How climate change is hurting the African and global economies

by time news

2023-12-07 19:00:00

What if climate change affects global economic health more than we think? The question is at the heart of the latest report from Gerard J. Mangone, Climate change science and policy hub, from the University of Delaware, in the United States. The situation is all the more worrying as the author of the study, James Rising, assistant professor at the University of Delaware, sounds the alarm in these terms: “The world has become poorer by trillions dollars due to climate change, and most of this burden falls on poor countries. »

Published two days before the opening of the 28th United Nations Climate Conference (COP28) being held in Dubai, United Arab Emirates, the report by the Gerard J. Mangone climate change science and policy hub focuses particularly on economic losses global issues linked to climate change. The study suggests in particular “a strong correlation between GDP losses attributable to climate change and increased temperatures”.

A “stark contrast” between countries of the North and countries of the South

Based on a mapping of losses according to regions and economic zones of the world, the document comes to the conclusion that climate change has led, on a global scale, to a loss of 6.3% of GDP in 2022, weighted according to population. The unweighted percentage of global GDP lost is estimated at 1.8%, or around $1.5 trillion. “The difference between these two figures reflects the unequal distribution of impacts, which are concentrated in low-income countries and tropical regions, generally more populated and less rich in GDP,” underline the experts. In other words, “the economic impacts of climate change present a stark contrast between developed and developing countries”. Clearly, least developed countries (LDCs) are exposed to more GDP losses. The report highlights that unlike the global average, countries in the South and particularly tropical regions have borne the brunt of climate-related losses.

Among the continents most affected? Africa is at the forefront. Indeed, the continent recorded a GDP loss of 8.1% in 2022. This is, however, less than the losses recorded by South-East Asia which holds the prize for the most seriously affected region with a loss average of 14.1% of its GDP. “These staggering figures underline the vulnerability of these regions to climate change and its negative socio-economic effects,” explains the report.

These regions which are getting by

China, with a loss of 1.8% which had no impact on its GDP, and the United States are the best off. The impact of climate change on American GDP is rather zero, with a loss of 2%, but also a gain of the same level. In fact, the United States is in the wake of these regions “seeing economic benefits from climate change,” as the report states. In places, it must be said that these signals are even almost green, as the document by Gerard J. Mangone climate change science and policy hub suggests. This is the case for Europe and North Asia, which have a GDP 4.7% higher than the original one that they would have obtained without climate change. The report explains that these “benefits” arise from factors such as reduced winter cold, which in turn reduces energy consumption. But it is not a question of already declaring victory, especially since the report warns that “these advantages are on the verge of eroding and ultimately becoming negative”. And this, for the simple reason that “the planet continues to warm”.

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Beyond immediate losses, the paper published by the University of Delaware focuses on the impact of climate change on capital investments. It highlights “a decline in the total stock of manufactured capital” of countries, this manufactured capital which refers to human production and the physical entities which contribute to production and economic activity. “In general, countries facing climate impacts have reduced funds to invest in productive activities, which exacerbates the erosion of their economic capacity over time. The extent of these capital losses has critical long-term implications for economic resilience and the ability to sustain growth,” the report warns.

An impact on the capacity to support economic growth

According to the report, multiple sectors and channels contribute to understanding these effects, as well as the differences in outcomes observed in different regions of the world. Indeed, “the agriculture and manufacturing sectors are more sensitive to climate risks than the service industries,” according to the document. And added that “poor countries prove more vulnerable to these elements” while “the losses are greater for each additional degree of warming”.

In terms of costs, the figures are no less striking. Indeed, a combination of GDP and capital losses, which represents “total losses”, reveals that low- and middle-income countries have suffered a total loss of $21 trillion since the adoption of the Rio Convention. in 1992. This amount represents about half of the total GDP of the developing world in 2023. Impact estimates for the main COP negotiating groups and relevant stakeholders show that all party groups at the UNFCCC, at With the exception of the European Union, suffered total losses, the largest of which were those of the G-77 which amounted to 29,000 billion dollars.

For the author of the report, its conclusions “underscore the urgent need for global cooperation and concerted efforts to address the economic impacts of climate change”. It analyzes that “losses exacerbate existing global inequalities,” before recommending “comprehensive strategies to address the disproportionate burden faced by developing countries.” The study carried out in anticipation of COP28 could thus help decision-makers understand the urgency of the situation with a view to the effectiveness of the Loss and Damage Fund, the bases of which were drawn up at COP27. James Rising hopes the information in the report will help “clarify the challenges many countries are already facing today and the support they urgently need to address them”.

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