Global environmental damage resulting from human activity resulted in an economic cost of $6.6 trillion during 2008, equivalent to 11 percent of global GDP. By 2050, this annual amount is expected to jump to $28 trillion (18 percent of GDP).
The grim numbers come from a study released Wednesday by the UN-backed Principles for Responsible Investment (PRI) and UNEP Finance Initiative.
The most environmentally damaging business sectors have been identified as utilities; oil and gas producers; and industrial metals and mining. The three together accounted for almost a trillion dollars’ worth of environmental harm in 2008. The top 3,000 companies by market capitalisation, which represent a large proportion of global equity markets, were responsible for $ 2.15 trillion worth of environmental damage in 2008.
The report, titled Universal Ownership: Why environmental externalities matter to institutional investors, projects that the monetary value of annual environmental damage from water and air pollution, greenhouse gas emissions, general waste and depleted resources could reach $28.6 trillion in 2050, or 23 percent lower if clean and resource-efficient technologies are introduced.
"A great deal of this environmental damage is caused by the way we do business. If we are to create a truly sustainable global economy, then we must change our economic models so that business can become part of the solution, not part of the problem," the authors warned.
Reducing greenhouse gas (GHG) emissions, water use and air pollution would have the greatest effect on reducing environmental costs, the report asserted. The main problem areas were GHG emissions, water abstraction, pollution, general waste, and plunder of natural resources like timber.
