The Cost of Climate Change Might Be Higher than Anyone had Expected
$60 trillion dollars. That’s how much climate change is going to cost the global economy over the next hundred years, according to an alarming study published in the journal Nature recently. The author warns that if severe and immediate action isn’t taken to curb the climate change crisis, it could turn into an ‘economic time bomb’.
The Real Cost of Climate Change
In the past year, there have been devastating storms, floods, droughts and wildfires which have cost the government billions of dollars, but the real economic impact of climate change is yet to come. According to the estimate given by a new study, if the world fails to adhere to the U.N. Paris Agreement, the global economy could suffer from a loss of trillions of dollars.
According to the crucial agreement, which has 195 signatories, countries must meet the goal of keeping global temperatures only 2 degrees Celsius above the pre-industrial era. The agreement also includes a more extreme plan of limiting the temperature rise to only 1.5 degrees higher than pre-industrial era. However, the economic consequences of not adhering to the agreement have not been fully addressed in the past.
Marshall Burke, the lead researcher of the study and assistant professor at Stanford University, says that no matter what the climate change deniers say, scientists have proven that the global temperatures have increased by 1 degree over the past hundred years.
Even though the goal of the Paris Agreement is extremely ambitious and seemingly do-able, the process isn’t, by any means, going to be a cheap one. But before calculating the economic burden of introducing new laws that prevent climate change, it is important to understand the economic benefit from meeting the goals of the agreement.
Benefits of Keeping Global Temperatures Low
To fully explain the consequences of climate change on global economy, researchers analyzed the economic performance over the past fifty years and matched the trend with the increasing temperatures to create a projection of how much the climate will change over the next century and how the increasing temperatures will directly and indirectly affect the economy as a whole.
The study’s results showed that almost 90 per cent of the countries would experience significant economic benefits from making an effort to keep global temperatures below the Paris Agreement’s 1.5 and 2 degrees mark. The biggest beneficiaries of the agreement are China, Japan and the United States, which are also the world’s three largest economies.
But the benefit isn’t limited to the developed nations. Even some of the poorest countries can experience a significant increase in their GDP per capita by making slight changes to reduce the effects of global warming in the future. Burke says that the nations to benefit the most are already experiencing extremely hot temperature, any further increase will only force them to spend more on energy, reduce agricultural productivity and slow down economic growth.
A Combined Effort Needed
Another research showed that countries are making far less commitments needed to keep the temperatures below the 2-degrees mark. All the collective efforts of the Paris Agreement’s signatories add up to just under 3 degrees increase in global warming instead of the ideal 2-degrees goal.
Despite the benefits revealed by adhering to the Paris Agreement’s goals, the researchers also found that the economic consequences could be even greater if only a few countries fulfilled their individual commitments of keeping temperatures low but failed to meet the overall 2-degree global warming goal. Coauthor Noah Diffenbaugh said that the Paris Agreement can only become successful if all countries joined efforts to avoid environmental and economic damages in the future.
The authors caution that the total costs of climate change may be underestimated by the study and depend on the severity of catastrophic natural disasters like floods, heatwaves and melting ice. But even with low levels of global warming, extreme weather patterns are expected to be as prevalent, according to the findings of a different research.
The new study is important for shedding light on economic benefits of following the Paris agreement, especially after Donald Trump decided to withdraw United States from the agreement over concerns that fighting climate change could prove to become too costly for the country’s economy.
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