(MENAFN- Asia Times) Scientists say severe climate change is now the greatest threat to humanity . Extreme weather is expected to upend lives and livelihoods, intensifying wildfires and pushing ecosystems towards collapse as ocean heatwaves savage coral reefs. The threats are far-reaching and widespread .
So what effect would you expect this to have on the economy in the coming decades? It may surprise you, but most economic models predict climate change will just be a blip, with a minor impact on gross domestic product (GDP).
Heating the planet beyond 3°C is extraordinarily dangerous . The last time Earth was that warm was three million years ago , when there was almost no ice and seas were 20 meters higher. But economic models predict even this level of heat to have very mild impacts on global GDP per capita by century's end. Most predict a hit of around 1% to 7% , while the most pessimistic modeling suggests GDP shrinking by 23% .
In these models, some countries are completely unaffected by climate change. Others even benefit. For most countries, the damage is small enough to be offset by technological growth. Australia's recent Intergenerational Report suggests something similar.
This, it is becoming abundantly clear, is a failure of the modeling. To make these models, economists reach into the past to model damage from weather. But severe climate change would be a global shock that is wholly outside our experience.
Inevitably, models can't come close to capturing the upheavals climate change could cause in markets fundamental to human life, such as agriculture.
Economic models aren't capturing the reality
When the Intergenerational Report came out in August, it pictured what Australia would look like in 2063.
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