Climate change could cost world economy $178tn by 2070

Climate change, if left unchecked, could cost the global economy $178tn over the next 50 years according to a report by Deloitte.

Deloitte’s Global Turning Point report produced by the Deloitte Center for Sustainable Progress says by contrast, the global economy could gain $43tn over the next five decades by rapidly accelerating the transition to net-zero.

The report finds that unchecked climate change could cost the global economy $178tn over the next 50 years, unless global leaders unite in a systemic net-zero transition.

The report released in June 2022 is based on research conducted by the Deloitte Economics Institute and analyzed 15 geographies in Asia Pacific, Europe and the Americas. It reveals that if global leaders unite in a systemic net-zero transition, the global economy could see new five-decade gains of $43tn — a boost to global GDP of 3.8% in 2070.

The report says if global warming reaches around 3°C toward the century’s end, the toll on human lives could be significant - disproportionately impacting the most vulnerable and leading to loss of productivity and employment, food and water scarcity, worsening health and well-being, and ushering in an overall lower standard of living globally.

Deloitte Middle East CEO Mutasem Dajani said, “The numbers speak for themselves and businesses should be reimagining their practices to help build a more sustainable future for all. Taking small steps in the right direction will pay dividends in the future. It has become clear that if businesses do not priorities sustainability and understand the impact they are having on the environment, valuable talent, revenue and market share may be lost.”

The report details four major stages for decarbonization globally:

• The public and private sectors unite, collaborating to build effective and foundational frameworks and policies to drive actionable change

• Business and governmental leaders make significant investment, sparking structural changes to the global economy that prioritize low-emissions industries and accelerate the transition to net-zero

• The world’s geographies approach their respective ‘turning points’ - when the benefits of a net-zero transition begin to outweigh the costs - and ultimately drive regional net-positive growth and value

• Following the turning point, society realizes a greener future—where interconnected, low-carbon systems underpin a clean economy that grows at an increasingly faster rate than its carbon-intensive alternative

Deloitte Economics Institute faculty Pradeep Philip said, “We already have the technologies, business models, and policy approaches to simultaneously combat the climate crisis and unlock significant economic growth, but we need governments, businesses, and communities globally to align on a pathway toward a net-zero future.”

Source: asiainsurancereview.com