We know the science behind climate change is quite scary — just ask the 97% of scientists who have come to the same conclusion that it’s caused by humans.
If that statistic does not get you, perhaps the mounting evidence towards climate change affecting the global economy will.
In recent years, we have seen recent studies (here, here, and here) all overwhelmingly point out that if there is no dramatic change in reducing carbon emissions, there will be consequences for our economy.
Now a recent Nature paper, based on research from both Stanford University and the University of California – Berkeley, California researchers confirm what’s already known: Climate change is an overall loss for the world economy.
The report used average annual temperatures from 1960 to 2010. This data was taken and compared to the yearly economic performance by each nation by researchers. High-end statistical techniques were used in separating temperature outcomes from different factors, including financial and political cycles. Then climate models were used to predict future temperatures, allowing researchers to project economic growth over the remaining century.
The compiled research there provides some interesting analysis on future global economic impacts of climate change. By the end of the century, the report found global income would be 23% less than without climate change.
A warming planet may cause the un-evening of the global economy. Northern countries, including Russia, Northern Europe, and Canada, may see help from climate change, compared to other parts of the world. One example which is already happening is the growing of corn, which is grown in US bread basket states including Illinois and Iowa. However, Canadian prairie farmers, including parts of Manitoba, are growing more corn, as the growing season has increased by two weeks within the past fifty years.
Solomon Hsiang, a professor at the Goldman School of Public Policy at UC Berkeley who headed up the research team, told MIT Technology Review it’s possible a major restructuring of the global economic system is possible thanks to climate change. Hsiang notes the differences of economic circumstances in the future is potentially stunning. According to charts, the US could see a 5% drop in gross domestic product (GDP) by 2050, and a drop of 36% by 2099.
“There will be a huge redistribution of wealth from the global poor to the wealthy,” said Hsiang.
Poorer countries will be the hardest hit economically by climate change. The report suggested that average income from 60% of citizens from the poorest nations will see a 70% decline at the end of the century, due to the effects of climate change.
A warming world will also impact economic inputs. The analysis found crop yields, labor productivity, and labor supply decline sharply between 20C and 30C.
Hsiang also suggested data which shows that when days are higher than 30C, a citizen in a standard US county loses $20 in unearned income.
Thomas Friedman, in his recent book Thank You For Being Late, talks about how we are currently entering an “age of acceleration” due to the rapid pace of technology advancement, globalization and environmental degradation, including climate change. The challenges of rapid climate change affecting the economy are clear and accelerating quickly. However, the opportunities, thanks to a dramatic fall of renewable energy prices, including solar, wind energy, and electric vehicle batteries, offer hope we can transition away from a fossil-fuel based economy before the worst impacts hurt our overall global economic system.