Climate change & economics: Maybe if we get into the economic damage done by global warming, action will happen faster

Global warming is here. We are already in the consequences.

UN Secretary General Antonio Guterres urged world leaders at the COP 28 summit in Dubai to prepare for a future without fossil fuels, saying there was no other way to control global warming. Recently, even Britain’s King Charles called the world’s progress on climate change “dreadfully far off track”. He also said that the global economy would be in peril unless the environment was rapidly repaired. 

In August, Reuters reported scientists saying that sea ice in the Antarctic region fell to a record low in 2023 with no quick fix to reverse the damage done.

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It was way back in March that the UN released a climate report that wasn’t full of hope for the future. It’s to-do list, which we must fulfil fast, includes deploying wind and solar power, cutting methane emissions from fossil-fuel production and waste, securing natural ecosystems that trap carbon, and using energy efficiently in vehicles, homes, and industry.

Why the hurry?

We are running out of time.

On the other hand, Prime Minister Rishi Sunak announced plans to put up US$2 billion in funding to bring up UK’s green credit score after weakening Britain’s measures to touch net zero targets.

Global energy demand rose 1% last year and record renewables growth did nothing to shift the dominance of fossil fuels, which still accounted for 82% of supply, the industry’s Statistical Review of World Energy report said.

Maybe if we get into the economic damage done by global warming, action will happen faster

Every student going to school learns about saving the environment. This awareness is doing its bit, but those in positions of power seem to need more. Maybe if we get into the economic damage done by global warming, action will happen faster.

For instance, according to a study, extreme weather brought on by climate change is likely to cost Germany about 900 billion euros in collective economic damage by mid-century.

Meanwhile, a team of researchers from 23 institutions, which includes the University of Tokyo, National Institute for Environmental Studies, and Kyoto University, conducted a cost-benefit analysis on climate change, fitting in non-market aspects such as the loss of biodiversity and its implications on human health, which were previously overlooked. They conclude that the economic feasibility of climate change goals rides on the prioritization of these non-market factors. The team calculated the cost of climate change for changing priority systems, predicting the total cost including mitigation between 2010 and 2099 to be US$46-230 trillion.

The results reveal that the financial benefits of lowering climate change are a lot similar to the cost of mitigation efforts. The research team puts the cost of additional mitigation efforts to be in the realm of US$45-130 trillion, while the financial benefits of these reduction efforts range from US$23-145 trillion.

They say that for the 2°C temperature goal to be economically feasible we must emphasize more on the future impact of biodiversity and health factors, since these will only become more pressing in the future.

Businesses are asking for support to foresee the risks and trends occurring on account of climate change.

The security and health risk services company, International SOS, released its annual interactive Risk Map 2024. It is seeing a rising trend in the number of climate-related alerts being issued to clients as rising global temperatures are increasing health risks around the world. Greater support has been requested by businesses on this issue. There were 80% more medical alerts issued by International SOS relating to climate change factors in 2023 compared to 2022. This statistic highlights just how significant the issue is to businesses and their leaders.

While organisations have been trying to reduce the impact of their actions on the environment, it has now become crucial for them to protect their people from the health and wellbeing consequences of climate change

Dr Vikram Vora, Medical Director for the Indian subcontinent at International SOS

Dr Vikram Vora, Medical Director for the Indian subcontinent at International SOS comments, “Heat waves have been worsening with each passing year and this year raised an alarm that we may approach the human limits of survivability by mid-century. While the physical impact of extreme heat on outdoor workers and vulnerable populations is obvious, the not-so-visible damage to mental health is expected to affect people across all age groups. While organisations have been trying to reduce the impact of their actions on the environment, it has now become crucial for them to protect their people from the health and wellbeing consequences of climate change.”

Changes to medical risk continue to vary across countries and regions. Two notable improvements in medical risk this year are Bolivia and Côte d’Ivoire, largely based on the gradual improvement in access to quality medical care, particularly in the major cities.

The year 2024 is likely to be marked by increased global geopolitical tensions, continued instability and persistent conflict in areas impacted in the past year

Udit Mehta, Executive Vice President & Director of Operations for International SOS

Udit Mehta, Executive Vice President & Director of Operations for International SOS comments, “The year 2024 is likely to be marked by increased global geopolitical tensions, continued instability and persistent conflict in areas impacted in the past year. As such the need for organizations to ably map the risk would be critical for the sustenance of operations and shall need to be substantiated by consistent expert-led coverage for both situational information & analysis and on-ground support pivoted on the principles of pre-emption and prevention.”

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Due to new and evolving conflicts, some of the most notable risk rating increases this year have been in parts of Lebanon, Palestinian Territories, Russia and across the Sahel. Ecuador and parts of Colombia have also increased following a consistent rise in criminality and unrest. In some regions, the risk rating has decreased. Most notably, the risk ratings for El Salvador and parts of Nepal have reduced following sustained downward trends across a number of risk factors. 

The map has been designed to help organisations and their mobile workers better understand their global risks. The Risk Map 2024 provides organisations with underlying medical and security risk ratings reflecting the impact of disruptive events, such as the ongoing conflicts in Ukraine and between Israel and Hamas.