Inaction on climate change already costs the world economy 1.6 per cent of global GDP - approximately $1tr a year - and cost are likely to double to 3.6 per cent of GDP by 2030 if governments and businesses fail to take urgent action, an NGO has warned.
Madrid-based DARA yesterday released a report commissioned by 20 governments that attempts to calculate the economic damage that will be caused through to 2030 by escalating temperatures, rising sea levels and carbon-related pollution.
Entitled A Guide to the Cold Calculus of A Hot Planet, the report concludes decisions taken on cold monetary terms alone would favour strong action on climate change globally and regionally.
It says without action to tackle climate change major economies will be severely hit and in less than 20 years China will suffer losses of over $1.2tr in foregone prosperity, while the US economy will be held back by more than two per cent of GDP and India by over five per cent of its GDP.
Less developed countries are forecast to experience even steeper losses of 11 per cent of GDP on average.
DARA also expects the human cost to worsen from the current level of around five million deaths each year, approximately 4.5 million of which are due to air pollution and the rest of which are attributed to hunger and communicable diseases aggravated by climate change.
These projected economic losses dwarf the modest costs associated with tackling climate change, with the report arguing that investing just 0.5 per cent of global GDP over the next decade in clean technologies would ensure sufficient emissions reductions to prevent the world passing the scientifically-agreed tipping point of a two degree average temperature rise.