Human and economic impact on low-income nations will be much worse
The economies of all of the nations invited to this year's G7 summit could see an average loss of 11.5% annually by 2050 ― equivalent to US$9.4 trillion ― if leaders do not take more ambitious action to tackle climate change, according to Oxfam's analysis of research by the Swiss Re Institute.
Ahead of this week's G7 meetings in the UK, Oxfam is calling on G7 leaders and invited guest countries including Australia – which is projected to lose as much as 12.5% per year by 2050 - to cut carbon emissions more quickly and steeply.
Oxfam found the loss in GDP for the G7 nations (not including guest nations like Australia) is double that of the coronavirus pandemic, which caused the economies of the same seven nations to shrink by an average of 4.2%, resulting in staggering job losses and some of the largest economic stimulus packages ever seen. But while economies are expected to bounce back from the short-term effects of the pandemic, the effects of climate change will be seen every year.
Reinsurance company Swiss Re modelled how climate change is likely to affect economies through gradual, chronic climate risks such as heat stress, impacts on health, sea level rise and agricultural productivity. All of the 48 nations in the study are expected to see an economic contraction, with many countries predicted to be hit far worse than the G7. For example, by 2050:
- India, which was invited to the G7 summit, is projected to lose 27% from its economy;
- South Africa and South Korea, also invited, are projected to lose 17.8 and 9.7% respectively; and
- The Philippines is projected to lose 35% from its economy.
Oxfam warned that for low-income countries, the consequences of climate change could be much greater. A recent study by the World Bank suggested between 32 million and 132 million additional people will be pushed into extreme poverty by 2030 as a result of climate change.
Lyn Morgain, Oxfam Australia Chief Executive, said: "The economic case for climate action is clear ― now we need G7 and other wealthy countries like Australia to take dramatic action by 2030 to cut emissions and increase climate finance.
"The economic turmoil projected in wealthy countries is only the tip of the iceberg: many poorer parts of the world will see increasing deaths, hunger and poverty as a result of extreme weather," Ms Morgain said.
"This year could be a turning point if governments grasp the challenge to create a safer and more liveable planet for all."
While all G7 governments have unveiled new climate targets ahead of the UN COP26 climate summit hosted by the UK in November, Australia is yet to update or increase the ambition of its climate targets.
"We urge the Australian Government to step up its commitments ahead of the United Nations Climate Change Conference (COP26) later in the year to limit global warming below 1.5°C," Ms Morgain said.
"The G7 and other wealthy countries are some of the world's largest historical emitters―with G7 nations responsible for a third of all CO2 emissions since 1990. They should be leading by example in this crucial year."
Developed countries are also collectively failing to deliver on a longstanding pledge to provide $100 billion per year to help poor countries respond to climate change.
"We call on the Australian Government to make bolder, targeted investments in climate finance, including through renewing its commitment to the Green Climate Fund," Ms Morgain added.
