Some will benefit from warming at first, but it鈥檚 not a rosy forecast overall (Image: Shaun Best/Reuters)
Climate change could initially benefit rich countries while damaging the economies of poor nations.
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That鈥檚 the conclusion of a new way of modelling its impact, which challenges earlier forecasts.
Previous methods of estimating the economic effects of climate change usually looked at how individual sectors like agriculture or tourism would be affected, then added them all up to give the net effect on each country鈥檚 economy.
Such 鈥渂ottom up鈥� approaches found that climate change would immediately , although the impact on rich countries was less marked.
Economist from the University of Arizona in Tucson and climate scientist from the US National Oceanic and Atmospheric Administration took a different approach.
They analysed past correlations between countries鈥� economic output and changes in temperature and rainfall, and then used the latest climate models to extrapolate those effects into the future, creating a kind of 鈥渢op down鈥� picture.
Zero-sum game
They found that with 1聽掳C of warming, the effect on economic growth in the following decade is roughly zero globally. That鈥檚 because lower growth in poor nations is balanced by higher growth in rich nations.
Beyond that amount of warming, they estimate that economic growth will increase by 1-3 per cent in Europe, North America and Australia, compared with what will happen in a no-warming scenario. But most of Africa, India and parts of South Asia will see a drop in growth by as much as 2 per cent.
Lemoine says the old approach can miss small sectors and assumes there are no interactions between sectors.
The top-down method captures all of that, although it doesn鈥檛 provide an insight into exactly how climate affects economic performance, because it doesn鈥檛 break things down by sector.
Lemoine also notes that the model assumes that warming has a linear impact, which is only going to be true for a limited 鈥� and unknown 鈥� amount of time.
So, he says, rich countries should not treat the model鈥檚 findings as giving them licence to be complacent over greenhouse emissions.
from the London School of Economics reckons this new approach suffers from the same problems that earlier attempts do: assuming that future warming will affect economies in the same ways as past warming, which ignores the possibility of catastrophic impacts.
鈥淧olicy-makers should not use this paper as a guide to the economic risks associated with future climate change,鈥� he says.
But Lemoine says the results should help focus our attention on the most relevant costs of near-term warming. These will be borne by poor countries and the environment rather than the rich nations, he says.
And he says that as we get better at defining and modelling economic costs and the likely catastrophic impacts of climate change, they can be added to the tool. 鈥淭hat鈥檚 exactly our goal,鈥� he says.
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