On average, we will converge 40 percent, if the average temperature Earth will increase by 4 degrees Celsius above the level before the industrial revolution. Previous analyzes did not reach the impact of climate change on the global economy, because they took into account only anomal weather at local level – results from the analysis Dr. Timothy Neal from the Institute for Climate Risk and Reaction to Climate change at the University New Southern Wales (UNSW), which “The Guardian” discusses.
Climate change will have a devastating impact on the economy
Even if the temperature increases by 2 stops. Celsius, the average GDP per person will fall by 16 percent, not by 1.4 percent, as followed by previous analyzes. Earlier calculations did not take into account how extreme weather phenomena – more frequent and more destructive drought and floods – can affect supply chains.
In the future, which will be warmer, we can expect cascading interference in supply chains caused by extreme weather phenomena around the world
– says Dr. Neal.
Scientists estimate today that The globe temperature will rise by 2.1 degrees Celsius, Even if countries around the world achieve short and long -term goals. Co -author of the study prof. Andy Pitman, an climatologist from UNSW, believes, however, that in fact everything is tested at extreme moments, which is why the average temperature is not crucial here.
– The transformation of economic models so that they take into account extreme phenomena in a given region and their impact on the supply chains, seems to be a really urgent task. Thanks to this, countries will be able to fully estimate their economic resistance to climate change and do what is obvious – to limit emissions – says prof. Pitman.
Some economists say that the losses generated by global warming will be balanced by insulation of cold earth areas, like Canada, Russia and northern Europe. Dr Timothy Neal, however, believes that global warming will hit countries around the world, because economies around the world are connected through trade.
Previous analyzes were incorrect and this is confirmed not only by universities
Models that did not include extreme weather phenomena are so -called Integrated evaluation models (IAM). They are used to determine the amount of funds that authorities should invest in reducing emissions. These models assumed that if production, e.g. agricultural, became unprofitable in some place, it would simply be moved to another place.
– As a result, these models showed that climate change would not be more important for the global economy, which, however, is contrary to conclusions flowing from sciences researching the physical effects of climate change and a more nuanced understanding of connections in the economy – says Professor Frank Jotzo, an expert on climate policy at the Australian National University, who did not participate in the research of Dr. Neal and prof. Pitman.
In addition, the conclusions of the last two survey are convergent with the conclusions of the Institute's January report and the acting department, representing the professional environment, which is responsible for decisions regarding risk management made by insurers and pension funds around the world. The report has shown that previous economic risk assessments did not take into account the actual effects of climate change, such as “critical points, extreme phenomena, migration, increase in sea level, impact on human health or geopolitical risk”.
The credibility of the discussed research is also confirmed by Mark Lawrence, who at the University of Adelaide examines climate risk, and in the past he worked in the financial risk management industry. – If at all, I believe that the impact of climate change on the economy will be even worse.