The economies of rich countries will contract twice as much as during the Covid-19 crisis if they fail to tackle rising greenhouse gas emissions, research shows.
The G7 countries – the largest industrialized economies in the world – will lose 8.5% of GDP per year, or nearly $ 5 billion wiped out of their economies, within 30 years if temperatures rise by 2.6 Â° C. , as they likely will on the basis of government commitments and policies around the world, according to research from Oxfam and the Swiss Re Institute.
The economies of the G7 countries contracted by around 4.2% on average during the coronavirus pandemic, and economic losses from the climate crisis by 2050 would be about the magnitude of experiencing a crisis similar twice a year, according to research. The British economy would lose 6.5% per year by 2050 on current policies and projections, compared to 2.4% if the objectives of the Paris climate agreement are met.
Other countries will be much more affected, including India, whose economy will contract by a quarter due to a temperature increase of 2.6 Â° C, while Australia will suffer a loss of 12, 5% of its production and South Korea will lose almost a tenth of its economic potential. .
Leaders from the G7 countries – UK, US, Japan, Canada, France, Germany, Italy – and the EU will meet in Cornwall on Friday to discuss the global economy, Covid-19 vaccines, business and climate taxes. crisis.
Modeling by insurance company Swiss Re took into account the predicted direct impacts of climate degradation, including extreme weather conditions such as droughts and floods, as well as the effects on agricultural productivity, health and heat stress.
Jerome Haegeli, Group Chief Economist at Swiss Re, said: âClimate change is the number one long-term risk to the global economy, and staying where we are is not an option – we need more. progress on the part of the G7. This means not only obligations on the reduction of CO2 but helping developing countries too is super important.
He said Covid-19 vaccines were also a key way to help developing countries, as their economies have been hit hard by the pandemic and would need help getting back on a green lane, rather than stimulate fossil fuels.
The insurer found that the policies and commitments made by governments to reduce greenhouse gas emissions were still insufficient to meet the goals of the Paris Agreement. In addition to hosting the G7 summit, the UK will host vital UN climate talks, called Cop26, in November in Glasgow.
Ahead of Cop26, the UK calls on all countries to make tighter carbon commitments in order to meet the Paris targets of limiting global heating to well below 2C, and preferably no more than 1.5C, above pre-industrial levels. The lower limit is increasingly threatened, as greenhouse gas emissions are expected to rise sharply this year, by the second highest jump on record, due to the rebound from the Covid-19 recession and the increasing use of coal.
Danny Sriskandarajah, Managing Director of Oxfam GB, said: âThe climate crisis is already devastating lives in the poorest countries, but the world’s most developed economies are not immune. The UK government has a unique opportunity to lead the world to a safer and more livable planet for all of us.
“It should strain all diplomatic nerves to achieve the strongest possible outcome at the G7 and Cop26, and set an example by turning promises into action and overturning doomed decisions like the project. coal mine in Cumbria and cuts in aid abroad. “
The record of Boris Johnson’s government has been scrutinized closely in the run-up to the G7 and Cop26 meetings. Figures in climate diplomacy have said the prime minister needs to ‘get on top’ of the UN talks to ensure their success, as disputes over a new coal mine project, the decision to cut aid to overseas from 0.7% to 0.5% of GDP, and issues such as new oil and gas licenses for the North Sea, removal of the green house subsidy and incentives for electric vehicles, and airport expansion, have all undermined the government’s green credentials.
Aid abroad has been the main sticking point for many, described as a diplomatic disaster when the success of Cop26 depends in part on the UK persuading other wealthy countries at the summit. G7 to make much higher commitments of financial assistance to the developing world, helping poor countries reduce their emissions and cope with the impacts of climate degradation.
Dozens of Tory rebels plan to try to force the government to back down on aid cuts in a key vote on Monday. The row and rising Covid cases over new variants of the virus threaten to overshadow what Johnson had hoped to be an uplifting meeting celebrating vaccine success and laying the groundwork for a successful Cop26 in Glasgow in November.