Climate change describes a change in the average conditions (temperature, rainfall…) in a location over a (long) period. According to NASA, Earth’s surface is warming so fast that in the past 20 years, we were able to record the warmest years ever.
According to the Swiss Re Institute, a rise in global temperatures by 3.2°C, in the most severe scenario, could wipe off 18% of the GDP of the worldwide Economy by the mid-21st century. During a global warming test experiment, 48 countries were impacted and, as a result, impacted 90% of the Economy. It’s not good news for the future as climate change and poverty reinforce one another.
Heatwaves leave us less productive unable to work properly, and research shows that high temperatures reduce workers’ productivity. When daily maximum temperatures get over 32°C, ‘outdoors’ industries, like agriculture and construction, workers go home early. Other research also suggests that higher temperatures could affect people’s behaviour and decisions in other ways, reducing their tolerance of risk and increasing their impatience. Breathable air, tiredness, and humidity… are factors that influence health, savings, labour productivity, and the global Economy in general.
Paris agreement is a legally binding international treaty on climate change, adopted by 196 Parties at COP 21 in Paris during 2015 and entered into force on 4 November 2016. Suppose the Paris agreement is met and the temperature rising is reduced “Well below 2 degrees”. In that case, a loss of 4% in global GDP will happen. Keeping the temperature below 2 is the ideal scenario. In the worst case, it increases by 3.2 degrees, and a total loss of 18.1% GDP. Asian economies would be the most gravely impacted, 5.5% hit to GDP in the best-case scenario and 26.5% hit in a severe scenario. The US, Canada, Switzerland, and Germany were deemed least likely to be significantly impacted by climate change.
Despite the initial reticence of the business community, studies and activities show that dealing with global climate change are a golden opportunity for ensuring sustainable development and economic growth. In a report by the World Commission on the Economy at the end of 2018, implementing climate measures could generate profits, up to $26 billion by 2030, generating 65 million new jobs with low carbon emissions.
Clean energy systems: Decarbonizing the energy system coupled with decentralised and digitised electrification technologies could give another billion people access to modern energy services.
Smarter urban developments: Smaller, connected, and coordinated cities could save $17 billion by 2050 and boost economic growth by improving access to work and housing.
Sustainable land use: Shifting to more sustainable farming methods combined with strict forest protection could generate economic benefits of around $2 billion per year.
Smart water management: In areas with a water shortage, GNP could fall by up to 6% in 2050. To avoid this, we should make better water use through technology improvements.
Circular Industrial Economy: 95% of the value of the material from plastic packaging (up to 120 billion dollars a year) is lost after the first use. Policies that support a more circular and efficient use of materials could enhance global economic activity and reduce waste and pollution.
The United Nations Organisation (UNO) says it is not too late to turn around climate change and minimise its terrible effects. The truth is that humankind has the organisational and technological resources and capacity to counteract and solve all the damage we have done to the planet and repair the harm caused to nature.
Investing in green assets like these brings a wider range of benefits than fossil fuels investment (also called brown investments). Especially for our health and well-being, contributing to climate goals can promote exercise, cut air pollution, and support good mental health.
Climate change needs to be prevented, not for the Economy, but simply for the future of humankind.