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Even if the 2015 Paris Agreement is faithfully implemented, temperatures are already rising faster than anything we have seen in the last 20,000 years. How will the 21st century’s economic cycle and its weather cycle influence each other in an era of global warming?
As temperatures rise, the risk of resulting economic fallout also increases. Its impact picks up once a country exceeds the optimal average temperature of 13-15ºC.
“When it’s hotter, workers become less productive, investment may be lower, workers may encounter health problems, and agricultural yields may fall,” says Mr Obstfeld.
He explains why global warming is not just an environmental disaster but an economic one as well. “If we do nothing, if we do business as usual, by 2100 the median low income country will lose 9 per cent of its GDP. The consequences could go beyond anything we can estimate”.
Who then is most at risk and what can the international community do to help? Mr Obstfeld emphasises the importance of multilateral cooperation for the common good.
“It is important for global stability that countries that are most vulnerable adapt to climate change,” he argues. “Those living in the richer part of the world will not be immune to the spill overs that take place elsewhere.”