Climate breakdown threatens economic breakdown

Climate breakdown impacts could cause damage to the UK equivalent to cutting the size of the economy by at least 7.4 percent by the end of this century, unless there are stronger reductions in global greenhouse gas emissions. 

This is the “stark warming” contained in a report published today (30 May 2022) by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE).

A team of researchers in the UK and United States analysed a range of previous studies to estimate the likely consequences of climate change from “catastrophic disruption to the global economic system” and direct effects across nine “impact channels”, including agriculture, livestock and fisheries, drought, flooding and coastal damage.

Mitigation

The researchers assumed that current climate policies worldwide would lead to a global temperature that is 3.9 Celsius degrees higher than its pre-industrial level by 2100.

Total climate change costs were found to increase from the equivalent of 1.1 per cent of UK gross domestic product (GDP) at present, to 3.3 percent by 2050, and 7.4 percent by 2100.

Cutting global emissions to net zero by 2075 would limit warming to 2.1 Celsius degrees by 2100 compared with pre-industrial level, and would slash the costs the damage to the UK from climate impacts to the equivalent of 2.4 per cent of GDP, a decrease of 5.0 percentage points compared with climate change losses to the UK economy resulting from current policies worldwide.

Dr James Rising, who led the analysis at the University of Delaware, said: “These estimates provide both a stark warning of the future economic damage to the UK resulting from a lack of climate action, and a comparison between the costs of climate change impacts and the costs of reducing emissions”.

“We estimate that the mitigation costs involved in the UK’s pathway to net zero by 2050 are unlikely to exceed the equivalent of 2 per cent of GDP over the transition period.

Risk

“Furthermore, climate mitigation policies bring additional benefits, for example by improving health and invigorating of the economy through investment, equivalent to an increase of 6.1 per cent in GDP by the end of this century.”

The researchers found that achieving the UK’s net zero target would provide added benefits to the UK beyond avoided climate impacts that would be equivalent to an increase of 3.3 percent in GDP.

They would also provide a further boost of 2.8 percent to the UK’s economy by stimulating investment in green industries and infrastructure.

Altogether, a scenario in which the UK reaches net zero emissions by 2050, and the world as a whole achieves the same target by 2075, would result in net economic benefits to the UK economy by the end of the century that would be equivalent to an increase in GDP of 9.1 percent.

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