Events like these show how climate change, which will result in more severe storms, will have a huge and varied global economic impact, and that the impacts will hit locally and ripple out by affecting supply chains, consumer behaviors, regional economies, and downstream jobs.
Yet the scientists who met in Japan recently to finalize the much-anticipated Intergovernmental Panel on Climate Change (IPCC) report on climate impacts and vulnerabilities called such economic estimates as “difficult” to make. The closest they came to an overall number was to say that aggregate losses across the world economy have a more than 50 percent chance of being greater than 2 percent of global GDP. They also noted that for most economic sectors, the impacts of climate change would be smaller than the impacts of population and technology change.
For most people, what matters are not the global economic impacts, but the effects on the places they live and work. The IPCC report spends a lot of time on how climate will affect agriculture and natural resources. Although, worldwide, as much as one-third of all those employed work in agriculture, this share is decreasing and the agricultural sector contributes about three percent to the overall value of the global economy. The report says relatively little about the impacts on sectors that now drive economic development and are the major sources of employment: the chemical, textile, electronics, and automobile industries; retail, health services, and real estate.
This is a problem, not only for the relevance of IPCC, but for the research community in general. We look to assessments such as the IPCC's to translate the science for government leaders, and more importantly to increase public awareness of the potential consequences of climate change, not just in the abstract but how it will affect their own jobs and wallets. These reports have far-reaching repercussions. If the panel has little to say or is uncertain about how climate change will impact the important parts of our economies, then everyone is less likely to take the reports seriously.
So why did the panel have so little to say about the economic consequences of climate change?
First, because there is actually very little published, peer-reviewed science on the risks that climate poses to the economy. What data we do have comes from company reports and studies by consultants that do not go through scientific peer review. The last time the panel relied on studies that were less than ironclad, they got burned by the media.
You might remember the field day climate-change deniers had in 2007 when the report cited documents about rapidly melting Himalayan glaciers and forecasts of steep declines in African crop yields though they had not been peer reviewed for scientific accuracy. Some IPCC scientists, including our colleagues Malcolm Hughes and Mike Mann, were sued to obtain access to emails relating to the report. This time around, the scientists were understandably nervous about citing anything not peer-reviewed, especially reports from industry or environmental groups.