Country by country – this is how climate change affects the economy
Climate change will have major effects on economic growth in the world and the effects will hit unevenly. While the richer countries are getting richer, the poor will be getting poorer. This is shown by a group of American researchers who studied the effect of climate change on the economy.
There are many reasons why extreme heat is bad for the economy, some of the most important of which can be traced to human behavior. When it’s too hot, people become less productive and in extreme heat it can be impossible to work at all. The journal MIT Technology Review has drawn attention to a group of researchers at Stanford and Berkley universities who looked at historical data to gain knowledge about how temperature affects various aspects of the economy. The researchers conclude that average global income by the end of the century will be 23 percent lower than it would have been without climate change. But the negative effects of a warming world will be unevenly distributed. While a number of northern countries such as Russia and large parts of Europe and Canada can benefit from increased temperatures, the effects will be fatal for large parts of Africa, Latin America and Asia.
According to Solmon Hsiang, a professor at Berkley and one of those who investigates the effects of climate change on the world economy, we will see a massive restructuring of the world economy, the already rich countries will become richer, while the poor countries will become poorer. As early as 2050, the effects will be clear. Large parts of the southern hemisphere will have a climate that is too warm for favorable economic growth. By the end of the century, the average income among the world’s poorest 60 percent will be 70 percent lower than it would have been without climate change.
Climate change will have many other consequences, such as extreme weather events of various kinds, and they will also negatively affect the economy, but by studying the temperature alone, Solomon Hsiang and his colleagues can still form a picture of what the economic development will look like in a few decades. Unlike extreme weather whose effect is more difficult to predict, rising temperatures have a relatively constant effect on various factors that drive the economy. When the temperatures increase to between 20 and 30 degrees, the harvests as well as the availability of labor and the productivity of the workers drop dramatically. Even in the richest and most technologically advanced countries, the negative effects will be felt, says Hsiang, who refers to studies that have shown that a daily temperature of over 30 degrees, in an average county in the United States, costs $20 per citizen in lost income.
That temperature affects productivity is not an unknown phenomenon. As early as the beginning of the 20th century, studies were done to understand what was the optimal temperature for factory workers and soldiers. But the availability of historical data, combined with more advanced techniques for data analysis, makes it possible to compare the economic development of different countries with the average temperature from 1960 to 2010. In this way, it is possible to see how climate change will affect economic growth during the rest of the century if development continues in the same way.
Although the effect of climate change on the world economy is the area of research that receives the most attention, there are also other effects of temperature increases that more people should be interested in, says Solomon Hsiang. He and his colleagues have investigated how human behavior is affected by elevated temperatures and have concluded that it has negative effects for health, as well as for social behavior where it can be stated that high temperatures lead to increased violence and mortality.
Winners and losers among the world’s countries in 2099
Climate change is expected to have a major impact on the global economy, but the effects will be unevenly distributed. While the temperature increases will benefit the economy of some countries, they will have fatal consequences for others. Here are the countries that will be the biggest winners and losers in 2099, if trends continue as they are today.
Winners:
- Mongolia GDP + 1413 percent
- Finland GDP + 516 percent
- Iceland GDP + 513 percent
- Russia GDP + 419 percent
- Estonia GDP + 259 percent
Losers:
- Saudi Arabia GDP -96
- Oman GDP -94
- Iraq, Pakistan GDP -93
- Nicaragua, Suriname, Guinea, India GDP -92
- Venezuela, Guyana, Nigeria, Benin, Ivory Coast, Sierra Leone GDP -91
