The recent study, carried out by researchers at Stanford and the University of California, Berkeley, was published in the journal Nature. It applied to both rich and poor countries, and a relationship between the changing global temperatures and GDP was established by comparing data across cooler and warmer than average years.
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Walk on water: PI Hajo Eicken at the Barrow sea ice mass balance site in June 2008, during the melt season.
“These results provide the first evidence that economic activity in all regions is coupled to the global climate, and establish a new empirical foundation for modelling economic loss in response to climate change, with important implications”. According to Stanford University assistant professor in the Department of Earth System Science, Marshall Burke, “We’re basically throwing away money by not addressing the issue”.
The climate change jamboree (around 40,000 participants, representing the countries, observers and civil society members will be attending the meet), the 21st session of the Conference of Parties to the UNFCCC and the 11th session of the Conference of Parties, serving as the meeting of the parties to the Kyoto Protocol will take place from November 30 to December 11, in Paris, France. Canada, Russian Federation and countries in Northern Europe may be favored by warmer temperatures according to the models developed by the scientists since they are yet to reach what the scientists determined as the optimal average temperature in terms of the economy which is 55 degrees Fahrenheit.
In any event, Hsiang includes, the study will animate a verbal confrontation among market analysts about the most ideal approach to filter through the different components that influence a nation’s profitability so as to seclude and survey a worldwide temperature alteration’s monetary impacts.
The impact of heat on manual workers is more obvious but Hsiang says it can affect white collar workers too: “There is a lot of interesting work showing that cognitive errors, or other types of mistakes, increase as workers are subjected to higher temperatures”.
“It’s the optimal temperature where humans are really good at producing stuff.” said Burke to Fortune.
The study stands by the verdict that global economic production will decrease by about 23 percent by the end of the century in 2100 if climate keeps changing at current rates.
As the average temperature in a country rises, their GDP growth inevitably falls. The United Kingdom and Germany are now cooler than 13C, meaning their economies may improve a little as temperatures rise, before starting to decline. Yet the instinct to shirk work in hot weather is more than a summer slowdown. Economic activity at these hottest locations begins to decline before the whole country gets hot and starts its slump. Stavins also adds that while the study only examines market impacts of climate change, “many economic impacts of climate change will be outside of markets, such as many ecological impacts, which are nevertheless economic”. He has been covering climate change since 1988.
In China, the research estimates that households’ average income will shrink 42 percent by the aforementioned year, but it’s still much smaller compared to Australia with negative 53 percent, India’s 92, and Brazil’s red 83 percent mark. “The effect of climate change is to massively increase global income inequality”, said Hsiang.
Few industrial nations would share in the losses, however, the worst hits would come to developing nations in the tropics and subtropics.
“This is like taking from the poor and giving to the rich”, Hsiang said.
Moreover, regions where temperatures equal this 55-degree annual average or slightly surpass it, are also at risk of experiencing lower yields as global warming continues.
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One of the main points of the study is to help countries understand the dire consequences of global warming. In the analysis, 77% of nations were worse off than they would be in 2100 if climate change is not tackled.
