Climate may cut GDPs by 20%

2009-09-14 11:24

London - Climate change could cut gross domestic product in countries at a high risk from weather catastrophes by up to a fifth by 2030 unless urgent steps are taken, a report said on Monday.

The study by the UN-backed Economics of Climate Adaption Working Group aims to provide a way to evaluate the cost of climate change and suggest ways to keep the bill down.

"Easily identifiable and cost-effective measures - such as improved drainage, sea barriers and improved building regulations, among many others - could reduce potential economic losses from climate change for all regions," a statement accompanying the 147-page report said.

Entitled "Shaping climate-resilient development", the report comes three months before a summit in Copenhagen where governments hope to reach a global deal to fight climate change.

The study looked at eight areas, both rich and poor, around the world seen as high risk from more droughts, hurricanes, floods and rising sea levels that climate change may cause.

In the worst-case scenario, global warming could trigger severe flooding in Guyana, costing the South American country over 19% of its annual GDP by 2030, the report said.

The hurricane-prone US state of Florida could see weather-related costs knock 10% off its GDP each year.

The group that produced the report is made up of the United Nations, insurer Swiss Re, management consultancy McKinsey, the European Commission, the Rockefeller Foundation, Standard Chartered Bank and environmental network ClimateWorks.

'Too little done'

In a foreword to the report, Nicholas Stern, a British economist and former government advisor on the impact of climate change, said that too little was being done to stop it and to limit the carbon dioxide emissions that are a main cause of it.

"Countries will need to plan for adaptation with much greater rigour, focus and urgency than has been the case until now," he wrote.

"We owe it to the most vulnerable people on the planet to combine the best-possible support to strengthen adaptive capacity."

One of the biggest arguments in the run-up to Copenhagen is just how much cash developed nations should give poorer nations to combat the problem.

The report said warming may increase hurricane damage in Florida, costing the state an extra $33bn a year by 2030.

In the central Indian state of Maharashtra, extreme droughts that historically occurred every 25 years could emerge every eight years and cost the economy billions of dollars.

David Bresch, one of the report's authors and head of sustainability and emerging risk management at Swiss Re, said the report aimed to lay out guidelines for decision makers to assess potential effects.

"This is the first study that really thrashes out the adaptation policies and puts a price on them," he said.

Last month an academic report said adapting to worse floods, droughts and other climate problems would probably cost many times more than the United Nations had so far estimated.

The UN climate change secretariat, UNFCCC, puts costs, including measures such as growing drought-resistant crops and limiting the spread of diseases, at $40bn to $170bn a year until 2030 - the wide range reflecting the uncertainty.

- Reuters