When thousands of scientists, economists and policymakers meet in Paris this December to negotiate an global climate treaty, one question will dominate conversations: What is the climate worth?
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UC Berkeley’s Solomon Hsiang, Chancellor’s Associate Professor of Public Policy, was a co-leader of the study with Marshall Burke, a 2014 Ph.D. graduate from Berkeley and an assistant professor in earth system science at Stanford University.
They found that most countries have an economic sweet spot of 55°F – if a country tended to be cooler than 55°F, its economic performance tended to increase as it warmed towards 55°F.
The anticipated spike in temperatures will not affect the world evenly, according to the study. This temperature is just the right temperature and anything above or below this, will hinder economic growth. “After that point, growth declines rapidly”.
Where is the average temperature now 55 degrees? Rich countries may experience a brief economic unrest, but growth will drop off bluntly after temperatures pass a critical on heat verge. Now a team of researchers through a study found that climate change can also have a major impact on the GDP. The new study establishes this relationship across a global level.
The researchers suspected the problem was with the analysis, not the data, so they took a new approach.
The researchers conducted the study by comparing economic data from the World Bank with climatological data and then analyzing it using econometric processes.
Another impact of rising temperatures is on health, with heart and pulmonary diseases rising as well as malaria and dengue fever. “Our macro-level results lined up nicely with the micro-level studies”, Hsiang said. One of the main findings is that rich countries are not isolated. Climate change could also reinforce global inequality – as colder countries located in the north are already economically better off than countries in the tropics. If climate change continues, that might be the case more often. Russia, for example, stands to see a 419 percent increase in GDP per capita by 2100 due to climate change. The effect of agricultural productive is easy to explain: crops grow most productively within a certain temperature range.
The researchers’ findings were stark. Overall, 77 percent of the countries on the planet would see per capita income fall. The bottom line is that they expect average global incomes to be 23% lower by the year 2100, relative to a world without climate change. Other estimates are twice as high.
The study’s authors suggest that the relationship between climate change and economic output can be understood by looking at land and worker productivity, which are both reliably related to temperature changes.
Burke goes on to say, “Under this hypothesis, the impacts of future warming should lessen over time as more countries become richer”, concluding somewhat bluntly: “This is like taking from the poor and giving to the rich”.
Even if the US doesn’t get as hot as other countries, Hsiang said, its economy can be affected because of global demand for its goods and services.
Global funding as a means to implement differentiated responsibility has a long history, beginning with the United Nations Environment Programme Environmental Fund and the World Heritage Fund. The developed countries should not only commit themselves to raise $100 billion per year by 2020, but increase it to at least three times, to get a visible impact. “The historical evidence, though, suggests that this is not something we should count on”.
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But because the U.S.is now at that ultimate peak, there’s greater uncertainty in the study’s calculations than in places such as India, Pakistan, Vietnam, Nigeria and Venezuela, where it’s already hot and there’s more certainty about dramatic economic harm, Hsiang said.
