Over-Reliance on GDP Increases Climate Dangers by Ignoring Them, Report Warns
The time to think and act “beyond GDP” has come, as our dependence upon purely economic statistics such as Gross Domestic Product as default measures of well-being pushes both planetary and human systems toward breakdown, leading experts warn.
Governments everywhere must “recalibrate climate risk” as accelerating global heating pushes Earth’s systems, including human economies, into a terra incognita of climate shocks and breached tipping points, warns a new report co-authored by Earth system scientists at the University of Exeter and financial analysts at the Carbon Tracker Initiative.
That means climate change can no longer be treated as “a marginal shock to otherwise stable economic systems” that will keep chugging along even with reduced outputs, write the report authors, who consulted with 68 climate scientists from around the world.
Rather, climate change has become “structural,” with impacts increasingly likely to “disrupt multiple sectors at once; interact across regions through trade, finance, migration, and geopolitics; and trigger non-linear responses in environmental and human systems,” they add.
“We’re not dealing with manageable economic adjustments,” Jesse Abrams, study co-author from the University of Exeter, told The Guardian.
The Exeter/Carbon Tracker team further warns that the cost of climate impacts will grow increasingly unpredictable as temperatures rise.
“At higher temperatures—particularly beyond 2°C—confidence in precise damage estimates declines sharply, even as potential consequences grow,” they write. “From a precautionary standpoint, rising uncertainty should increase, not decrease, the urgency of action.”
But policymakers, alongside regulators and investors, continue to ignore climate’s impacts because of their collective and decades-long dependence on GDP as the standard measure of well-being.
That dependence is now deeply dangerous, the Exeter/Carbon Tracker team warns.
“Too narrow to represent climate damages, with estimates significantly underrepresenting true economic, societal, and environmental harm,” GDP “may even rise following disasters due to reconstruction spending, masking welfare losses entirely.”
Such “masking” may in turn give policymakers and financial institutions “a false sense of resilience, even as underlying vulnerability increases.”
Most of the climate experts consulted by Exeter/Carbon Tracker advised that moving “beyond GDP” is now an imperative. United Nations Secretary General António Guterres strongly shares that view.
“GDP tells us the cost of everything, and the value of nothing,” Guterres told The Guardian. But “our world is not a gigantic corporation.”
Guterres spoke with The Guardian shortly after hosting the second meeting of the UN’s High Level Expert Group on Beyond GDP in Geneva in mid-January. Founded in May, the expert group has described GDP as “a harmful anachronism at the heart of global policymaking.”
“While a useful economic metric,” GDP “does not adequately reflect the multidimensional nature of sustainable development,” the UN group writes. That gap “has become increasingly salient in the context of climate change, deteriorating ecosystems and biodiversity loss, rising conflict and food insecurity, and historic inequalities.”
In an interim report initiative published in November, the Beyond GDP initiative warned of “an increasing gap between what politicians and citizens believe is happening, and the latter’s life experiences [which] are not matched by the story told by GDP alone.”
The UN group—a team of economic and development experts—is now working to develop and promote a dashboard that equips governments with the information they need to meet the UN’s 17 Sustainable Development Goals.