New analysis has shown the failure of the world to fulfil the promises made in the United Nations sponsored Paris Agreement on climate change to make drastic emissions cuts could cost the global economy as much as US$600 trillion this century.
Under the landmark 2015 accord, countries pledged to voluntarily reduce greenhouse gas emissions from the burning of fossil fuels in order to limit global temperature rises to “well below” two degrees Celsius.
The French newsagency AFP reports the deal committed states to work towards a safer temperature cap of 1.5°C, through individual emissions reductions plans, known as nationally determined contributions (NDCs).
With just 1.0°C of warming since pre-industrial times, Earth is already undergoing devastating heatwaves, drought, wildfires and storm surges made worse by rising seas.
If nations do not meet their current goals for reducing greenhouse gas emissions, the global economy could lose around US$150-792 trillion in just one lifetime, according to a study published in the journal Nature Communications.
If, however, they join forces in a global cooperation strategy to achieve the Paris Agreement targets of two or 1.5-degrees Celsius, the economic benefits of avoiding further climate-related damage could yield $127-$616 trillion by 2100.
AFP reports the UN has said that global emissions must fall by more than seven per cent every year between now and 2030 to hit the 1.5°C target.
Yet countries’ current NDCs put Earth on course to heat by far more by 2100, between 3.0°C and 4.0°C above the historic baseline.
AFP reports while several studies have sought to estimate the economic cost of failure to mitigate climate change, few have tried to quantify the potential net economic gain rapid action could bring.
Writing in Nature Communications, an international team of climate experts simulated the costs of global cooperative action under a variety of scenarios.
Considering aspects such as warming thresholds, the cost of low-carbon technology, the cost of climate damage and the idea of countries paying their “fair share” towards fixing the problem, the team was able to quantify net benefit, that is how much the global economy stood to gain under various plans.
They found that the world would gain US$336tn to US$422tn by 2100 if action was taken to keep warming to 2.0°C and 1.5°C respectively.
However, if they fail to achieve the Paris Agreement temperature goals, countries stand to lose up to US$600tn by century’s end.
This amounts to an average loss of 0.57 per cent of national GDP annually to 2100.
With the United States set to leave the Paris Agreement this year, the researchers also looked at the cost of countries failing even to live up to their current NDC pledges.
That loss ranged between US$150tn and US$790tn, up to 7.5 times current global GDP.
“We think that if every country or region can greatly enhance their actions for emission mitigation, it is possible to achieve the 1.5C,” said lead study author Dr Biying Yu, an associate professor at the Beijing Institute of Technology.
“But implementing such a self-preservation strategy in a real word requires countries to recognise the gravity of global warming and to make breakthroughs in low-carbon technologies.”
Dr Yu said countries had traditionally prioritised short-term economic gain over climate action, and were therefore missing out on significant cost benefits from moving early.
“Without the upfront investment, emissions cannot be reduced, and the climate damage will occur with higher probability, which will result in huge economic loss,” he said.
The study found that global upfront climate investment would need to be US$18-113tn in order for the world to “break even” in its climate plan.
More than 90 per cent of this should come from G20 nations, the research found.
“If countries are well aware of the huge losses they will suffer if they don’t reduce emissions will they be more rational in making choices that will protect them, thereby boosting their response to climate change and driving the global climate governance process?” said Dr Yu.
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