The global economy could face a 50 percent loss in gross domestic product between 2070 and 2090 from the catastrophic shocks of climate change unless immediate action by political leaders is taken to decarbonize and restore nature, according to a new report.

The stark warning from risk management experts at the Institute and Faculty of Actuaries, or IFoA, hugely increases the estimate of risk to global economic well-being from climate change impacts such as fires, flooding, droughts, temperature rises, and nature breakdown. In a report with scientists at the University of Exeter, published on Thursday, the IFoA, which uses math and statistics to analyze financial risk for businesses and governments, called for accelerated action by political leaders to tackle the climate crisis.

Their report was published after data from the European Union’s Copernicus Climate Change Service showed climate breakdown drove the annual global temperature above the internationally agreed 1.5 Celsius target for the first time in 2024, supercharging extreme weather.

Without urgent action to accelerate decarbonization, remove carbon from the atmosphere, and repair nature, the plausible worst-case hit to global economies would be 50 percent in the two decades before 2090, the IFoA report said.

At 3 C or more of heating by 2050, there could be more than 4 billion deaths, significant sociopolitical fragmentation worldwide, failure of states (with resulting rapid, enduring, and significant loss of capital), and extinction events.

Sandy Trust, the lead author of the report, said there was no realistic plan in place to avoid this scenario.

He said economic predictions, which estimate that damages from global heating would be as low as 2 percent of global economic production for a 3 C rise in global average surface temperature, were inaccurate and were blinding political leaders to the risks of their policies.

The climate risk assessments being used by financial institutions, politicians and civil servants to assess the economic effects of global heating were wrong, the report said, because they ignored the expected severe effects of climate change such as tipping points, sea temperature rises, migration, and conflict as a result of global heating.

“[They] do not recognize there is a risk of ruin. They are precisely wrong, rather than being roughly right,” the report said.

If these risks were taken into account the world faced an increasing risk of “planetary insolvency,” where the Earth’s systems were so degraded that humans could no longer receive enough of the critical services they relied on to support societies and economies.

“You can’t have an economy without a society, and a society needs somewhere to live,” said Trust.

“Nature is our foundation, providing food, water, and air, as well as the raw materials and energy that power our economy. Threats to the stability of this foundation are risks to future human prosperity, which we must take action to avoid.”

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The report, named “Planetary Solvency — finding our balance with nature,” criticizes the dominant economic theory used by governments in the U.K., U.S. and across the developed world, which focuses on what humans can take from the planet to create growth for themselves and fails to take into account the real risks from nature degradation to societies and economies.

The report called for a paradigm shift by political leaders, civil servants, and governments to tackle global heating. It said: “Leaders and decision-makers across the globe need to understand why these changes are needed.

“It is these extremes that should drive policy decisions … policymakers are currently unable to hear warnings about risks to ongoing human progress or unwilling to act upon them with the urgency required.”

The report proposes a planetary solvency risk dashboard, to provide information to support policymakers to drive human activity within the finite bounds of the Earth.

Tim Lenton, the chair of climate change and Earth systems science at the University of Exeter, and a co-author on the report, said: “Current approaches are failing to properly assess escalating planetary risks or help control them. Planetary solvency applies the established approaches of risk professionals to our life-support system and finds it in jeopardy. It offers a clear way of seeing global risks and prioritizing action to limit them.”