World GDP could fall 40% if the planet heats four degrees

A four -degree planetary warming compared to pre -industrial levels could reduce world GDP about 40% in 2100, compared to 11% of previous estimates.

That is the conclusion of a study led by the Institute of Climate Risk and Response (ICRR) of the University of Nueva Gales del Sur (Australia) and published in the magazine ‘Environmental Research Letters’.

This analysis corrects an error in the economic model that supports the current global climate policy, overcoming the previous carbon parameters.

The results support the limitation of global warming to 1.7 degrees, in line with significantly faster decarbonization objectives endorsed by the Paris Agreement, and is much less than the 2.7 degrees backed by the previous models.

Timothy Neal, ICRR and the Faculty of Economics of the University of Nueva Gales del Sur, indicates that this analysis uses traditional economic frameworks that weigh the immediate transition costs against long -term climatic damage, but refine a key fact.

“Traditionally, economists have analyzed historical data that compare meteorological phenomena with economic growth to calculate the cost of climatic damage,” he says.

What does not take into account, according to Neal, are the interruptions in the global supply chains that currently cushion economic shocks.

“To date, projections on how climate change will affect world GDP have suggested, in general, damage from minor to moderate. This, in part, has caused a lack of urgency in national efforts to reduce greenhouse gas emissions,” Neal Apostille.

Global supply chain

In the hottest future, supply chain interruptions can be expected caused by extreme weather phenomena worldwide. Neal considers “clear” economic justification to take more energetic measures against climate change.

Neal indicates that the previous climatic projections usually present “a fundamental failure: they assume that the national economy is only affected by the climate in that country”, so that the meteorological impacts in other places are not incorporated into the climatic models.

For example, in the past, South America could have suffered droughts, but other parts of the world received good rains. Therefore, South America could depend on imports of agricultural products from other countries to cover internal shortage and avoid sudden increases in food prices.

Neal emphasizes that this updated projection should help all nations that are vulnerable to climate change. Some colder countries, such as Russia or Canada, could benefit from climate change, but supply chain dependence means that no country is immune.

Neal points out that the damage caused by extreme meteorological phenomena is evident. “Droughts can cause bad harvests, while storms and floods can cause generalized destruction and interrupt the supply of goods,” he says.

Recent research has also shown that heat waves, aggravated by climate change, have contributed to food prices inflation.

“Heat also reduces the productivity of workers. It affects human health and the transmission of diseases, and can cause mass migrations and conflicts,” says Neal.

“Disturbances”

Neal points out that “future climate change will increase the risk of simultaneous climatic disturbances in different countries and more persistently,” which “disturbs the networks of production and distribution of goods, will compromise trade and limit the ability of countries to help each other.”

“International trade is essential for global economic production. Therefore, our research examined how climatic conditions in the rest of the world would influence the future economic growth of a country,” he concludes.

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World GDP could fall 40% if the planet heats four degrees