Unchecked climate change could cost global economy $178T

Unchecked climate change could cost the global economy $178 trillion over the next 50 years, according to a new report released during the World Economic Forum’s annual meeting on Monday.

Unless world leaders unite in a systemic net-zero transition, the global economy will face a 7.6 per cent cut to its gross domestic product (GDP) in the year 2070 alone, said the Deloitte Center for Sustainable Progress report.

“By contrast, the global economy could gain $43 trillion over the next five decades by rapidly accelerating the transition to net-zero,” said the “Global turning point report.”

“If global warming reaches around 3°C toward the century’s end, the toll on human lives could be significant—disproportionately impacting the most vulnerable and leading to loss of productivity and employment, food and water scarcity, worsening health and well-being, and ushering in an overall lower standard of living globally,” said the report.

The report analysed 15 geographies in the Asia Pacific, Europe, and the Americas, and found that if global leaders unite in a systemic net-zero transition, the global economy could see new five-decade gains of $43 trillion — a boost to global GDP of 3.8 per cent in 2070.

“The numbers speak for themselves and businesses should be reimagining their practices to help build a more sustainable future for all. Taking small steps in the right direction will pay dividends in the future. It has become clear that if businesses do not prioritize sustainability and understand the impact they are having on the environment, valuable talent, revenue, and market share may be lost,” said Mutasem Dajani, CEO, Deloitte Middle East.

He said transforming the economy for a low-carbon future will require extensive coordination and global collaboration throughout industries and geographies. “Governments will need to collaborate closely with the financial services and technology sectors—leading the charge on sustainable progress through global policymaking, greater investment in clean energy systems, and a new mix of green technologies across industries.”

“It’s important that the global economy evolves to meet the challenges of climate change,” said Dr. Pradeep Philip, Deloitte Economics Institute. “Our analysis shows that a low-carbon future is not only a societal imperative but an economic one. We already have the technologies, business models, and policy approaches to simultaneously combat the climate crisis and unlock significant economic growth, but we need governments, businesses, and communities globally to align on a pathway toward a net-zero future.”

“In order to find new and lasting solutions to these societal challenges, we must model new forms of cooperation and pursue a multi-party, holistic approach. The Turning Point analysis lays a powerful foundation of economic benefit and growth for decision-makers, influencers, and participants to work from for individual and shared prosperity,” said Prof. Dr. Bernhard Lorentz, founding chair of the DCSP and Deloitte Global Consulting Sustainability & Climate Strategy leader.

— issacjohn@khaleejtimes.com