UN Report Quantifies the True Cost of Environmental Degradation
A major new assessment from the UN Environment Programme argues that the world has been radically underpricing the environmental cost of prosperity — and that the bill is now too big to ignore. The latest Global Environment Outlook (GEO) report, produced by roughly 200 researchers, estimates that the way we currently produce food, energy and other goods is inflicting about $5 billion of environmental damage every hour, or roughly $45 trillion per year when viewed through a full-cost lens.
The report reframes climate change, biodiversity loss and pollution as intertwined political, economic and security crises. According to its authors, these are no longer “just” environmental issues: they increasingly threaten food and water security, public health, social cohesion and even national security, as resource stress and climate impacts contribute to instability and conflict.
Much of the damage is concentrated in a few core systems. Food and agriculture account for an estimated $20 trillion of the annual cost, reflecting emissions, land-use change, water stress and ecosystem degradation. Transport adds another $13 trillion, and fossil-fuel-based electricity about $12 trillion, underscoring how tightly growth remains bound to high-emitting infrastructure and practices. These externalities have historically sat off-balance-sheet for both governments and markets, but the GEO warns that they are now eroding the foundations of long-term prosperity itself.
Crucially, the report argues that the economics of transition are more favourable than political debates often suggest. While the upfront costs of decarbonization, nature protection and pollution control are material, the GEO estimates that the net benefits of climate action alone could reach about $20 trillion per year by 2070 and roughly $100 trillion per year by 2100. In other words, the cost of inaction is far higher than the cost of acting at scale.
The politics remain difficult. Negotiations over a summary for policymakers reportedly broke down amid resistance from some major fossil-fuel producers to language on phasing out oil and gas, shifting diets and reducing plastics use. Yet the overall message of the report is that delay simply compounds risk. As one of the co-chairs put it, the science is robust and the solutions are known; what is missing is the political courage — and, increasingly, the time — to implement them.
For globally oriented families, institutions and businesses, the GEO’s numbers are a reminder that environmental risk is now inseparable from economic and geopolitical risk. How governments choose to embed these “hidden costs” into policy, and how capital allocators respond, will shape not just the trajectory of the net-zero transition, but the resilience of food systems, supply chains and societies over the coming decades.
