Undeniable Economic Impacts Of Climate Change

The economic arguments for strong and immediate action on climate change are compelling. Yet politicians have failed to grasp the magnitude of the crisis.

In 2006, Sir Nicholas Stern, a former Chief Economist at the European Bank for Reconstruction and Development, the World Bank and the British Treasury delivered a landmark report on the economic impacts of climate change.

The central tenet of Stern’s review was that unless we invest 1% of global GDP per annum in measures to prevent climate change it would cost us 20% of global GDP.

Stern has since upwardly revised his estimate to 2% of global GDP as a response to the worsening prognosis about climate change from the scientific evidence.

He has publicly castigated politicians for their failure to grasp the magnitude of the crisis.

‘Do the politicians understand just how difficult it could be? Just how devastating a rise of four, five, six degrees centigrade would be? I think not yet.’

In an interview with British newspaper The Guardian he slammed the attempts of some politicians to discredit the science.

‘We’re the first generation that has had the power to destroy the planet. Ignoring that risk can only be described as reckless. There are many half-baked attempts to naysay the science, but they always unravel on inspection,’ said Stern.

Garnaut recommends strong action

Similarly in Australia, the Garnaut Climate Change Review has looked at the impacts of climate change on the Australian economy with similarly strong advocacy for action on climate change.

‘Australia’s interest lies in the world adopting a strong and effective position on climate change mitigation,’ he said.

Garnaut said climate change would be an economic disaster for Australian agriculture.

By 2050, unmitigated climate change would mean major declines in agricultural production across much of the country, including a 50% reduction in irrigated agriculture in the Murray-Darling basin. By 2100, irrigated agriculture in the Murray Darling basin would decline by 92%, he found.

There are other economic risks.

Climate change threatens the Great Barrier Reef, a tourist Mecca that brings billions of dollars to Queensland each year and employs thousands of people.

Climate change is also bringing about rising sea levels. About 85% of Australians live on our coasts. A recent report found as many as 247,000 existing residential buildings valued up to $63 billion are potentially at risk from a 1.1 metre sea level rise.