Climate change is a costly affair. It costs lives, wipes out species, and changes entire ecosystems. It also costs the world a great deal financially. According to a new analysis, by the middle of this century, the climate crisis could cost the global economy as much as $7.9 trillion.
The analysis was conducted by the Economist Intelligence Unit and involved examining the world’s 82 biggest economies. The researchers found that developing nations are likely to fare worse than richer ones, losing a greater proportion of their GPDs to climate change.
"Being rich matters," John Ferguson, EIU country analysis director, told AFP. "Richer nations are really able to be more resilient towards the impacts of climate change, so this really threatens growth trajectories of the developing world as they try to catch up with the developed world.
"When we are already dealing with global inequality, for the impacts of climate change the developing world's challenges are much greater."
Overall, global GDP is expected to decline by 3 percent. Africa, home to many developing nations, is projected to lose 4.7 percent of its GDP, with Angola losing the most – 6.1 percent of its total GDP.
Angola is particularly at risk because it is coastal, meaning it may suffer the effects of rising sea levels and more aggressive waves. It is also prone to droughts, which are only becoming more severe as the world hots up, and will suffer from soil erosion. As climate change makes many places around the world unliveable, it is estimated there could be around 140 million climate refugees by 2050.
The most vulnerable countries in terms of GDP lost to climate change after Angola are Nigeria, Egypt, Bangladesh, and Venezuela, which are expected to lose 5.9, 5.5, 5.4, and 5.1 percent of their GDPs respectively.
At the other end of the scale, the researchers note that the USA is in relatively good stead when it comes to facing the effects of climate change, as it has a well-funded research and development sector, strong national institutions, and isn’t as exposed to the geographic risks of climate change as many countries in the developing world. They estimate that it will lose 1.1 percent of its GDP, but they note that the Trump administration and its stripping of environmental policy has created a “temporary setback” in terms of tackling the impacts of climate change, and warn that other developed nations could follow suit.
“The long-term impact of this on our US model is fairly minimal, given that we expect successive administrations to take a more proactive stance as political and popular support for more climate-friendly policies builds,” the authors write. “Nonetheless, the Trump administration has dealt a temporary setback to the US’s climate change mitigation and adaptation efforts.”
Without the effects of climate change, the world’s economy would be set to hit $258 trillion by 2050, but with climate change, it is projected to reach only $250 trillion. It is clear that nations across the globe need to work together to drastically reduce greenhouse gas emissions, keep global warming to 1.5°C (2.7°F) above pre-Industrial levels, and protect those at risk from climate change’s worst effects.
"The global economy is going to suffer so it's not really a case of act now or act later. We need to do both," said Ferguson.
"Developing countries can't do this on their own. There needs to be a coordinated global effort to deal with the impacts we are talking about."
