A new study has quantified the cost to the global economy of not achieving the commitments made in the Paris climate agreement in some $600 trillion this century, reports the AFP news agency.
Countries committed in the 2015 agreement to reduce their greenhouse gas emissions to limit the increase in global temperature this century well below 2 degrees Celsius above pre-industrial levels, and to pursue efforts to further limit it to 1.5 degrees Celsius.
Parties to the Paris Agreement put forward their efforts through “nationally determined contributions” (NDCs), their individual emissions reduction plans, and report regularly on their emissions and on their implementation efforts.
Currently the Earth is experiencing the effects of global warming in the form of heat waves, drought, wildfires and storm surges worsened by sea level rise, just with a 1 degree Celsius of warming.
To achieve the 1.5 degree Celsius target, global emissions should fall by over 7% per year until 2030, but given current NDCs the planet is likely to heat somewhere between 3 and 4 degrees Celsius above the historic baseline by the end of this century.
To date, few studies have estimated the potential net economic gain of taking action. In this new study, published in Nature Communications, experts consider different scenarios to calculate the net benefit to the global economy under different plans, considering the cost of low-carbon technology, of climate damage, and the notion that countries would pay a ‘fair share’.
Their findings show a global gain of $336 trillion if countries take action to keep temperature rise to 2 degrees Celsius, and $422 trillion if the temperature rise is limited to 1.5 degrees Celsius.
However, the global loss if the Paris temperature targets are not met can be as much as $600 trillion by 2100 ($126-616 trillion), an average 0.57 per cent of national annual GDP until that date.
Furthermore, the authors looked into the cost of not even achieving the commitments in current NDCs, which ranged from $150 trillion to $790 trillion. Because short-term economic gain has always come before climate action, countries miss out on the important cost benefits of acting early, said lead author Biying Yu. The estimated upfront investment in climate action necessary to reach a break-even point between mitigation costs and benefits globally would be $18-113 trillion, most of it (90%) from G20 countries.
‘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?’ questioned Yu.