UK economy faces losses of 10% of GDP by 2100 if warming reaches 4°C, study finds

The UK economy could suffer damages of about 10% of gross domestic product if global warming reaches 4°C by 2100, according to new research . “Existing warming has already reduced UK welfare by about 2% of GDP, rising to around 10% by the end of the century under a high-emissions pathway - about half of which comes from catastrophic and missing risks. Strong mitigation substantially limits these damages,” said James Rising of the University of Delaware, who led the research. Another study predicts global warming could wipe almost a quarter off per capita income by 2100 , and the losses could be 30% to 60% higher than the global average in hotter and low-income countries. The international team of researchers behind the new report note that most estimates of the economic impact of climate change are “fragmented, incomplete and deeply uncertain” and said the UK provided a useful test case because many models and studies have been produced on the topic in the country. While current warming is causing damages of 1% to 4 % of GDP, these would grow to 2% to 20% by 2100 if global temperatures keep rising. The report says half the expected damages would be due to catastrophic impacts, such as melting of the polar ice caps and rapid sea level rise, while another major contribution would be so-called “spillover effects” from the damage caused by climate change in other countries that disrupt trade or labour productivity in the UK. The Bank of England recently changed its collateral framework to account for climate-related risks in a move similar to that taken by the European Central Bank. The authors note that the study does not take into account possible adaptation measures to make the economy more resilient to climate change and "as a result, it is difficult to say whether we are more at risk of underestimating or overestimating total damages”. However, the report does conclude that if global emissions are cut strongly and warming is kept below 2°C, then the damages would be lower - likely 1% to 7 % of GDP. The Network for Greening the Financial System (NGFS) has predicted that climate disasters could dent global economic growth by up to 3% within the next five years, but the damage could be limited if governments keep up efforts to promote a green transition. The NGFS, a global group of 143 central banks set up in 2017 in Paris, also predicts that climate change could cause global GDP losses reaching 30% by 2100 under current policies, with tail risks of up to 50%. The post UK economy faces losses of 10% of GDP by 2100 if warming reaches 4°C, study finds appeared first on Green Central Banking .