- Climate change is detrimental to the prospects for long-term growth in the US economy, according to a new study published by the Federal Reserve Bank of Richmond.
- "The consequences of higher temperatures in the US economy may be more widespread than previously thought," the report said.
- According to the authors' estimates, economic growth in the US can be reduced by one third by the year 2100.
Here is another reason to urgently reduce the contribution of humanity to a superheated planet: this is bad for the economy.
In a country where environmental problems are often are depicted as conflicting with the prospects of business and economic development, new research from the Federal Reserve Bank of Richmond just the opposite.
"Tthe consequences of higher temperatures in the US economy may be more widespread than previously thought, "the report said.
Authors – two employees of Richmond Fed and two academics – an estimate of the rise in temperature can reduce the rate of economic growth in the US by as much as one-third by 2100.
The study used three scenarios for future greenhouse gas emissions identified by the Intergovernmental Panel on Climate Change.
Under the "low emission" scenario, the increase in temperature will lead to a reduction in GDP growth by 0.2-0.4 percentage points per year from 2070 to 2099, which is 10% of the average annual average annual growth rate of 4%.
In accordance with the high-emission scenario, an increase in growth rates could reduce growth by 1.2 percentage points or about one-third of the average annual average GDP growth rate.
Economic forecasting is a dangerous exercise even in the short term – and the authors properly note that their assessments should be "interpreted with caution, as future adaptations to temperature changes can drown out long-term effects."
Nevertheless, they warn that "abouta longer horizon, the impact on GDP growth rates can be significant. "
Considering the industry, the impact on productivity goes far beyond the obvious, such as agriculture. "For example, it was found that temperatures above 90 ° F reduce production at automotive plants in the United States."
Even the insurance is subject to adverse effects, and not only because of higher payments for natural disasters. "High temperatures have a negative impact on health, which leads to increased hospitalization … As health conditions worsen, insurers face increased demands, "the study said.