The debate about whether “green growth” will succeed in decoupling GDP growth from the total use of natural resources (that has been raging for years) is now settled by academic research. Every single reputable study shows that, even after accounting for rapid technological innovation and new taxes (such as a global carbon tax), there are physical limits to how efficiently we can use resources. This means that governments will progressively conclude that they must impose hard caps on resource use to avert an ecological catastrophe. For many, this is hard to fathom, but the author of The Sustainable State (published next month) has made the point incontrovertibly. This is coming, and China will show the way.
Dealing with climate change may be seen as expensive, but not dealing with it would prove financially ruinous and devastating in terms of social and economic welfare. According to a new UN report published by its scientific panel on climate change, if greenhouse gas emissions continue at the current rate, the atmosphere could warm by as much as 2.7 degrees F. or 1.5 degrees C. above pre-industrial levels by 2030—just over 12 years from now.
The report estimates that this could cause as much as $54 trillion in damage. For the wellness industry, a rising and critical concern (because there are so many wellness assets situated along coastlines) is the rise of sea levels and the risk of flooding during extreme weather events, such as hurricanes or storms.
Scientists and insurers are not talking anymore about a few inches of rising waters over the coming decades but rather a foot or so. More flooding will thus become more common, making it simply uneconomical to run some of the most exposed sea resorts. At the recent Global Wellness Summit, we heard for the first time investors and business leaders express deep concerns about some assets.