Climate change is slowing GDP and economic growth in 22% of countries around the world, new study finds

The planet is warming, and with persistent droughts and declining agricultural production hurting production in many parts of the world, climate change is emerging as a possible factor in slowing a country’s economic growth.

Climate change turns out to play a big role, and new research suggests that warming temperatures and climate-related impacts can leave permanent scars on a country’s economy.

The cumulative effects of rising temperatures over time are already hampering economic growth in nearly a quarter of the world’s economies, according to new research from the University of California, Davis published this week in the journal Environmental Research Letters. And it is also becoming increasingly difficult for countries to rebound economically from climate catastrophe.

Bernardo Bastien-Olvera, lead author of the study, said Fortune that his team’s research aimed to fill a gap in the existing literature on whether or not climate change could have long-term or even permanent impacts on an economy.

The results, he says, point in one direction.

“Many countries are affected by the long-lasting and persistent effects of rising temperatures on their economies,” he said.

Permanent economic impacts

Up to 22% of the world’s countries, mostly low-income countries in warmer climates, have already seen a reduction directly attributable to climate change in their gross domestic product, a key indicator of economic growth, according to the study. .

Bastien-Olvera and his team analyzed economic, temperature and precipitation data for the past 60 years in more than 170 countries, finding that in 39 of them, climate change has already left indelible marks.

Climate-fueled events like droughts and extreme heat events have had the greatest impact on reducing economic growth. The study found evidence of declining crop yields and cooling failures in cloud-based data centers as climate impacts that can leave a significant and lasting impression on a country’s economy. , forcing growth to slow over time.

According to the study, natural disasters exacerbated by warmer temperatures, such as hurricanes and wildfires, can also have a “persistent” and “long-lasting” effect on a country’s infrastructure and therefore its capacity. maintain economic production over time.

“If a hurricane hits infrastructure, that damage will likely be felt in the economy for days, weeks, or even years after the hurricane hits, and some of that will be reflected in GDP,” he said. Bastien Olvera.

The researchers filtered out shifts and shifts in climate and temperature data that occur regularly, and instead focused on phenomena that occur more irregularly and are worsened by climate change, such as El Niño-Southern Oscillation. , a periodic warming of the tropical Pacific. An ocean that can last between three and seven years, and dramatically changed precipitation rates and temperatures around the world.

The study found that events like El Niño, which is becoming more intense and frequent due to climate change, are already creating long-lasting temperature effects that are slowing economic growth in many parts of the world.

Low-frequency but high-impact events like El Niño are everywhere in today’s climate system, Bastien-Olvera said, and each plays a much larger — and long-term — role in altering the global climate. and economic growth of countries as first thought.

“We are looking at what climate change has already done

Many pricing mechanisms used to estimate the impact of climate change on the economy tend to look to costs that may be at a later date, such as the concept of the social cost of carbon, which attempts to set an exact price about the damage each additional ton of carbon released into the atmosphere will have in the future.

Bastien-Olvera and his colleagues intentionally wanted to avoid making future projections and instead looked at the impacts that climate change has already had on the current slowdown in economic growth.

“With this study, we are looking at what climate change has already done to countries’ economies, to inform how modellers should think about it in the future,” he said.

What Bastien-Olvera also found was that climate models would be wrong to treat climate impacts on an economy as short-lived, as a growing number of countries find it increasingly difficult to bounce back from disasters. climatic.

“When [modelers] think about projecting climate damage, they should no longer assume that the effects are only temporary, but that they are likely to have long-lasting and cumulative effects,” he said.

The world could lose up to 10% of its economic value by 2050 if temperatures continue to rise on their current trajectory, according to a study published last year by risk analysis group Swiss Re. report revealed that the loss could reach 18% if no measures to mitigate the temperature increase are taken.

Bastien-Olvera described an individual economy as a “punching bag”, and that his team’s study and the test model developed can help understand how an economy responds to climate impacts and how it can recover from a blow. .

“Every punch is like a climate shock. And we’re testing if the economy can bounce back,” he said. permanently and making it smaller and smaller?”

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Teresa H. Sadler