Latest news with #TimothyNeal
Yahoo
16-05-2025
- Business
- Yahoo
Study exposes hidden danger that could wipe out household savings: 'The economic impacts ... could be even worse'
A study by researchers from the University of New South Wales, published in Environmental Research Letters, found that if global temperatures rise by 4 degrees Celsius (7.2 degrees Fahrenheit), the average person's wealth could shrink by 40%. Earlier models had predicted smaller effects, but the Guardian reported that the financial toll on ordinary people could be much worse. Even if warming is limited to 2 degrees Celsius (3.6 degrees Fahrenheit), the study estimates global gross domestic product per person could drop by 16% — a steep jump from a previous 1.4% forecast. Led by Dr. Timothy Neal, the UNSW team updated traditional economic models to factor in threats like extreme weather disasters and supply chain failures. Older forecasts assumed that damage in one region could easily be balanced out by gains elsewhere. But extreme weather doesn't stay local. A flood in one area can lead to food shortages, shut down factories, and disrupt trade across the globe. By weaving these real-world risks into their model, the researchers offer a clearer and more urgent view of how climate change could reshape economies. Understanding these risks changes how people think about the cost of action. For years, many models painted a softer picture of climate damage, making it seem like the price of inaction was manageable. Mark Lawrence, a professor of practice at the University of Adelaide, supported the new findings, saying in the Guardian, "If anything, I believe the economic impacts [of climate change] could be even worse." His warning lines up with concerns from Swiss Re, one of the world's largest reinsurers, which projects that unchecked global heating could slash global GDP by $23 trillion by 2050. Across the world, weather disasters are already hurting crops, pushing food prices higher, and hitting communities hard. Climate-linked trade disruptions are putting strain on economies today, a reminder that faster action can't wait. Families are already feeling the early costs of rising global temperatures. Grocery bills are climbing, energy costs are rising, and insurance premiums are getting steeper. If supply chains continue to break down, the price of everyday goods could keep going up. However, there are ways to slow the damage and protect both the environment and every family's future. Investing in solutions that address various issues linked to a changing climate and supporting the development of better food systems can help create a cleaner and more secure future. Do you think America is in a housing crisis? Definitely Not sure No way Only in some cities Click your choice to see results and speak your mind. Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
The Independent
02-04-2025
- Business
- The Independent
Global economy could shrink 40% if planet warms by 4C, new study says
A 4C rise in global temperatures could wipe out 40 per cent of the world's economic output by the end of the century, according to a new peer-reviewed study that dramatically revises earlier estimates. The global economy is far more exposed to climate breakdown than previously thought, the study from the University of New South Wales concludes, making the case that rapid decarbonisation is not only an environmental imperative but an economic necessity as well. Previous modelling estimated global GDP losses at around 11 per cent under 4C of warming. The new figure – nearly four times higher – stems from correcting what the researchers call a key blind spot that has long shaped international climate policy. Most models used to inform global climate policy look only at the direct impact of local weather patterns on a country's productivity. But they ignore the crucial fact that modern economies are tightly connected through trade, supply chains, financial systems. The Australian researchers say the new study incorporates these global linkages and finds that climate damages in one part of the world can set off chain reactions elsewhere. 'In a hotter future, we can expect cascading supply chain disruptions triggered by extreme weather events worldwide,' lead author of the study, Timothy Neal, senior lecturer at the School of Economics and the Institute for Climate Risk & Response, explained. 'These systems that currently buffer economic shocks will become vulnerabilities.' This oversight in older models, Dr Neal added, led some policymakers to believe that even severe climate change would not dramatically harm the economy – a view that shaped carbon pricing and emissions targets worldwide. But the new study shows that no nation is insulated from loss, even those previously assumed to benefit from warming, like colder or resource-rich places. 'There's an assumption that some colder countries will do better,' he said, 'but supply chain dependencies mean no country is immune.' The new estimate of a 40 per cent drop in global GDP is based on a high emissions scenario in which current pledges fail and fossil fuel use continues to grow. Though a full 4C of warming by 2100 is still avoidable, the world is on track for a 2.5-2.9C rise if existing climate pledges are implemented in full, according to the UN Environment Programme. In the absence of stronger policies, higher-end warming remains a real risk. The study also re-calibrates what economists consider a 'safe' level of warming. While older models supported targets of up to 2.7C, the updated model sees economic damages accelerate sharply beyond a 1.7C rise, making a strong case for deeper emissions cuts in line with the Paris Agreement 's most ambitious goal. The study doesn't yet include future adaptation strategies like climate-resilient infrastructure or managed migration, which remain difficult to model, but that does not weaken the urgency. 'We continue learning from how we see climate change impacting our economy right now, from rising food prices to insurance costs,' Dr Neal said. 'We need to be responsive to new information if we're going to act in our best interest.' The new findings come just days after the World Meteorological Organisation confirmed that 2024 was the hottest year on record, with global temperatures breaching the 1.5C mark for the first time in a full year. The organisation's report warned of irreversible damage to glaciers, oceans and ecosystems and rising economic costs from extreme weather.
Yahoo
01-04-2025
- Business
- Yahoo
Global Economy More Vulnerable to Warming Than Previously Thought
A new study finds warming could inflict far more damage to the global economy than previously assumed. Typically, to understand how future droughts, heat waves, storms, and floods will impact the global economy, experts look at the cost of extreme weather in the past. Using that data, they build models showing that warming will lead to trillions of dollars in losses in the decades to come. But this method is actually too optimistic, Australian scientists say, because it looks only at the local impact of extreme weather. By rattling supply chains, future storms and heat waves will also send ripples throughout the global economy, inflicting costs far higher than models currently show. 'Because these damages haven't been taken into account, prior economic models have inadvertently concluded that even severe climate change wasn't a big problem for the economy,' said lead author Timothy Neal, of the University of New South Wales in Australia. For the new study, scientists revised three popular models to account for the global impact of extreme weather. One model, for instance, had showed that if emissions went unchecked, warming would shrink the global economy by 11 percent by the end of this century. But when the model was updated to account for the impact of warming on supply chains, the losses rose to 40 percent. The findings, published in Environmental Research Letters, underscore that in an interconnected world every country is vulnerable to warming. 'There's an assumption that some colder countries, like Russia or Canada, will benefit from climate change,' Neal said, 'but supply chain dependencies mean no country is immune.' With NOAA Cuts, a Proud Legacy and Vital Science Are at Risk
The Guardian
01-04-2025
- Business
- The Guardian
Average person will be 40% poorer if world warms by 4C, new research shows
Economic models have systematically underestimated how global heating will affect people's wealth, according to a new study that finds 4C warming will make the average person 40% poorer – an almost four-fold increase on some estimates. The study, by Australian scientists, says average global GDP per person will be reduced by 16% even if warming is kept to 2C higher, , much higher than previous estimates of a drop of about 1.4%. Even if governments around the globe hit their near-term and long-term climate targets, scientists now estimate global temperatures will rise by 2.1C. Criticisms have mounted in recent years that a set of economic tools known as integrated assessment models (IAM) – used to guide how much governments should invest in cutting greenhouse gas emissions – have failed to capture major risks from climate change, particularly extreme weather events. The new study, in the journal Environmental Research Letters, took one of the most popular economic models and enhanced it with climate change forecasts to capture the impacts of extreme weather events across global supply chains. Dr Timothy Neal, of the University of New South Wales's Institute for climate risk and response and the lead author of the study, said the new research had looked at the likely impact of global heating of 4C – seen by many climate experts as catastrophic for the planet – finding it would make the average person 40% poorer. This compared with about 11% poorer when using the models without enhancements. Previous economic models that 'inadvertently concluded' even high levels of global heating would have only modest impacts on the global economy had 'profound implications for climate policy', Neal said. He said economic models had tended to only account for changing weather on a local level, rather than how weather extremes like droughts or floods could affect global supply chains. 'In a hotter future, we can expect cascading supply chain disruptions triggered by extreme weather events worldwide,' Neal said. Prof Andy Pitman, a climate scientist at UNSW and co-author of the research, said: 'It's in the extremes when the rubber hits the road. It isn't about average temperatures' 'Retooling economic models to account for extremes in your part of the world and its impact on supply chains feels like a very urgent thing to do so countries can fully cost their economic vulnerabilities to climate change and then do the obvious thing – cut emissions.' Some economists have argued global losses from global heating might be partially balanced by warming that could benefit some cold regions, such as Canada, Russia and northern Europe. But Neal said global heating would hit countries everywhere, because global economies are linked by trade. Prof Frank Jotzo, a climate policy expert at Australian National University who was not involved in the research, said economic climate modelling using IAMs assumed that if climate change made an activity such as agriculture unviable in one part of the world, increased output would simply come from somewhere else. 'The result is that the models say that climate change makes little difference to the future world economy, which is contrary to what physical impact science and a nuanced understanding of interdependencies in the economy would suggest.' A report in January from the Institute and Faculty of Actuaries, representing the profession that underpins the risk management decisions of the world's insurers and pension funds, said previous economic risk assessments had failed to account for real-world climate impacts like 'tipping points, extreme events, migration, sea level rise, human health impacts or geopolitical risk.' 'The benign but flawed results may reinforce the narrative that these are slow-moving risks with limited impacts, rather than severe risks requiring immediate action,' the report said. Mark Lawrence researches climate risk as a professor of practice at the University of Adelaide and previouslyworked in financial risk management with senior roles at major financial institutions including Merrill Lynch and ANZ Banking Group. He said the results of the new research were credible. 'If anything, I believe the economic impacts [of climate change] could be even worse,' he said. A consequence of the disconnect between modelling and real-world climate impacts, Lawrence said, was that 'the potential economic benefits of urgent climate policy action have also been significantly understated'.
