August 22, 2019
A new analysis published this week outlines how rising temperatures caused by climate change are expected to hurt economic growth worldwide.
The findings — produced by researchers at the International Monetary Fund, the University of Cambridge, the University of Southern California, and the National Tsing Hua University in Taiwan — found that global GDP could fall more than 7 percent by 2100, should the average world temperature rise by .04 degrees Celsius every year.
The U.S., in particular, could see its real income fall by more than 10 percent.
"We do have time to make it up. It's not too late," Cambridge University economist Kamiar Mohaddes told Cheddar. "If we do commit to the Paris Agreement, we can reduce those massive losses quite substantially. So, for the U.S., in the case of commitment to the Paris Agreement, it would reduce the losses from about 10 percent of income to under 2 percent of income."
In 2017, President Donald Trump announced that the U.S. would withdraw from the Paris Agreement, though it can't formally do so until 2020, per the terms of the international agreement.
Mohaddes said that the study counteracts the notion that more affluent and colder countries might suffer fewer consequences, or even benefit, due to climate change. Canada could see more than 13 percent of its GDP lost, while Russia's economy could shrink by 9 percent, the study found.
The economist emphasized that climate change impacts sectors beyond agriculture. For instance, he explained that consumers forced to spend more than they typically would on heating — or cooling — will have reduced purchasing power, limiting their ability to spend in other ways.
"It's not just that the temperature is increasing, it's also that the variability in temperature is increasing, and the variability of rainfall, and precipitation, is increasing." Mohaddes said, explaining that more variable weather could harm employee productivity and shrink the economy.
"Often, we don't talk about the benefits of fighting climate change, and that's the number one thing we need to get home," he added. "In our study, we show that climate change impacts pretty much all of the sectors in the U.S economy, starting from agriculture and ending in retail [including] manufacturing, construction, transportation, and so on."