Climate change and air pollution will have a significant impact on global economies by 2060, costing them billions of dollars in GDP, economic experts have warned.
An environment working paper by the Organisation for Economic Co-operation and Development (OECD) found that climate change’s damages by 2060 will amount to almost 3% of global GDP.
The economic repercussions of outdoor air pollution like PM2.5 and ozone, meanwhile, will amount to around 1% of GDP, it said.
The authors warned that while air pollution will have more immediate consequences, in the long term the economic repercussions of climate change will be ‘significantly larger’.
‘For both environmental issues, the majority of damages affect relatively fragile economies in Asia and Africa, with damages in many regions exceeding 3% of GDP and in some 5%,’ the paper says.
‘The largest percentage losses are observed in agriculture, where both climate change and air pollution have significant adverse effects.’
The report marks the first time that the OECD has predicted the joint economic consequences of climate change and air pollution, if countries do not act to limit their effects.
The OECD’s modelling projections found that over the next few decades, air pollution’s effects will dominate and damages will be relatively small.
However, over time, the ‘feedback’ effects of both climate change and air pollution will grow, incurring an increasing cost, the authors said.
Global wheat production will be particularly affected, although how this will affect individual crops will depend on regional temperature changes.
The resulting economic damage will have a ‘relatively small’ impact on reducing emissions, and most regions will be able to limit costs as they change their trade patterns, the OECD found.
However, some regions – like India – will see larger reductions in emissions, as the combined effects of climate change and air pollution will have a harder hit on productivity and therefore economic activity.
The researchers also found that air pollution will have a ‘relatively small’ net effect on global average temperatures, as the heating effects of pollutants like black carbon will be counteracted by ‘cooling’ pollutants like aerosols.
The OECD stressed that the report only gives a ‘partial account’ of climate change and air pollution’s economic consequences, as the report does not cover how economies will be affected by premature deaths or extreme climate events.
The report’s findings may help focus future research on how integrated policy action could help protect the world’s economies, its authors added.
Last month, the United Nations Environment Programme (UN Environment) and the Climate and Clean Air Coalition have launched a new ‘Clean Air Initiative’, which calls on governments around the world to ‘align climate change and air pollution policies’ by 2030.
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