23.01.2020 |

Poorer countries will be more vulnerable to climate hazards, study warns

Drought is expected to increase (Photo: CC0)

Climate change will have substantial socioeconomic impacts across the globe and poorer countries and regions will be more at risk, according to a study released by the McKinsey Global Institute. “Food production could be disrupted as drought conditions, extreme temperatures, or floods affect land and crops,” the consulting firm warns. The authors focus on understanding the nature and extent of physical risk from a changing climate over the next one to three decades, using a higher-emission scenario which predicts that global average temperatures will reach just over 2 degrees Celsius above preindustrial levels by 2050. “Climate change is already having substantial physical impacts at a local level,” the report says, and these impacts are likely to grow, intensify, and multiply. Since the 1880s, the average global temperature has risen by about 1.1 degrees Celsius – with significant regional variations. This brings higher probabilities of extreme temperatures and an intensification of hazards. A changing climate in the next decade, and probably beyond, means the number and size of regions affected by substantial physical impacts will continue to grow.

McKinsey says climate change will have direct effects on five socioeconomic systems: livability and workability, food systems, physical assets, infrastructure services, and natural capital. With respect to livability and workability, for example, a warming climate means that hazards like heat stress could affect the ability of people to work outdoors or, in extreme cases, could put human lives at risk. Physical assets like buildings could be damaged or destroyed by extreme precipitation, tidal flooding, forest fires, and other hazards. The authors project that “socioeconomic impacts of climate change will likely be nonlinear as system thresholds are breached and have knock-on effects”. In India, for example, under a business-as-usual scenario, 160 to 200 million people could live in regions with an average 5% annual probability of experiencing a heat wave that exceeds the survivability threshold for a healthy human being. Ocean warming could reduce fish catches, affecting the livelihoods of 650 million to 800 million people worldwide who rely on fishing revenue.

The risk-assessment finds that all 105 countries examined are expected to experience an increase in at least one major type of impact on their stock of human, physical, and natural capital by 2030. “Intensifying climate hazards could put millions of lives at risk, as well as trillions of dollars of economic activity and physical capital, and the world’s stock of natural capital. The intensification of climate hazards across regions will bring areas hitherto unexposed to impacts into new risk territory,” the consultants warn. By 2050, under the high-emission scenario, the number of people living in areas with a non-zero chance of lethal heat waves would rise from zero today to between 700 million and 1.2 billion. In addition, the average share of annual outdoor working hours lost due to extreme heat and humidity in exposed regions globally would increase from 10% today to 15 to 20%. According to the report, “food systems are projected to see an increase in global agricultural yield volatility that skews toward worse outcomes”. McKinsey projects the probability of a 10% drop in wheat, corn, soybean and rice yields in any given year will rise from 6% to 18% in 2050. These trends are not uniform across countries and some countries could see improved agricultural yields. The average breadbasket region of Europe and Russia is expected to experience a 4% increase in average yields by 2050.

Within regions, the poorest countries are the most vulnerable to climate events, says McKinsey. “Poorer regions often have climates that are closer to physical thresholds. They rely more on outdoor work and natural capital and have less financial means to adapt quickly.” When looking at the share of effective annual outdoor working hours lost to extreme heat and humidity, the top quartile of countries (based on GDP per capita) have an average increase in risk by 2050 of approximately 1 to 3 percentage points, whereas the bottom quartile faces an average increase in risk of about 5 to 10 percentage points. In poorer countries, McKinsey estimates that the chance of a greater than 15% yield shock once in the next ten years could rise from 10% today to 18% in 2030, while the chance of a greater than 10% yield shock could rise from 46 to 69%. Thanks to currently high cereal stocks, the world would not run out of food. “However, historical precedent suggests that prices could spike by 100% or more in the short term, in the event of a greater than 15% decline in global supply that reduces stocks,” they write. This would particularly hurt the poorest communities, including the 750 million people living below the international poverty line. (ab)

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