by Daanyal Raja
According to new analysis, warmer climates could lead to a drop of up to 20% of the global GDP, which could become a large factor to worldwide inequality. Research on the relationship between rising temperatures and economic output was recently published by Oxford Economics, which highlighted a divide between nations that have temperatures above and below 15° Celsius (59° Fahrenheit), the supposed “sweet spot” for economic activity. Countries that have annual temperatures which are cooler than 15°C will benefit in the short term from rising temperatures. However, tropical countries whose average temperatures are already above 15°C, especially most countries in the Southern part of the planet, face disastrous economic decline.
The projection relied on comparing the relationship between GDP and temperature. After analyzing historical data, the researchers used projections with similar trends for the rest of the century to produce their results. The research assumes that global temperatures will rise by 3°C and won’t face aggressive efforts against it. The analysis is an update to a 2015 study in the journal Nature which introduced the idea and technique of projecting climate change’s impact on the global economy. The updated research includes 40 more countries as well as 10 more years of data. In addition, the original study from 2015 has become a helpful tool, as it has gone on to inform the International Monetary Fund’s climate work.
Economists have dismissed climate change, labeling it as a future problem that still needs more time in order to be studied according to James Nixon, the chief European economist at Oxford Economics as well as the author of the new research. “Obviously, when you get into the literature, you realize that’s not quite the case,” Nixon told Bloomberg Green. “Because we’re producing long-term forecasts for countries like India who are likely to be adversely affected by climate change, we need to find a way of quantifying and thinking about how much we should be writing down their forecast.”
Nixon believes his work is like “trying to put a number on things that haven’t happened yet,” ultimately drawing critiques due to the uncertainty of projections as well as the complexity of the issues at hand. It should come with no surprise that the new Oxford Economics paper bluntly states, “putting a number on the economic impact of global warming is extremely difficult.”