ZURICH/NAIROBI: Reinsurer Swiss Re has warned the global economy will lose 18 percent of its value by 2050 if governments don’t keep to the Paris Agreement and temperatures rise to 3.0 degrees Celsius.
As the G7 leaders meet in Cornwall, UK on June 11, Oxfam analysis of the Swiss Re data suggests their economies could see an average annual loss of 8.5 percent by 2050 ―equivalent to US$4.8 trillion. By comparison, COVID-19 has had a 4.2 percent negative economic impact on the group.
The Swiss Re Institute recently conducted a stress test to examine how 48 economies would be impacted by climate change and concluded major economies could lose roughly 10 percent of GDP in 30 years at +3.2 percent Celsius.
In this forecast, China would lose 24 percent of its GDP; the US, Canada and the UK around 10 percent and Europe 11 percent.
India, which was invited to the G7 summit, is projected to lose 27 percent while additional invitees Australia, South Africa and South Korea will see their economies drop 12.5, 17.8 and 9.7 percent respectively; plus Colombia 16.7 percent and The Philippines 35 percent.
Between 1990 and 2019, cumulative CO2 emissions for all countries rose from 803.84 billion to 1,650 billion tonnes. For G7 nations the figure was 461.2 billion and 740.39 billion tonnes - some 32.88 percent of global emissions in the 29-year period.
“Climate change is a systemic risk and can only be addressed globally. So far, too little is being done,” commented Swiss Re chief economist Jérôme Haegeli.
“Our analysis shows the benefit of investing in a net-zero economy. For example, adding just 10 percent to the US$ 6.3 trillion of annual global infrastructure investments would limit the average temperature increase to below 2°C. This is just a fraction of the loss in global GDP that we face if we don’t take appropriate action.“
Swiss Re and Oxfam are calling on both the public and private sector to cooperate in order to facilitate financial flows to vulnerable economies. “We have an opportunity to correct the course now and construct a world that will be greener, more sustainable and more resilient,” Haegeli noted.
Story Type: News