Climate Change Could Wipe Out 17 Percent Of Global Wealth By 2100
Man-made climate change is going to cost us, and in more ways than one.According to a new study in the journal Nature Climate Change, if warming reaches 2.5C (4.5F), financial assets worth $2.5 trillionwill be wiped from existence by 2100. This is a conservative estimate; in a worse-case scenario, this number rises to a jaw-dropping $24 trillion. Thats roughly 17 percent of the worlds worth, according to the study.
There is no scenario in which the risk to financial assets are unaffected by climate change, said ProfessorSimon Dietz, an economics-focused climatologist at the London School ofEconomics and the lead author of the study, to the Guardian. That is just a fiction.
A previous study has already highlighted the fact that climate change will hit peoples wallets, and for many, thats a far more tangible threat than the global temperature records we seem to keep breaking. Tracking gross domestic product (GDP) values a measure of a nations wealth with average annual temperatures over time, this team of economists discovered that economic productivity will fall by 23 percent by 2100 if current warming trends continue.
Importantly, this study revealed that the worlds wealthiest nations, including China and the U.S., will also suffer as a result of climate change (not just the poorest nations). This new study follows a similar methodology to theearlier one, using a variety of warming scenarios to check their effects on the global economy. They looked at how increasingly common extreme weather events, rising sea levels, and increasing temperatures will destroy financial assets and reduce economic productivity.
Increasingly common wildfires will directly wipe valuable assets off the face of the Earth. Jackal Yu/Shutterstock
Everything is affected by climate change. The warmer the world gets, the less productive its workers will be. Agriculture will suffer in many regions of the world that are set to become drier. Species extinction will start to break the food chain that we rely on for consumption. All in all, if warming continues unabated, 1.8 percent of the worlds worth will be gone by the end of the century. That may not sound like much, but that amounts to the entire GDP of Italy, India, Canada, or Australia.
The study also estimates that theres a one-in-a-hundred chance that unadulterated warming will lead to a global financial asset loss of 17 percent. Thats the entire European Unions worth, and roughly that of the U.S. and Chinas combined. No matter which way you look at it, thats a lot of cash going up in smoke.
Climate change is the problem that will make everything thats bad, worse. Marine and terrestrial ecosystems are already feeling the strain, and it wont be long before humanitys civilizations begin tosink under the waves, from the Maldives to New York City. As the Paris agreement last December and numerous public opinion polls show, there is aglobal consensusto stop the tides rising any further but its frankly ludicrous thatso little progresshas been made to date considering all thats at stake.
If warming is keptto 2C (3.6F),asagreed in Paris, well claw back $315 billion, although wed still be hemorrhaging money. Despairingly, though, the only way that the Paris target will be achieved is to refrain from building any more fossil fuel power plants anywhere in the world and this, at present, is looking like nothing short of impossible.