Page 28 - bne Magazine February 2023

28 I Companies & Markets bne February 2023
bne:Green
Apocalypse 2050: World on course for 15% GDP fall
Richard Lockhart in Edinburgh
The world is set to see global GDP plummet by a catastrophic 15% by 2050 if current emissions trends are not reined in and global warming reaches 2.2°C by 2050.
Oxford Economics warned in the latest report of its Global Climate Service that climate catastrophe was a major threat to the global economy, with cooler countries no longer benefiting from modest warming.
Yet the extend of the threat is staggering, with a 15% contraction likely if global emissions paths are followed. Indeed, total economic annihilation could happen if global warming continues at its current rate towards a 5°C increase by 2100, the report warned. This would mean mass extinction of most animal species, reinforcing the concern that the world cannot physically or economically cope with continued temperature rises.
Findings
The research group identified a tipping point of 1.1°C for temperature anomalies from average levels. Its research found that if temperatures rise beyond this departure from historical norms, then productivity growth will begin to flatline and fall.
In aggregate, 2.2°C of warming by 2050 has the potential to reduce global GDP levels 10-20%. Crucially, this compared to the 6.5% reduction that Oxford Economics previously forecast.
Looking further ahead, warming of up to 5°C by 2100 would lead to economic annihilation, consistent with scientific research on mass extinction thresholds.
Drought / bne IntelliNews
environmental problem, but is now a political, economic and social issue that must be addressed if humankind is to continue living the life it currently knows and to avoid a human apocalypse.
However, while the conference’s final communique reaffirmed the UN and governments’ desire to meet the 2015 Paris Agreement’s 1.5-degree goals, it did not make any new agreements that are binding on governments on how to it.
This lack of any new agreement on climate targets raises the importance of Oxford Economics’ apocalyptic warnings.
While COP27 failed to lay out new concrete targets, such measures are needed with the utmost urgency in order to protect the world’s people from the economic fallout of climate change.
Yet not is all bad news. The world has slowly started to make inroads into boosting renewable energy, even if CO2 emissions growth has yet to turn the corner.
The International Energy Agency (IEA) said earlier this month that solar was set to overtake coal as the world’s leading source of power supply by early 2025. It also
Put simply, if climate change continues at current rates,
or even just fails to meet the Paris Agreement targets of 1.5°C, then large swathes of the world could no longer become inhabitable, leading to mass human suffering, mass migration patterns from hot to cooler countries and the meltdown of the global economic system.
The report chimes with one of the conclusions to come out of COP27: that climate change is no longer just a climate or
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2025 2030 2035 2040
2045 2050
World: GDP, real
% difference from baseline -1%
-3%
-5%
-7%
-9% -11% -13% -15%
Net Zero
Climate Catastrophe
Source: Oxford Economics / Haver Analytics