Climate change may cost world economy $7.9 trillion by 2050: Report

Climate change could hugely impact economic growth and cost the world economy $7.9 trillion by 2050 due to natural catastrophes triggered by it, accprding to a report. The Economist Intelligence Unit's (EIU) Climate Change Resilience Index measured the preparedness against climate change and included 82 largest economies of the world for the report. The global economy was supposed to hit $258 trillion but the climate change impact will bring it down to $250 trillion.

Richer the economy, better the resilience

The analysis found out that developed economies will be more resilient towards the effects of climate change as they are better prepared for it with sustainable infrastructure and better institutions. While Africa’s already vulnerable economy will be most at-risk due to extreme weather conditions, North America is said to have the most resilient economy against climate change. According to the report, developing countries were found at a disadvantage as compared to the developed ones.

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Inequality gap to exacerbate

Climate change and global warming would shave off three per cent of the global GDP but it will shrink only 1.1 per cent of the United States economy by mid-century. The report said that poor institutions can simultaneously harm economic growth and aggravate the negative impacts of climate change and that’s why countries with better government institutions and effective disaster mitigation policies were found in a better position. The fear of the worse impact on growth trajectory on poorer nations than the richer ones can further increase the inequality gap.

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Worst affected nations

Angola has been predicted to lose the most, almost 6.1 per cent of the GDP. Since the quality of infrastructure and geographical exposure to drought, flood, soil erosion will be the deciding factor, Angola’s land degradation will affect its GDP the most. According to the report, Nigeria, Egypt, Bangladesh and Venezuela were the next most vulnerable economies against climate change. While Asia-pacific falls in the middle, Latin America and the Middle East region will take most of the toll due to climate change.

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(With inputs from Agencies)