UN: Annual cost of environmental damage tops $6.6 trillion
New study reckons environmental damage carried out during 2008 resulted in financial costs equivalent to 11 per cent of GDP
Global environmental damage resulting from human activity resulted in an economic cost of $6.6 trillion during 2008, equivalent to 11 per cent of global GDP, and is set to cost $28 trillion a year by 2050.
That is the stark warning contained in a major new report from the UN Environment Programme (UNEP) and the Principles for Responsible Investment (PRI) initiative which will be released later today.
The flagship study aimed to put a monetary value on environmental harm caused by the business community and assess the possible future consequences for investor portfolios.
It concluded that the world's top 3,000 public companies are responsible for a third of all the global environmental damage carried out ion 2008, running up unaccounted costs equivalent to $2.2 trillion.
It also warns that as environmental damage worsens and governments increasingly begin to apply the 'polluter pays' principle to regulation, investors and businesses are likely to be impacted by higher insurance premiums, increased green taxes, inflated resource prices and rising environmental clean up costs.
Paul Clements-Hunt, head of the UNEP Finance Initiative, said that the report highlighted the urgent need for businesses to account for environmental externalities.
"This report sends a powerful message that the environment is also the business of business," he said. "Polluters must pay… Cohesive policy and regulation is required to fully account for externalities and speed up the integration of material environmental issues into investment decisions. The bottom line is that if we are to achieve a sustainable global economy, then we must stop drawing down our natural capital."
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