Sovereign Rating Cuts Coming to Those Who Ignore the Climate
- Climate-linked downgrades risk $270 billion-a-year price tag
- Unchecked pollution may cut U.S. credit rating 2 steps by 2030
Photographer: Kevin Frayer/Getty Images
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A failure to cut pollution will cost governments around the world hundreds of billions, according to University of Cambridge economists who used artificial intelligence to forecast climate change’s effect on sovereign credit ratings.
If emissions continue at current levels, 63 countries will see ratings downgrades of more than one notch by 2030, according to the group, which includes Moritz Kraemer, S&P Global Ratings’ former chief sovereign ratings officer. The U.S. grade would drop by two notches, and as much as three levels for Germany, India and the Netherlands. Even meeting Paris Agreement commitments will mean an average cut of 0.65.