Climate change might hit the economy harder and faster than thought
The economic effects of global warming may arrive sooner and with a bigger impact than previously thought, according to Oxford Economics in a report that compares recent scientific research with the economic literature on the costs of climate change.
In the absence of efforts to curb greenhouse gas emissions, the earth could warm by 2 degrees celsius by 2050, cutting global gross domestic product by 2.5% to 7.5%, Oxford estimates, with the worst affected countries being in Africa and Asia. Longer term, a rise in temperatures of 4 degrees by 2100 could cut output by as much as 30%.
Economist James Nixon partly based his analysis on the Intergovernmental Panel on Climate Change’s Special Report on Global Warming of 1.5C. Older studies tended to predict the effects of even 4 or 5 degree of warming at no more than a few percent of global GDP and becoming significant only in the second half of the century, Nixon said, yet latest scientific findings show profound climate alterations already happening, including drought, flooding and extreme weather that affect economic activity.
“While over a 10-year horizon the costs seem unlikely to be significant enough to affect our forecasts, the window of indiscernibility looks to be closing rapidly,” Nixon said in the report. The effects are “big enough to be considered in our short-term economic forecasts for the first half of this century.”
Global greenhouse-gas pollution has risen for a second year, ending a lull in emissions and putting the world on track for further increases through 2040 unless governments take radical action.