New | Global warming to impact credit ratings of countries: Moody’s
Africa and South Asia seen as most vulnerable
Countries’ creditworthiness could be increasingly affected by climate change, with African and South Asian sovereigns most susceptible to the economic effects of global warming, ratings agency Moody’s said on Monday.
By contrast, Western Europe, North America and Australia as well as the huge landmasses of Russia and China were least vulnerable, Moody’s found.
“Climate change is expected to become an increasingly dominant factor in our analysis of the credit profiles of those sovereigns that are most susceptible to its effects over the coming decades,” it said in a new report.
Climate change has ramifications for countries’ credit profiles through potential economic impact, damage to infrastructure, rising social costs, and population shifts, Moody’s said.
For example, gradual desertification in Israel, Lebanon and Jordan caused by global warming is leading to land degradation and infertility. Authorities in Lebanon, rated B2 negative by Moody’s, predict the economic damage from climate change could reach more than US$80 billion by 2040, or 1 1/2 times its current GDP.
