Climate change could cost Nepalese GDP at 13.15 percent by 2100

August 22, 2019 | Investopaper

As per a new report published by the National Bureau of Economic Research, Nepalese GDP could be hit by a  13.15 percent drop due to climate change by 2100.

The researchers were focused to analyze the ‘Long term Macroeconomic effects of Climate Change’ by conducting a cross country analysis. In doing so, they used the stochastic growth model to study the long term impact of climate change on economic activities covering different parts of the country. In a stochastic model, labor productivity is affected by country-specific climate variables.

According to the Paris Agreement goal, the increase in average global temperature is set at  0.01 degree Celsius per year. So, ignoring this will result in a  GDP loss of 1.61 percent and 4.86 percent in 2030 and 2050 respectively to the Nepalese economy.

However, holding the increase in global average temperature below 2-degree Celsius above pre-industrial levels would limit the economic loss to 0.59 percent, 1.82 percent, and 5.34 percent by 2030, 2050 and 2100 respectively.

Nepal will bear the second big loss in GDP due to climate change among South Asian countries, trailing only to Bhutan which will lose 10.33 percentage by 2100 even if the rise in temperature is limited to Paris Agreement. Likewise, India will see a 9.90 percent GDP loss by 2100.



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