Climate Change Redrawing World Economy

Environmental challenges and innovations are dramatically changing the global economy, according to a report released by the environmental research group Worldwatch Institute on Wednesday 9th of January. Much of the 278-page report focuses on the need for further economic change to better reflect the costs of climate change and the benefits of technologies and business practices that combat it.

State of the World 2008 cites two major economic modeling studies that find that the damage from global climate change could equal as much as 8 percent of global economic output by the end of this century. Citing World Bank data, the report also notes that some 39 countries experienced a decline of 5 percent or more in wealth when accounting measures also included factors such as unsustainable forest harvesting, depletion of non-renewable resources, and damage from carbon emissions. For 10 countries, the decline ranged from 25 to 60 percent.

To avoid economic collapse at the global level, the State of the World authors call for major reforms of government policy to steer investment away from destructive activities such as the extraction of fossil fuels and toward a new generation of environmentally sustainable industries. Specific recommendations include making prices tell the ecological truth by reducing subsidies and adopting environmental taxes.

“We have the tools today to steer the global economy onto a sustainable path,”
say project co-directors Gardner and Prugh. “The task now is to bring them
together and scale them up so that they become the norm across today’s
economies.”

The report urges a full assessment and valuation of the services that nature provides free of charge to the human economy and describes several efforts to create markets to protect biodiversity. The report cites a recent assessment that found green accounting programs in place in at least 50 countries and identified 20 other countries that were planning to initiate such programs.

See also: Greenteck Media: Climate Change Redrawing World Economy, Worldwatch Says