New Study Quantifies the Costs of Climate Change

According to a new study, the current economic impacts of climate change are more than $1.2 trillion a year, or 1.6 percent of the annual global GDP. The 331-page study was launched on September 26th, 2012, it is the second edition of the Climate Vulnerability Monitor: A Guide to the Cold Calculus of A Hot Planet. The study was produced by the DARA research center and released at the Asia Society in New York. More than 50 scientists, economists and policy experts contributed to the report which was commissioned by 20 governments. Climate change is already contributing to the deaths of nearly 700,000 people a year, with almost 80 percent occurring among children in South Asia and Sub-Saharan Africa. Agricultural production is being hurt by climate change-induced extreme weather causing deaths from malnutrition, poverty and their associated diseases. Air pollution caused by fossil fuels is also contributing to the deaths of an additional 4.5 million people a year.

Bangladesh illustrates the greater costs being incurred by developing nations. While the current global average cost of climate change is 1.6 percent of the annual GDP, Bangladesh faces total losses of about 3-4 percent of GDP due to climate change.

According to the report in less than two decades, climate change could kill more than 100 million people. A total of 6 million people could die annually by 2030 if action is not taken. More than 98% of those deaths will occur in developing countries.

The researchers estimate that by 2030 the cost of climate change and air pollution combined will rise to 3.2 percent of global GDP. Climate change will have the biggest impact in the developing world, which according to the report will suffer losses of up to 11 percent of their GDP.

Major economies like the US are expected to experience a 2 percent decline in GDP by 2030, while China is expected to lose $1.2 trillion.

The report concluded, “[T]he worst impacts of climate change … can still be avoided if strong action is taken in the very near future to reduce greenhouse gas emissions that lead to the earth’s warming.” The report indicates that creating a low-carbon economy would require only 0.5% of GDP over the next ten years.

“Reducing short-lived climate pollutants provides the fast mitigation that the world needs to save millions of lives and avoid the worst of the predicted climate impacts,” Durwood Zaelke, President of the Institute for Governance and Sustainable Development was quoted as saying. The short-lived climate pollutants (SLCP)include black carbon, tropospheric ozone, methane, and hydrofluorocarbons (HFCs).

Unprecedented Arctic ice melt and severe drought in the US are clear indications that we are already experiencing the effects of climate change. This is sure to worsen as long as we do not take the necessary steps to reduce global emissions.