A study by Australian researchers has revealed that a 4-degree Celsius rise in global temperatures could lead to a dramatic 40% reduction in world GDP by the year 2100, a sharp increase from previous estimates of around 11%. The findings, published Tuesday in the journal ‘Environmental Research’, have significant implications for global climate policy and underscore the urgent need for faster action on climate change.
The research, conducted by the University of New South Wales (UNSW) Institute for Climate Risk and Response (ICRR), identifies a critical oversight in traditional economic models that has influenced climate policy to date. Unlike earlier studies that relied on historical data comparing weather events to economic growth, the new analysis takes into account the impact of global supply chain disruptions caused by extreme weather events. This adjustment significantly alters previous projections, revealing a far more severe economic outcome from climate change.
Lead researcher Dr. Timothy Neal, a ‘Scientia Senior Lecturer’ in Economics at UNSW and a key member of the ICRR, explained that while economists have traditionally based their models on local damage assessments, they have failed to consider how extreme weather will disrupt global supply chains. These disruptions, Dr. Neal emphasized, could have cascading effects on economies worldwide.
“In a hotter future, we can expect more frequent and severe interruptions to global supply chains, triggered by extreme weather events,” said Dr. Neal. “This has profound implications for the economy that have not been fully accounted for in previous models.”
The study’s updated projections strongly support efforts to limit global warming to 1.7°C, aligning with the ambitious decarbonization targets outlined in the Paris Agreement. This new target is significantly lower than the previous 2.7°C threshold that had been widely considered acceptable under earlier models.
Dr. Neal further emphasized the clear economic case for stronger climate action, noting that past models had underestimated the severity of climate change’s impact on global economies. “Because these damages haven’t been taken into account, prior economic models have inadvertently concluded that even severe climate change wasn’t a big problem for the economy,” he said. “This oversight has had profound implications for climate policy and decision-making.”
The study also challenges the assumption that some countries, particularly colder regions like Russia and Canada, might benefit from climate change. According to Dr. Neal, the interconnectedness of global supply chains means no country is immune to the economic fallout from climate change. “Even countries that may experience some localized benefits will face significant risks from disruptions to global trade,” he added.
While the findings make a strong case for urgent climate action, the study also acknowledges the need for further research. Specifically, it does not account for potential climate adaptation measures, such as human migration, which remains a politically and logistically complex issue that has not yet been fully modeled.
(Reuters)