U.S. and North America Most Resilient to Climate Change
A new study by the Economist magazine’s Intelligence Unit (EIU) finds not surprisingly that rich countries such as those in Europe and North America are more resilient to climate change, with less impact on their economies than other regions. The EIU used an index and found that the global economy will be 3% smaller in 2050 when analyzed against a new framework they developed, while the U.S. will be 1.1% smaller, according to CNN Business.
Why This Matters: The extent of preparation for climate change impacts is an important economic health indicator for banks, governments, companies, and other institutions as they make investments in those regions — not to mention the citizens of those regions when they consider the effectiveness of their governing institutions. The index looks at natural catastrophes, such as wildfires and droughts, and rightly assumes that these will be a “drag” on the economies of nations experiencing worsening climate conditions. The report’s authors also sound an alarm — as if we needed more of them — that there will be economic losses in every year of the coming three decades and thus the economic impacts of climate change will only grow over time, and that a 3% loss of real GDP in 2050 is “highly significant for the global economy.”
Climate Economic Losers and Big Losers
Being rich is important for resilience, but the EIU also concluded that the quality of institutions — governments and businesses — matter too. Which is likely why the developing world is so far behind the rest. It also appears that regions where the impacts are being felt more acutely now — like the Middle East — are also likely to feel the economic effects more acutely as well.
- According to the framework, North America’s economy would shrink the least (1.1% smaller) as well as Western Europe (1.7%).
- The EIU found that Africa is the least resilient region to the impact of climate change (4.7% smaller), followed by Latin America (3.8%), the Middle East (3.7%), Eastern Europe (3%) and the Asia-Pacific (2.6%).
The bottom line, according to the authors, is that everyone needs to do more. “Countries, both developed and developing, will need to make a greater effort on the domestic front to meet their goals on adaptation and mitigation for the economic impacts to be reduced,” EIU Country Analysis Director John Ferguson told CNN Business.