We’ve always been told to save for a rainy day, but it looks like we’ll need to budget for hotter ones, too. A Nature study warns that by 2049, climate change could cost the global economy a staggering $38T every year (measured in 2005 dollars). If we don’t cut emissions soon, we’ll not only feel the heat literally but financially as well.

• In the next 25 years, rising temperatures could slash global income by 19% — with the potential loss growing to 60% if we fail to address the issue quickly.
• Developed nations like the US, Germany, and France could miss out on an 11% to 13% increase in GDP — and poorer countries could face an income decrease of 61%.

Turning climate losses into gains: While the impact of the climate crisis hits harder in less-industrialized nations, the US has found a way to profit from natural disasters — or the lack thereof. Hedge funds are investing in catastrophe bonds (cat bonds), yielding ~20% returns, significantly outpacing other asset classes. However, these bonds only pay out if a specific natural disaster doesn’t occur within a set period — a high-stakes game where investors win big if nature plays along but lose everything if disaster strikes.