Economics professors from Stanford and Northwestern Universities determined that the economic damages of a warming climate are probably six times worse than we previously thought.
According to their research, every one degree Celsius rise in global temperature (or 1.8 degrees Fahrenheit) leads to a 12% decrease in the world's gross domestic product.
What is the connection between the changing climate and the economy?
As Harvard Magazine reported, assistant economics professor Adrien Bilal and his collaborator, Diego Kanzig, took an innovative approach to modeling the economic impacts of a changing climate. Instead of solely basing their analysis on local temperature changes, they studied extreme weather patterns, warming oceans, and global shifts more thoroughly.
They studied data from 173 countries over the past 120 years, looking at how temperature shocks correlated to changes in income. They found that disruptive weather is costly to nations' economies and impacts individuals' purchasing power and financial stability.
Why are GDP changes important?
Bilal and Kanzig's research reinforces the interconnectedness of economics and a warming climate. They assessed the "social cost of carbon" at over $1,000 per ton, representing the economic damage caused by each ton of carbon pollution. This is a significant increase from the $150 per ton predicted by past models that didn't consider as many climate factors, the magazine reported.
The researchers predicted a future GDP decline of 30% to 50% by 2100 based on current patterns. For individuals, they predicted a 31% drop in purchasing power by 2100 due to climate change.
"The effects are more uniformly detrimental," Bilal told the magazine. "It's bad for almost everyone."
How economics prompts climate action
Estimating how rising temperatures affect the economy enables lawmakers to prepare for shifts and choose how to reduce carbon pollution in their communities.
Politicians typically place less importance on sustainability and environmental protection if the perceived effects on the economy are low. However, if economic impacts are high, they will pour more time, energy, money, and resources into conserving the planet because of the direct links to their countries' economic stability and success.
Bilal and Kanzig's research encourages world leaders to answer the critical question of how to invest in climate resilience and adapt to changing weather patterns to minimize the economic impacts. They suggested various ways to take local action, including coastal defense strategies, relocations to less vulnerable areas, and shifting investments.
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Definitely 👍 Staying up-to-date on critical climate issues is essential to understanding the problem's gravity and being open-minded to proactive solutions.
The economic impacts of rising temperatures are just one of the many reasons why it is crucial to change individual and community habits now for the health of our people and planet. However, those economic risks could be the very thing that pushes policymakers to take climate change seriously and prioritize sustainability efforts for the benefit of everyone.
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