Global Warming Will Make Everthing Expensive: How?

According to recent research, minor increases in average temperatures associated with climate change can lead to a big effects to the GDP. In other words, global warming can make countries poorer.

Fortune reported that several studies in the past have connected how climate change can result to civil war, expensive commodities, inadequate water supply and more powerful storms, among other threats. A new study, published in the journal Nature, added that global warming can have negative effects to the economy.

Researchers at Stanford University and the University of California, Berkeley discovered that a temperature of about 13 degrees Celsius or 55 degrees Fahrenheit, will ideally maximize GDP growth per capita. When the temperature goes under or above that ideal number, there will be negative changes to economic growth.

The researchers studied economic information from the World Bank covering 166 countries between 1960 and 2010 to determine how temperature changes related to GDP. The overall peak productivity temperature and relationship were generally consistent over time and regardless of the country. These were also applicable to rich and poor nations.

“People have long been worried that the effects on people in poor countries would be really negative and we confirmed that. One of the main findings is that rich countries are not isolated. Climate change could reshape the global economy. Rich companies are part of the story and could be impacted in important ways.” Said co-author Marshal Burke, an assistant professor in the department of earth system science at Stanford University. The researchers created a relationship between temperature changes and GDP by observing the effects of warm, cool and average years in every country.

Burke added that some of the largest economies in the world have average temperatures of about 13 degrees Celsius, including the United States, Europe, China and Japan. They found that it was the optimal temperature that cause people to be great at production.

The researchers further note that when the average temperature in a country increases, GDP drops. One percentage point in GD growth would fall if the average temperature in the United States would rise to 17 degrees Celsius. Such an increase in temperature can happen by the year 2100.

Burke said that they saw how the global impact on per capita GDP in the world will become 23% poorer, compared to a global situation without climate change. In effect, 77% of countries around the world will be poorer.

Japan Times stated that the results should compel countries to make improvements to prevent global warming and a GDP drop.