JUNE 10, 2021
By Paul Homewood
As promised, my analysis of Swiss Re’s claims about the cost of climate change:
- New Climate Economics Index stress-tests how climate change will impact 48 countries, representing 90% of world economy, and ranks their overall climate resilience
- Expected global GDP impact by 2050 under different scenarios compared to a world without climate change:
-18% if no mitigating actions are taken (3.2°C increase);
-14% if some mitigating actions are taken (2.6°C increase);
-11% if further mitigating actions are taken (2°C increase);
-4% if Paris Agreement targets are met (below 2°C increase)
- Economies in Asia would be hardest hit, with China at risk of losing nearly 24% of its GDP in a severe scenario, while the world’s biggest economy, the US, stands to lose close to 10%, and Europe almost 11%
Climate change poses the biggest long-term threat to the global economy. If no mitigating action is taken, global temperatures could rise by more than 3°C and the world economy could shrink by 18% in the next 30 years. But the impact can be lessened if decisive action is taken to meet the targets set in the Paris Agreement, Swiss Re Institute’s new Climate Economics Index shows. This will require more than what is pledged today; public and private sectors will play a crucial role in accelerating the transition to net zero.
Swiss Re Institute has conducted a stress test to examine how 48 economies would be impacted by the ongoing effects of climate change under four different temperature increase scenarios. As global warming makes the impact of weather-related natural disasters more severe, it can lead to substantial income and productivity losses over time. For example, rising sea levels result in loss of land that could have otherwise been used productively and heat stress can lead to crop failures. Emerging economies in equatorial regions would be most affected by rising temperatures.
The report offers various scenarios of warming, but even the 1.5C target would, according to Swiss Re, cost 4.2% of GDP:
The impact on poorer countries tends to be higher in percentage terms, but they suggest the cost to the UK would be 2.4%, something £50 billion a year. At 2.6C, this rises to 6.5%. Unsurprisingly the authors conclude that” no action on climate change is not an option” – which was no doubt the purpose of the report in the first place!
But where do their figures come from? For a start, the idea that there could be three degrees of warming by 2050 is utterly absurd.
Secondly it has been generally accepted that a small amount of warming could actually be beneficial.
The costings are inevitably derived from computer modelling (!), which attempts to quantify what the world’s economy would have looked like in a world without climate change. This is frankly silly, as a world without fossil fuels and economic growth generated by them would have been infinitely poorer than now. In any event, these sort of studies that try to guess what the world would be like without warming are worthless, and just a game for fools and charlatans.
It might have helped if they had used real world data to inform their guesses, but they don’t even appear to have done that. They focus on six areas:
It is unquestionable that the warming since the 19thC has been hugely beneficial for agriculture, thanks to longer growing seasons and the ability to cultivate areas previously too cold.
As for lazy assumptions that warmer weather will cut crop yields, it ignores the ability to adapt cultivation practices, such as time of planting, choice of crops and the availability of new, climate resilient strains of seeds.
There is also the implied risk of more extreme weather, such as droughts, heavy rain and storms. But there is no evidence whatsoever that any of this has happened so far.
The study seems to ignore the fact that cold kills many more humans than heat. Meanwhile experts in the field have long ago dismissed the notion that malaria and dengue are related to climate change.
The Lancet have been peddling these falsehoods for a long while.
This is another favourite of The Lancet. But it ignores the fact that working practices have been changing out of all recognition. Increasingly, workers do not have to toil with their bare hands, as their forefathers did. Technology and mechanisation mean they no longer have to work such long hours, and can therefore take time out to rest at the hottest time of day. (Has Swiss Re never heard of siestas?)
This is the only area where economic loss might be likely. But the tiny amounts of sea level rise in the last century mean that any further rise by 2050 will be imperceptible.
Talk about scraping the bottom of the barrel!
For years, “experts” have warned that tourists would stop visiting Spain and other countries, because it would be too hot.
But just suppose it really got too hot there in summer. What would people do? Simply visit at cooler times of the year.
A warmer climate will unquestionably lead to reduced energy demand in the UK and others with a similar climate. But this is not just true of only the temperate latitudes. Countries like India and China, for instance, also need a lot of energy for heating.
There may be increased demand for air conditioning, but the reality is that most people in poorer countries already need but have no access to it.
Coming back to the UK, it is simply absurd to claim that we would be £50 billion better off with the climate of the Little Ice Age, Our agriculture would be severely hit, mortality higher, and energy demand greater.
If the Swiss Re study cannot even get that bit right, why should we trust any of it?