Climate change is already contributing to the deaths of nearly 400,000 people a year and costing the world more than $1.2 trillion, wiping 1.6% annually from global GDP.
Scientists and economists are beginning to grapple with the serious economic and environmental consequences we will face if we fail to reduce greenhouse gas emissions quickly and deeply. The most expensive thing we can do is nothing. Globally economies are already being impacted in the following ways;
Lost productivity from climate disruption, floods, tropical storms, heatwaves, snow storms, etc. Developed and developing countries are being affected but the poor are being hit the hardest. In addition climate-related health impacts are exacerbating production losses, especially in countries with weak health services.
Damage to property and infrastructure. Existing investments are becoming vulnerable to disaster risk, requiring increased investment in protection and repair. Investments are becoming increasingly susceptible to sea-level rise, floods, droughts, wildfires and extreme storms.
Mass migration and insecurity. We are seeing increasing numbers of climate refugees, people who are forced to flee their homes due to drought, flooding, sea-level rise or other climate-related disasters. Movements of people are causing social change potentially leading to political and civil unrest.
Coping costs. There are ways to adapt to some climate impacts but they all carry a cost, even a partial accounting of these costs suggests that adaptation is likely to be more costly than steps to reduce carbon emissions. The latest IPCC report indicates a 0.8oC rise since 1990. The current limited global ambition to reduce greenhouse gas emissions means it may already be too late to avoid more of the impacts described above.
Practical Action is working with developing country governments to better understand the consequences of climate change on their national economies. We have so far supported the governments of Nepal and Peru to undertake national economic impact assessments.
Economic Impact Assessment of Climate Change in Key Sectors in Nepal (2012 - 2013)
Overall, the study concludes that the economic costs of climate change in Nepal for agriculture, hydroelectricity and water-induced disasters could be equivalent to 2–3% of current GDP, equivalent to $0.5 billion a year, or a total cost of $9 billion by 2030. The additional investment to build resilience in current/future plans in the three sectors, from now to 2030, was estimated at a total of US$2.4 billion an investment that could generate a return on investment of at least $6.6 billion.
IADB (Inter-American Development Bank) Economic Impacts of Climate Change in Peru (2011-2012)
The study predicts that fishing, agriculture and livestock in the high Andes are the sectors likely to be most affected by climate change in the coming years. The study also anticipates negative impacts on hydroelectric power, mining, tourism, health and infrastructure. The final report (presented at the UN Climate Change Conference in Lima, Peru in December 2014) anticipates significant economic losses by 2100.