Climate change expected to penalize world GDP by 4%

28-04-2022

In the last ten years, storms, fires and floods have caused losses of about 0.3% of GDP per year worldwide.

Climate change is expected to penalize global GDP by 4% by 2050, according to an S&P Global study that analyzes the impact of rising sea levels, more regular heat waves, droughts, and storms on 135 countries that will be disproportionately affected.

Assuming a scenario in which governments largely backtrack on new climate change policies - known as "CPR 4.5" by scientists - middle- and low-income countries are estimated to face GDP losses that are 3.6 times greater on average than those of richer countries, according to the U.S. rating firm.

Bangladesh, India, Pakistan, and Sri Lanka's risk from fires, floods, major storms, and water shortages puts Asia's GDP 10%-18% at risk, about three times that of North America and ten times that of Europe, which is the least affected region.

Central Asia, the Middle East and North Africa, and regions of sub-Saharan Africa also face considerable losses; East Asian and Pacific countries face similar levels of risk as sub-Saharan Africa, but mainly due to storms and floods, rather than heat waves and drought.

According to the World Meteorological Organization (WMO), weather-related disasters have occurred daily in the world over the past 50 years, causing 115 deaths and more than $202 million in daily losses.

According to Sifon-Arevalo, some countries have already suffered credit rating downgrades due to extreme weather, such as some Caribbean islands following major hurricanes.

Source: AICEP