CDP: Paris Agreement alignment could cut climate change costs by two-thirds
The mean damage costs of climate change will reach $5.4trn annually by 2070 and "spiral" to up to $31trn per year by 2200 if the global temperature rise hits 4.4C by the end of this century - which it will unless 'business-as-usual' is transformed.
That is the damning conclusion of new research from CDP and University College London, entitled ‘Costing the Earth: Climate Damage Costs and GDP’.
The report outlines how costs resulting from natural disaster remediation, mass climate-related migration, increased healthcare demands and shortages of key commodities - all resulting from the climate and nature crises- will impact global GDP in the coming decades. Also assessed are the costs of transitioning energy systems and adapting business operations to heat stress – particularly agriculture. A business-as-usual scenario of 4.4C of temperature increase since the industrial revolution is considered alongside the Paris Agreement’s less ambitious 2C trajectory.
In the business-as-usual scenario, global GDP growth will fall by 10% by 2050, against a 2018 baseline. The reduction in growth will be amplified to 25% by 2100. The impact of this trend will not be felt universally – developing nations in Asia, the Middle East and South America will see damages materialising more rapidly and intensely due to their climate risk exposure and reliance on fossil fuels.
In the 2C scenario, however, global GDP growth rates will be maintained. The annual cost of dealing with climate-related damages in this scenario sits at $1.8trn in 2070 – just one-third of the estimate for a 4.4C scenario – and is likely to rise less sharply in the longer-term.
While acknowledging that adaptation and mitigation measures bear high price tags, the report outlines how the economic and non-economic costs of action will, in the 2C scenario, be a fraction of those associated with inaction. Developed nations like Canada and EU member states may see high bills for immediate action but this is largely because they have experienced good rates of GDP growth, the report explains.
CDP and UCL are using the findings to call on governments to better assess the long-term impacts of climate change on the economy as they develop their Covid-19 recovery plans. The UK Government is notably due to provide a GDP update later this week.
“Given the potential scale of damage costs and the implications for disruption in the global system, economic actors cannot just wait for the right regulatory policies to be put into place,” CDP’s head of investor research Carole Ferguson said.
“Policymakers, corporates and the financial system, which will be impacted, should be proactive in investing in mitigation and adaptation to avoid these high damage costs.”
Hot off the press
Climate announcements from businesses have been few and far between since Climate Week NYC came to a close last month.
But The Guardian Media Group has today (5 October) published its plans for meeting its 2030 net-zero target, set last year. The publisher said in a letter to readers that it will be able to reduce emissions by two-thirds across all scopes by the end of the decade and will only purchase carbon credits to deal with the “residual” third.
Plans for reduction include shifting to renewable electricity, reducing miles associated with business travel and commuting and changing packaging to prioritise more resource-efficient options. As for offsetting, the company has promised to release its plans for ensuring that schemes are “certified and auditable” in the coming months.
Mindful of its reach and the fact that readers will, collectively, have a higher climate impact and influence than the company itself, it has launched a climate data dashboard called ‘Environment Now’. Similarly to Bloomberg’s climate dashboard, the digital tool showcases up-to-date stats on trends such as ice mass cover and sea level.
The launch of the tool builds on The Guardian’s decision to refresh its style guide in order to urge writers to stop using the term “climate change” and to swap it for “global heating”, “climate crisis” or “climate emergency”. Since that decision was taken in May 2019, the newspaper has also pledged to use more images of people – and fewer of polar bears – alongside climate coverage, to emphasise the impacts on humanity, and vowed to stop advertising and sponsorship deals with fossil fuel producers.