Missing Paris Agreement goals could cost trillions of dollars

Failing to meet the goals of the United National Paris Agreement could cost the global economy tens of trillions of dollars over the next century, a new study shows.

The agreement commits 195 countries to the goal of holding this century’s average temperature to 2 degrees Celsius above levels in the pre-industrial era. It also includes an aspirational goal of pursuing an even more stringent target of limiting temperature rise to 1.5 degrees. To date, the economic benefits of achieving these temperature targets have not been well understood.

“Over the past century we have already experienced a 1-degree increase in global temperature, so achieving the ambitious targets laid out in the Paris Agreement will not be easy or cheap,” says lead author Marshall Burke, assistant professor of Earth system science in the School of Earth, Energy & Environmental Sciences at Stanford University. “We need a clear understanding of how much economic benefit we’re going to get from meeting these different targets.”

“It is clear from our analysis that achieving the more ambitious Paris goals is highly likely to benefit most countries—and the global economy overall…”

To develop this understanding, researchers studied how economic performance over the past half-century correlated with changes in temperature around the world. Then, using climate model projections of how temperatures could change in the future, they calculated how overall economic output is likely to change as temperatures warm to different levels.

The researchers found that a large majority of countries—containing close to 90 percent of the world’s population—benefit economically from limiting global warming to 1.5 degrees instead of 2 degrees. This includes the United States, China, and Japan—the three largest economies in the world.

It is also true in some of the world’s poorest regions, where even small reductions in future warming generate a notable increase in per capita gross domestic product.

“The countries likely to benefit the most are already relatively hot today,” Burke says. “The historical record tells us that additional warming will be very harmful to these countries’ economies, and so even small reductions in future warming could have large benefits for most countries.”

The projected costs from higher temperatures come from factors such as increases in spending to deal with extreme events, lower agricultural productivity, and worse health, the scientists say.

Previous research has shown that the actual climate commitments each country has made as part of the Paris Agreement add up to close to 3 degrees of global warming, instead of the 1.5–2 degrees warming goals.

Given this discrepancy, researchers also calculated the economic consequences of countries meeting their individual Paris commitments, but failing to meet the overall global warming goals of 1.5–2 degrees. They found that failing to achieve the 1.5–2 degrees goals is likely to substantially reduce global economic growth.

“It is clear from our analysis that achieving the more ambitious Paris goals is highly likely to benefit most countries—and the global economy overall—by avoiding more severe economic damages,” says coauthor Noah Diffenbaugh, professor of Earth system science at Stanford.

The authors note the study may underestimate the total costs of higher levels of global warming. That’s especially true if catastrophic changes such as rapid melting of the ice on Greenland or Antarctica come to pass, or if extreme weather events such as heatwaves and floods intensify well beyond the range seen in historical observations.

A recent study by Diffenbaugh and his colleagues showed that even with reduced levels of global warming, unprecedented extreme events are likely to become more prevalent.

The new research helps shed light on the overall economic value of the Paris Agreement, as well as on the Trump administration’s decision to withdraw the US from the accord because of concerns that it is too costly to the US economy.

The researchers calculate that the overall global benefits of keeping future temperature increases to 1.5 degrees are likely in the tens of trillions of dollars, with substantial likely benefits in the US as well. They note that these benefits are more than 30 times greater than the most recent estimates of what it will cost to achieve the more ambitious 1.5 degrees goal.

“For most countries in the world, including the US, we find strong evidence that the benefits of achieving the ambitious Paris targets are likely to vastly outweigh the costs,” Burke says.

The Erol Foundation supported the work.

Source: Stanford University

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