investments could rise sharply from US$1.9 trillion in 2023 to an anticipated US$4.4–6.3 trillion by 2030, and as high as US$7.1–9.2 trillion during the 2031–2050 period. Such investments are expected to transition from a primary focus on energy and transport towards supporting carbon reduction initiatives in manufacturing. This shift could play a critical role in mitigating the economic losses projected due to climate change.
By investing in renewable energy, sustainable practices, and smarter manufacturing processes, countries and businesses can protect their economies and create jobs. The transition to a low-carbon economy is not merely beneficial for the environment; it is also an economic opportunity that should not be overlooked.
Global Response and Policy Action
Addressing climate change requires a global response, with collaboration among nations, businesses, and civil societies. Policymakers must prioritize ambitious climate action plans, emphasizing not only the need for immediate steps to reduce carbon emissions but also strategies to invest in sustainable technologies and infrastructure.
The urgency for transformative policies is amplified by the recognition that the effects of climate change are often unevenly distributed, disproportionately affecting emerging economies and communities that are least equipped to cope with environmental changes. This disparity calls for an equitable approach to climate finance, ensuring that vulnerable regions receive the necessary support to adapt and thrive in the face of environmental challenges.
The Call for Adaptation and Resilience
As highlighted by the forum, businesses and financial institutions must adapt to the changing landscape. Encouragingly, the discussion around climate adaptation strategies is gaining momentum. Companies are increasingly recognizing that adopting resilient practices not only helps mitigate risks but can also drive long-term growth.
Integrating sustainability into business models has become a focal point for many organizations. This involves evaluating supply chains for vulnerabilities, investing in renewable resources, and improving energy efficiency. The businesses that successfully navigate these challenges will likely emerge stronger and more competitive in the future market.
Leveraging Technology and Innovation
The role of technology in combating climate change cannot be overstated. Advances in technology are paving the way for creative solutions aimed at reducing emissions and improving sustainability. Innovations such as carbon capture and storage, energy-efficient systems, and sustainable agriculture techniques are just a few examples of how technological advancement can combat climate-related risks.
Moreover, digitalization can also transform finance and investment processes by increasing transparency, making it easier for stakeholders to assess climate risks, and enabling better decision-making related to sustainability initiatives.
Community Engagement and Awareness
Awareness and education on climate change are paramount. The public’s role in advocacy and engagement can significantly influence policy decisions and drive industrial change. By emphasizing the importance of sustainable practices and climate action, communities can foster responsibility towards environmental stewardship.
Sustainability forums like the Mae Fah Luang Foundation’s serve as an essential platform for dialogue and knowledge sharing, bringing together diverse stakeholders committed to confronting the pressing challenges of climate change. They help raise awareness and spur action at local, national, and global levels.
Conclusion
The warning issued at the Sustainability Forum regarding the potential US$18 trillion loss due to climate change is a call to action that cannot be ignored. The convergence of economic and environmental challenges highlights the necessity for immediate, collaborative, and actionable strategies to mitigate these risks. While the forecast may appear grim, opportunities for innovation and investment in sustainable practices offer a pathway towards resilience and economic stability. By embracing the shift towards a sustainable future, businesses, governments, and individuals can work together to ensure that the costs of inaction do not leave us with a legacy of devastation, but rather pave the way for a more sustainable and prosperous world.
