09/08/2021 at 3:13 PM CEST
Studies that have so far evaluated the economic costs of climate change may have significantly underestimated these monetary impacts, according to research conducted by the University College of London. Specifically, the study that has just been published in the journal Environmental Research Letters, assures that economic damage by the end of this century could be six times greater than previously estimated.
These types of projections are important because they help governments around the world calculate the costs and benefits of reducing greenhouse gas emissions. However, the models used so far have ignored highly relevant risks and therefore underestimated the costs that global warming will cause.
Currently, most models focus on analyzing short-term damage, assuming that climate change does not have a lasting effect on economic growth, despite growing evidence to the contrary. In fact, extreme events such as droughts, fires, heat waves, and storms are likely to cause long-term economic damage due to their impact on health, household economies, and labor productivity.
The study shows that by 2100, world GDP could be 37% lower than it would be without the impacts of warming, taking into account the effects of climate change on economic growth.
If long-term damages (excluded from most estimates so far) are not taken into account, GDP would be ‘only’ around 6% lower, which means that the impacts on growth can increase the economic costs of climate change by a factor of six.
However, there is still great uncertainty about how much climate damages affect growth in the long term and to what extent societies can adapt to reduce these damages. Depending on how much growth is affected, the economic costs of this century’s warming could reach up to 51% of world GDP.
The co-author of the study, Chris Brierley (UCL Geography), has declared in a statement issued by this university: “We do not yet know exactly what effect climate change will have on long-term economic growth, but it is unlikely that it will be zero, as they have made up most of the economic models. ‘
“Climate change makes damaging events, such as the recent heat wave in North America and the floods in Europe, much more frequent. If we stop assuming that economies recover from such events within months, the damage costs of warming appear much higher than is often claimed, “he adds.
The researchers also updated the model to take into account advances in climate science over the past decade, as well as the effect of climate change on the variability of mean annual temperatures, increasing the expected cost of climate change.
Calculating the cost per person
The authors calculated the effect of these changes on the ‘social cost of carbon’ (SCCO2), a crucial indicator that calculates the economic cost of emissions of greenhouse gases for society. Expressed in US dollars per tonne of carbon dioxide, estimates currently vary widely, between US $ 10 and US $ 1,000. However, by taking into account the most modern and detailed climate science and updated models, this new study suggests that the economic damage could in fact exceed $ 3,000 per tonne of CO2.
“Burning CO2 has a cost for society, even if it is not directly for our pockets. Emissions from each person could very well cost humanity more than 1,300 per year, increasing to more than 15,000, once the impacts of climate change on economic growth are included, ”said Dr. Brierley.
While the research shows large margins of uncertainty, the mean values were found to be much higher than what legislators currently assume. The US government, for example, currently uses a social cost of carbon of around $ 51 per ton to judge the costs and benefits of projects related to greenhouse gas emissions, while the EU Emissions Trading Scheme, which covers energy, manufacturing and aviation, recently exceeded 61 euros for the first time .
Study co-author Paul Waidelich (ETH Zürich) says that ‘the findings confirm that it is cheaper to reduce greenhouse gas emissions than to deal with the impacts of climate change, and the economic damages from continued warming would far outweigh the costs incurred. in prevention so far & rdquor ;.
“The risk that costs will be higher than previously assumed reaffirms the urgency of rapid and strong mitigation of emissions. Show that choosing not to reduce greenhouse gas emissions is an extremely risky economic strategy«He added.
The study’s lead author, Jarmo Kikstra (International Institute for Applied Systems Analysis and Imperial College London), believes that “it is very difficult to calculate the overall costs of climate change, but increasing scientific evidence has improved economic estimates. In this regard, science has improved a lot over the last decade, and these improvements do not change the order of magnitude of cost-benefit estimates.
“However, we have more doubts when it comes to answering how the economy will respond to future climate impacts. If we look closely at the long-term impact that climate can have on economies, we will see that costs could increase many times, depending on what climate actions we take, “he concluded.
Reference study: DOI: 10.1088 / 1748-9326 / ac1d0b
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