Climate crisis to shrink G7 economies twice as much as Covid-19, says research
G7 countries will lose $5tn a year by 2050 if temperatures rise by 2.6C The economies of rich countries will shrink by twice as much as they did in the Covid-19 crisis if they fail to tackle rising greenhouse gas emissions, according to research. The G7 countries the worlds biggest industrialised economies will lose 8.5% of GDP a year, or nearly $5tn wiped off their economies, within 30 years if temperatures rise by 2.6C, as they are likely to on the basis of government pledges and policies around the world, according to research from Oxfam and the Swiss Re Institute . The economies of G7 nations contracted by about 4.2% on average in the coronavirus pandemic, and the economic losses from the climate crisis by 2050 would be roughly on the scale of suffering a similar crisis twice every year, according to the research. The UKs economy would lose 6.5% a year by 2050 on current policies and projections, compared with 2.4% if the goals of the Paris climate agreement are met. Other nations will be hit much worse, including India, whose economy will shrink by a quarter owing to a 2.6C temperature increase, while Australia will suffer a loss of 12.5% of output, and South Korea will lose nearly a tenth of its economic potential. The leaders of the G7 countries the UK, the US, Japan, Canada, France, Germany, Italy and the EU will meet in Cornwall on Friday to discuss the global economy, Covid-19 vaccines, taxes on business, and the climate crisis. The modelling by the insurance firm Swiss Re took account of the forecast direct impacts of climate breakdown, including extreme weather such as droughts and floods, as well as the effects on agricultural productivity, health and heat stress. Jerome Haegeli, group chief economist at Swiss Re, said: Climate change is the long-term number one risk to the global economy, and staying where we are is not an option we need more progress by the G7 . That means not just obligations on cutting CO 2 but helping developing countries too, thats super-important. He said vaccines for Covid-19 were also a key way to help developing countries, as their economies were hit hard by the pandemic and would need help to recover on a green path, rather than through boosting fossil fuels. The insurer found that policies and pledges by governments to reduce greenhouse gas emissions were still inadequate to meet the goals of the Paris agreement. As well as hosting the G7 summit, the UK will host vital UN climate talks, called Cop26 , this November in Glasgow. Pressure on the UK as Cop26 approaches Campaigners and climate experts have been increasingly concerned about a series of government actions that appear to be out of step with the governments commitment to net zero emissions, ahead of hosting vital UN climate talks, called Cop26 , this November in Glasgow. As host and president of the talks, the UK will have to bring squabbling nations together to agree to slash emissions drastically in the next ten years , and reach net zero emissions by mid-century. Rebecca Newsom, head of politics at Greenpeace UK, said the government must reject airport expansion to show leadership at Cop26: If true, pausing the plans is a sign that the government is starting to clock the catastrophic impacts of this proposed expansion. But were just months away from hosting critical global climate talks, and this climate-wrecking mega project is clearly incompatible with our plans to cut emissions, so why only delay the decision and not just call it in now? Quashing the expansion plans before the global climate summit begins would be a real show of climate leadership. Green groups received assurances from civil servants in 2019 that decisions on new infrastructure that could increase greenhouse gas emissions would take account of the governments target of reaching net zero emissions by 2050. However, the supreme court ruled last December that the governments commitments under the 2015 Paris agreement could effectively be ignored in the decision to press ahead with a third runway at Heathrow. A group of more than 130 prominent scientists, academics and lawyers, including former Nasa scientist James Hansen, and UK former chief scientist Sir David King, last week wrote to the government expressing concern over the supreme court ruling , and warning that the governments international climate commitments were being ignored. They wrote: The highest court in the UK has set a precedent that major national projects can proceed even where they are inconsistent with maintaining the temperature limit on which our collective survival depends. Indeed, the precedent goes further still. It says that the government is not bound even to consider the goals of an agreement that is near universally agreed. Not only does that undermine the UKs status as a champion of the Paris agreement just ahead of Cop26. It also substantially reduces humanitys prospects of maintaining that limit and hence averting disaster. Other recent controversial decisions, such as the governments initial backing for the Cumbrian coal mine , and a new round of licences granted to extract oil and gas from the North Sea , have also raised concerns. The government has scrapped its main green recovery measure , the green homes grant, which was intended to create thousands of green jobs by helping households to install insulation, and cut incentives to buy electric cars . Ahead of Cop26, the UK is calling on all countries to come forward with tougher pledges on carbon in order to meet the Paris targets of limiting global heating to well below 2C, and preferably no more than 1.5C , above pre-industrial levels. The lower limit is increasingly imperilled , as greenhouse gas emissions are forecast to jump sharply this year , by the second highest leap on record, owing to the rebound from the Covid-19 recession and increasing use of coal . Danny Sriskandarajah, the chief executive of Oxfam GB, said: The climate crisis is already devastating lives in poorer countries, but the worlds most developed economies are not immune. The UK government has a once-in-a-generation opportunity to lead the world towards a safer, more liveable planet for all of us. It should strain every diplomatic sinew to secure the strongest possible outcome at the G7 and Cop26, and lead by example by turning promises into action and reversing self-defeating decisions like the proposed coalmine in Cumbria and cuts to overseas aid. The record of Boris Johnsons government has come under close scrutiny in the run-up to the G7 and Cop26 meetings. Leading figures in climate diplomacy have said the prime minister must get a grip of the UN talks in order to ensure their success, as rows over a proposed new coalmine, the decision to slash overseas aid from 0.7% to 0.5% of GDP, and issues such as new oil and gas licences for the North Sea , the scrapping of the green homes grant and of incentives for electric vehicles, and airport expansion , have all undermined the governments green credentials. Overseas aid has been the key sticking point for many, described as a diplomatic disaster when the success of Cop26 hinges in part on the UK persuading other rich nations at the G7 summit to come up with far higher pledges of financial assistance to the developing world, to help poor countries cut their emissions and cope with the impacts of climate breakdown. Dozens of Conservative rebels are planning to try to force the government to back down on the aid cuts in a key vote on Monday. The row, and the rise in Covid cases from new variants of the virus, threaten to overshadow what Johnson had hoped would be an uplifting meeting celebrating the success of vaccines, and laying the groundwork for a successful Cop26 in Glasgow this November.