How Rising Temperatures Threaten the Global Economy

• Researchers at the University of New South Wales said that the world is underestimating the economic fallout of climate change. It can be far more catastrophic.
• The ripple effects of extreme weather are concerning. A global temperature increase of 3 degrees may slash global GDP by 40% by the end of the century. This outcome is nearly 4 times the estimated 11%.

Global impacts
The study conducted by University of New South Wales asses the impact of climate change in economic growth. It demonstrates that climate change does not impact only within the boundaries of countries. Heatwaves, droughts, and floods can disrupt the global supply chain. Further it can lead to inflation, decline productivity, force mass migration, and ultimately increase conflict risk.
“A warm year across the planet causes lower global growth,” the study notes. “And when many countries experience climate shocks simultaneously, the ability to trade and share resources breaks down.”
Older studies have suggested that climate change and an increase in global temperature may be beneficial for colder countries. According to those studies it can bring significant positive change in thier regions. Yet, it is not true. The revised model says if the disaster comes, it won’t spare anyone from economic disruption.

Climate action and economic disaster
The earlier studies have shown that if temperatures increase by 3 degrees, there will be an economic disruption of 11%. This claim is underestimated and not true. These estimations were based on past shocks. They do not seem reliable as most of them were confined to a local or regional scale.
Moreover, the earlier studies have emphasized that a global increase of 2.7 degrees is still economically manageable, which is again conflicting with the new studies. New studies say that the true tipping point of temperature is 1.7 degrees where economic damage outweighs the cost of action. This suggests that the current national policies with a high temperature threshold can be disastrous. This is plausible happen in the long run.

Need for a shift
Dr. Neal, who researched this problem, says that it is necessary to rethink our policies and work to evaluate financial risks. If it still remains unaltered, it can be a huge calamity for the planet.