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Tags: bridgewater | ray dalio | climate change

Bridgewater's Dalio: Climate Change Will Cost Trillions Yearly

By    |   Sunday, 24 December 2023 02:33 PM EST

Mitigating the effects of global climate change will cost trillions per year, and a way must be found to make it economical before investors will agree to put money behind clean energy initiatives.

That could leave the world responding to the issues rather than preventing them, according to global macro investor and founder of Bridgewater Associates Ray Dalio. 

"It's going to cost between $5 trillion and $10 trillion a year, whether you spend money on it or whether it's consequences because you don't spend money on it," Dalio said in an interview on CNN's "State of the Union" Sunday. "So who's got the money is the big question, and how do you practically do it?"

At this point, only one-sixth of what's needed is being spent, said Dalio, and of that the money is going to mitigation, not adapting the technology to meet the needs of the future, he said.

"By mitigation, I mean trying to find alternative energy sources, making sure temperatures don't rise by one 1.5 degrees Celsius, those things that mean that [climate change] doesn't happen," Dalio added. 

But if climate change does happen, then there will need to be adaptations, and that will cost money to build the air conditioning systems and ways to deal with rising sea levels, not to mention the money to deal with damages.

"Any way you cut it [it] is going to be a lot of money," said Dalio. "The problem is that it's not economic, so you have to start off by looking at, Who has the money? Where are you going to get the money from … it has to be economic to produce a profit."

The largest source of money would come from institutional investment, about $200 trillion, but "only about 0.3% of that money goes into this issue," he added. 

"When I say institutional money, I mean pension funds, endowments, foundations, sovereign wealth funds that have to take care of the population," said Dalio. "The issue is, how do you make it economic to get money into that? And that's where the real impediment is."

He suggested thinking of the money as a pension fund, which would ideally be invested in ways that will make money.

"There's a double bottom line there, in other words, the do-good part of it, and then also the fact that it creates a return," Dalio said. 

He pointed out that billionaire Bill Gates has a climate fund, Breakthrough Energy, that is producing a return from finding new inventions. 

However, the inventions won't happen at the pace that is needed, so then adaptation comes into play to deal with rising sea levels and temperature changes, Dalio said. 

He pointed out, though, that more than 80% of the world's population live in places that will not get funding for adaptation, so that will also have consequences such as migration. 

"The main thing I'm saying is that it has to be dealt with practically, calculating where you're going to get the money from those who can make it, and that has to be productivity, the great inventiveness of entrepreneurs, and so on," said Dalio. 

But there is a "very limited amount of time," before the efforts will have to go toward adapting to the effects of climate change, rather than preventing them, he warned.

Sandy Fitzgerald

Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics. 

© 2024 Newsmax. All rights reserved.


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Mitigating the effects of global climate change will cost trillions per year, and a way must be found to make it economical before investors will agree to put money behind clean energy initiatives.
bridgewater, ray dalio, climate change
550
2023-33-24
Sunday, 24 December 2023 02:33 PM
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