Climate Disasters Could Slash Global Growth by 3% in Next Five Years, Warns NGFS
The Network for Greening the Financial System (NGFS) warns that climate disasters could slash global economic growth by up to 3% in the next five years. The impact of past warming, already at 1.2°C, has cost the world 2% of its income, or USD$1.6tn.
Climate change is not just a rural issue; it's hitting industries like transport, manufacturing, and retail hard. A new study by Kamiar Mohaddes and Mehdi Raissi reveals that hotter and low-income countries could face losses 30% to 60% higher than the global average. Regions like Sub-Saharan Africa, South Asia, and parts of Latin America are particularly vulnerable.
Meeting the Paris Agreement goals could boost global per capita income by 0.25%. However, under current policies, global GDP losses could reach 30% by 2100, with tail risks of up to 50%. Even rich countries like Saudi Arabia, UAE, South Korea, Mexico, and Australia, along with cold countries like Sweden and Finland, will be significantly affected. Unmitigated global warming could reduce per capita income by 23% by 2100. Canada and the US could face income losses of up to 31% and 28% respectively.
The NGFS's stark warnings underscore the urgent need for climate action. Mitigating global warming could prevent catastrophic economic losses and ensure a more equitable future for all nations.
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