Climate Change - Evidence, Attribution, Projections and Remedies

Narrative

The financial press framing of climate change through 2025 and into 2026 has shifted decisively from long-run scenario planning towards the measurement of present-day economic damage. Bloomberg's January 2025 feature confirmed that 2024 was the first calendar year to exceed the Paris Agreement's 1.5°C threshold, a milestone confirmed by five science agencies, while BloombergNEF's October 2025 Climate Adaptation Scorecard reported that global climate-driven losses exceeded $1.4 trillion in 2024, roughly ten times the total in 2000. WTW's Natural Catastrophe Review recorded that global insured losses surpassed $140 billion in 2024, marking the fifth consecutive year such damages exceeded $100 billion, with total economic damages topping $350 billion. These figures are now feeding directly into cost-of-capital calculations: Bloomberg Professional Services analysis found that companies with a 10-percentage-point rise in modelled physical asset-damage risk face, on average, a 22-basis-point increase in their weighted average cost of capital.

Capital flows tell a more complex story. The IEA's World Energy Investment 2025 report put total global energy investment at a record $3.3 trillion, with clean technologies attracting $2.2 trillion, twice the $1.1 trillion flowing to fossil fuels; ten years earlier the ratio was reversed. The Bloomberg CCUS Aggregate Equal Weight Total Return Index surged 37.6% in 2025, and the firm's Prepare and Repair Index outperformed the S&P 500 by 500 basis points over the year, reflecting investor appetite for climate-adaptation infrastructure. Yet climate finance funds, despite raising a record $92 billion across 179 vehicles in 2025 per Sightline Climate data reported by Bloomberg, remain far below earlier projections: the voluntary carbon market, once imagined to reach $200 billion, remains a fraction of that level, with BloombergNEF's base-case high-quality scenario projecting supply growth from 243 million tonnes in 2024 to 2.6 billion tonnes in 2030 only if governance reforms hold.

The regulatory and institutional landscape has lurched in opposing directions. In March 2025 the SEC voted to abandon its climate-disclosure rules, and Goldman Sachs led a wave of US bank withdrawals from the Net-Zero Banking Alliance following Trump's re-election, per Bloomberg's April 2025 reporting. Banking on Climate Chaos 2025 documented that the world's top 65 banks directed $429 billion to fossil-fuel-expanding companies in 2024, a rise of $84.8 billion from 2023, even as many of those same banks had made COP26 commitments. European regulators moved in the opposite direction, with the EU's CBAM entering full operation and the ECB embedding physical climate risk into supervisory frameworks. Bloomberg's June 2026 regulatory brief noted ongoing divergence: the SEC's retreat on disclosure sits alongside tightening EU carbon market rules and new Article 6 standards under the Paris Agreement.

Economic damage modelling has also grown more contested. The Potsdam Institute's influential 2024 Nature paper estimating a committed 19% income reduction by 2050 was revised and subsequently retracted by December 2025, with the authors resubmitting under peer review, illustrating how sensitive damage functions remain to methodological choices. The Network for Greening the Financial System's 2024 revised scenarios estimated climate damages could equal 15% of global GDP by 2050 under 2°C of warming, three times higher than earlier NGFS assessments, underscoring how quickly consensus damage estimates are moving upward. Meanwhile the US Congressional Budget Office in February 2025 offered a narrower central estimate of a 3-4% GDP reduction by 2100, reflecting the persistent spread between empirical and integrated-assessment modelling approaches.