Climate change will cause serious long-term damage to the economies of low-income countries, according to new research published in the IMF’s latest World Economic Outlook (WEO).
The evidence for rapid climate change is compelling and estimates suggest a 1°C increase in temperature in a country with an average annual temperature of 25°C would reduce per capita output by up to 1.5 percent for at least seven years. The increase in temperature would erase close to one-tenth of the per capita output of the median low-income country by the end of the Twenty First Century, according to the WEO.
The research suggests that putting in place domestic policies and making the investments necessary to cope with climate change will be challenging for many low-income countries with huge spending needs and limited resources.
The disastrous effects of climate change will lead to extreme weather events like heat waves, droughts, floods, more frequent natural disasters, and the loss of biodiversity. It will also fuel migration patterns of conflict risk countries.
While higher temperatures hurt economic activity in hot countries by lowering agricultural output, reducing the productivity of workers exposed to heat, slowing investments, and damaging health.
The earth’s warming affects countries unequally and close to 60 percent of the world’s population reside in countries that are vulnerable to the negative economic consequence of global warming. This number is projected to rise to more than three-fourths of the global population by the end of the Twenty-First Century.
A global effort to contain greenhouse emissions, the human driver of global warming, is necessary to keep temperatures from rising further. The authors suggest that advanced and emerging market economies that have contributed widely to the actual warming of the planet help low-income countries cope with the consequences and long-term risks.