'Adaptation alone will not be enough': Climate change to shrink global GDP by 7% by 2100
A "business-as-usual" approach to climate mitigation and carbon emissions will see 7% of global GDP disappear by 2100, with the UK down's economy down 4%, according to a new report predicting that all nations will be hit by climate change impacts.
The new study, co-authored by researchers from the University of Cambridge and published by the National Bureau of Economic Research, predicts that average global temperatures will rise by more than 4C by the end of the century, based on current trajectories, and will impact all nations, “whether rich or poor, hot or cold”.
Under a “business-as-usual” emissions scenario, The US would lose 10.5% of its GDP, Japan, India and New Zealand will lose 10%, Switzerland will be down 12%, Russia 9% and the UK down by 4%.
The global fall in GDP will be accompanied by an increase in severe and extreme weather events which will add further stress to national economies.
“Whether cold snaps or heat waves, droughts, floods or natural disasters, all deviations of climate conditions from their historical norms have adverse economic effects,” said Dr Kamiar Mohaddes, a co-author of the study from Cambridge’s Faculty of Economics.
“Without mitigation and adaptation policies, many countries are likely to experience sustained temperature increases relative to historical norms and suffer major income losses as a result. This holds for both rich and poor countries as well as hot and cold regions.”
Using data from 174 countries dating back to 1960, the research team also noted that GDP loss can be limited under a scenario in which the world “gets its act together” and delivers the aims of the Paris Agreement. Under this scenario, North American nations can limit losses to under 2% of national GDP.
Delivery of the Paris Agreement, and therefore reaching net-zero emissions by the 2050s will not be a burden to the economy, according to numerous reports. The chair of the Intergovernmental Panel on Climate Change (IPCC), Dr Hoesung Lee, for example, has dismissed fears from investors and nations that reaching net-zero emissions will place too much strain on the global economy.
The European Union (EU) agency Eurofound has outlined that meeting the 2C target established as part of the Paris Agreement will improve global GDP and boost investment. Global GDP would improve by 0.1% by 2030 and EU nations will benefit from a 1.1% rise in average GDP, the report states.
In greater relation to energy, global economic growth is now “directly linked to greater energy efficiency”, according to PwC, which found that global energy efficiency of economic growth has improved by one-third since 1990.
Almost a sixth of the entire global GDP is now covered by net-zero carbon emissions targets.