‘Climate change could shave 4% off global GDP by 2050’
LONDON: Climate change could see 4% of global annual economic output lost by 2050 and hit many poorer parts of the world disproportionately hard, a new study of 135 countries has estimated.
Ratings firm S&P Global, which gives countries credit scores based on the health of their economies, published a report on Tuesday looking at the likely impact of rising sea levels, and more regular heat waves, droughts and storms.
In a baseline scenario where governments largely shy away from major new climate change policies – known as ‘RCP 4.5’ by scientists – lower- and lower-middle income countries are likely to see 3.6 times greater gross domestic product (GDP) losses on average than richer ones.
Bangladesh, India, Pakistan and Sri Lanka’s exposure to wildfires, floods, major storms and also water shortages mean South Asia has 10%-18% of GDP at risk, roughly treble that of North America and 10 times more than the least-affected region, Europe.
Central Asia, the Middle East and North Africa and Sub-Saharan Africa regions all face siezable losses too. East Asia and Pacific countries face similar levels of exposure as SubSaharan Africa, but mainly because of storms and floods rather than heat waves and drought.
“To different degrees, this is an issue for the world,” said S&P’s top government credit analyst, Roberto Sifon-Arevalo. “One thing that really jumps out is the need for
international support for many of these (poorer) parts of the world.”
Countries around the equator or small islands tend to be more at risk, while economies more reliant on sectors such as agriculture are likely to be more affected than those with large services sectors.
For most countries, exposure to, and costs from climate change are already increasing. Over the past 10 years, storms, wildfires, and floods alone have caused losses of around 0.3% of GDP per year globally according insurance firm Swiss Re.
The World Meteorological Organization also calculates that, on average, a weather, climate, or water-related disaster has occurred somewhere in the world every day for the last 50 years, causing 115 daily deaths and over US$202 million (RM880.7 million) in daily losses.
S&P’s Sifon-Arevalo said that some countries have already suffered credit ratings downgrades due to extreme weather, such as some Caribbean Islands after major hurricanes.