Climate change costs more than the loss from extreme weather damage, lives and livelihood. It has a heavy impact on the world’s economy – reducing the global gross domestic product by 1.6% or $1.2 trillion a year, and rising. The loss is unevenly distributed, with low-income developing nations getting hit the hardest. Actions to mitigate the effects are required now, as the cost of mitigation balloons with every moment. Read more

Climate Change Reducing Global GDP by $1.2 Trillion

By Ehren Goossens in BusinessWeek (26 September 2012):

Climate change and pollution related to carbon-dioxide emissions are reducing the world’s gross domestic product by 1.6 percent a year, about $1.2 trillion, according to a report.

If unchecked, rising temperatures may cut global GDP by 3.2 percent a year by 2030, according to the Climate Vulnerability Monitor, from by the Madrid-based humanitarian group DARA and the Climate Vulnerable Forum.

As the economic impact of climate change grows, so will the cost of curbing it, according to leaders of developing nations who spoke at an event in New York today.

“What is possible with $100 billion today, will cost ten times more in 2030,” Bangladesh Prime Minister Sheikh Hasina Wajed said during the panel discussion, part of the Climate Week NYC conference. Her country is part of the Climate Vulnerable Forum, a group of developing nations threatened by climate change.

A warming planet will have a disproportionate effect on developing countries, especially low-income states such as Bangladesh that have high population density and fewer natural resources. Low-lying coastal regions also face the prospect of being submerged as the oceans rise, she said.

This will affect food production and drive up prices, she said. Climate change may cut GDP in some developing nations by as much as 11 percent by 2030.

Those losses far exceed the cost of reducing emissions, which the report estimated at about 0.5 percent of GDP over the next decade.

‘Side Effect’

Some people dismiss the gradual loss of some small islands as a “side effect” of development, said Maldives President Mohamed Waheed. That view doesn’t take into account the impact on the global community, such as finding new homes for displace populations. “We are all on the same sinking boat.”

Climate change was responsible for about 5 million deaths in 2010, including 400,000 related to hunger and diseases and 4.5 million from air pollution, according to the report.

Tackling climate changing emissions offers an economic opportunity, former Costa Rican President Jose Maria Figueres said on the panel discussion. His country gets 92 percent of its power from renewable sources. “There is a lot of low-hanging fruit that can be transformed into jobs, new business models, opportunity for investment and ways in which to finance development,” he said.

$1 Trillion Invested

Investment in clean energy passed more than $1 trillion last year, according to Bloomberg New Energy Finance, driven in part by international efforts to curb climate change and develop global policies. That “would not have been there if we didn’t have this nagging process,” Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change and the sister of Costa Rica’s former leader, said at another event yesterday.

Global agreements would spur private support from investors who want predictability in regulation, she said. “The issue is more urgent and more deeply impacting than we had ever thought.”

Source: www.businessweek.com