Climate change may wipe out US$18 trillion by 2050, forum warns

The Mae Fah Luang Foundation’s Sustainability Forum 2025 sounded a stark warning on Monday, projecting that if global temperatures rise by 3.2°C by 2050, the world economy could lose as much as US$18 trillion – six times the damage inflicted by the Covid-19 pandemic.

Karin Boonlertvanich, executive vice-president of Kasikornbank, cited the Intergovernmental Panel on Climate Change (IPCC) in stressing that the economic toll could amount to 18% of global GDP, compared with the US$8 trillion – or 3% of GDP – lost during the pandemic.

For Thailand, the impact could be severe. “We estimate losses equivalent to 44% of annual GDP or 45% of exports. If businesses fail to adapt, banks like ours will face rising non-performing loans. This raises the question: how can we compete in a rapidly changing world?” Karin said.

He added that global climate finance is accelerating, from US$1.9 trillion in 2023 to a projected US$4.4–6.3 trillion in 2030, and US$7.1–9.2 trillion in 2031–2050. The focus will gradually shift from energy and transport towards supporting carbon reduction in manufacturing.

Kasikornbank has already adjusted its lending strategy, with green loan demand surpassing expectations. While the bank originally set a target of 200 billion baht in environmental loans by 2030, requests have already reached 165 billion baht and are expected to exceed the target by 2026.

“The growing demand has prompted the bank to raise its environmental lending target for 2030 from 200 billion baht to 500 billion baht, with plans to inject more funds into the system,” Karin said.

“At the same time, the bank will expand beyond large corporations to include smaller businesses and SMEs, which increasingly require environmental solutions,” he addded.

Piyachart Isarabhakdee, co-chairman of the BRANDi Institute of Systematic Transformation (BiOST), said the world is facing a paradox where environmental, economic and social problems are intensifying, yet responses remain focused on short-term fixes.

He argued that the core weakness of the current economic system is that the global growth equation does not factor in the ecological costs essential for sustainable development. As a result, economic growth has shortened the future rather than driving genuine development.

Piyachart proposed that the new era of growth must secure a real future at three levels:

• At the macro level, policy must treat sustainability and the economy as one. 
• At the market level, a development market must emerge, seeing social and environmental challenges as a new frontier of business opportunity. 
• At the micro level, sustainability should be embedded in daily life, with small but consistent changes shaping long-term impact.

“Leaders in today’s business world must have clear vision. Progress may begin with small steps, but taken every day, they can generate real impact for both the economy and the environment,” Piyachart said.