(STUDY FINDS) — DAVIS, Calif. — The next Great Recession could come on the heels of an extreme weather event, due to the fact that the risk of disruptive physical weather is not accounted for in financial markets. Researchers from the University of California, Davis warn that the worldwide financial market needs to plan for weather risks or face extreme correction.
Without accounting for this risk, average energy investors have no way of knowing if the next extreme weather event will start a sudden market correction.
“If the market doesn’t do a better job of accounting for climate, we could have a recession — the likes of which we’ve never seen before,” says lead author Paul Griffin, of the UC Davis Graduate School of Management, in a university release.
