The climate future: We're entering a world of falling GDP and overheated seas

Sitting down to write this newsletter, I was thinking about a way to introduce it that would chime in with the fact that we are in December. It is the time we tend to look back on the year gone by, and since that inevitably leads to a sensation of time marching inexorably on, we can’t help feeling bittersweet. As we wave adieu to 2024, what is the one thing that is on top of our minds?

Of course I can’t generalize, but I’d dare say that many of us are probably thinking of the fact that India’s growth story has slowed. While the stock market went through a substantive period of correction over October and November, this was accompanied by—and was in part triggered by—proof that urban consumer spending had slowed down substantially, urban wages were down, and inflation was on the rise. GDP growth slowed to a seven-quarter low of 5.4%, and it is probably safe to say that a growth target of 7% every financial year will remain just that.

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It's a sobering way to end the year, and ironically enough, I have been reading a study that questions the very assumptions that underpin our optimistic belief in perpetually high GDP growth. And how that relates to climate change. More on that later. For now, let’s see how we’re doing on the climate front.

State of the Climate

It is now almost certain that 2024 will be the hottest year on record (absolute confirmation will only come next month). It is also on course to become the first year with an average global temperature of over 1.5 degrees Celsius, breaching the safety limit of global warming. According to the November data of the European Union’s Copernicus Climate Change Service (C3S), the average global surface temperature was 1.62 degrees Celsius hotter than pre-industrial (1850-1900) levels.

Moreover, C3S forecast that the entire year is going to be 1.6 degrees Celsius warmer, beating the previous record of 1.48 degrees Celsius of warming, set in 2023. As every year gets progressively hotter, the growing impact of this heating—from devastating wildfires in South America, to violent floods in Europe and deadly hurricanes in the US—is already biting.

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However, this doesn’t mean that the global attempt to cut greenhouse gas (GHG) emissions is futile. As the deputy director of C3S, Samantha Burgess, said, “This does not mean that the Paris Agreement has been breached, but it does mean ambitious climate action is more urgent than ever."

Apart from the obvious human suffering caused by climate change, it also poses a massive impact to global growth. The Switzerland-based insurance firm Swiss Re announced on 5 December that extreme climate events caused global economic losses of $320 billion. This is 6% higher than 2023, and 25% higher than the average of the previous 10 years.

In May, a working paper titled, The Macroeconomic Impact Of Climate Change: Global Vs. Local Temperature, published by the US-based National Bureau of Economic Research (NBER), stated that every 1 degree Celsius of warming causes a 12% loss to the global GDP. At current levels of climate action, the world is on the path to heat up by about 3 degrees Celsius by 2100. The study states that such a rise in heat will cause “precipitous declines in output, capital and consumption that exceed 50% by 2100." The study likens this damage to fighting a permanent domestic war.

There’s a steep economic price to be paid for failing to make a drastic shift from fossil fuels to renewable energy. A different study published in the journal Nature in April found that the current amount of heating baked into the atmosphere has already caused the global economy to commit to an income reduction of 19% over the next 26 years (approximately 22% for Africa and Asia).

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The study, The Economic Commitment Of Climate Change, further states that with “middle-of-the road" climate action, rising heat and widespread climate-related destruction would result in annual global losses of $38 trillion a year from 2050. At business-as-usual, average income loss would rise to 60% by 2100. Think what this would mean for the Indian economy, already facing the prospects of a middle-income trap, and gripped by economic inequality?

However, the study holds out hope: if we do reach net zero global GHG emissions by 2050, income declines will stabilize to an average of 20%. By that same year, the cost of mitigation—like shifting to renewables—would be only $6 trillion.

The news in brief

-Last week, as part of a cover story package on urban pollution in Mint Lounge, I wrote how climate change is already making Indian cities difficult to live in. If we do not act, I argue, this is only going to get worse as we continue to urbanize at a rapid rate.

-The COP29 climate summit has been widely seen as a failure, because of the refusal of rich countries to provide the requisite climate finance to Global South countries. In this piece, independent expert on climate change and clean energy Leen Srivastava argues that this will continue as long as global leaders and businesses don’t take a longer term view.

-In this piece, Mint journalist Pooja Das reports that the Indian government plans to set up an agency to regulate carbon trading and regulate green bonds. Sources in government tell her that this will, in part, help the government oppose stringent green norms, such as those imposed by the European Union.

Climate Change Tracker

How does an overheated Indian Ocean affect us?

The effects we see of climate change begin with the global ocean. The ocean acts as a sink that absorbs all the excess heat trapped in the atmosphere by GHGs. And if atmospheric temperatures are rising around the world, it is because the ocean is nearly saturated with an unnatural amount of heat. As it continues to absorb fresh heat every year, the effects are now literally spilling out on land.

For the past 50 years, the ocean has absorbed 90% of the excess heat. What has been the effect of this overheated ocean? And especially when it comes to India and South Asia, what can we expect from a hot Indian Ocean (as a marine region, this includes the Bay of Bengal, the Arabian Sea and the Indian Ocean). An important paper, Future Projections For The Tropical Indian Ocean, led by climate scientist Roxy Mathew Koll from the Indian Institute of Tropical Meteorology (IITM), Pune, and co-written with seven other researchers from India, China, the US, France and Switzerland, throws some light on the subject.

The Indian Ocean has warmed at a rate of 1.2 degrees Celsius per century from 1950-2020 (or 0.12 degrees Celsius per decade). In this time, the average sea surface temperature (SST) of the Indian Ocean has remained around 28 degrees Celsius. The researchers find that if we continue on our high emissions pathway, then, by 2100, the minimum SST temperature of the Indian Ocean could reach over 30 degrees Celsius and stay that way through the year.

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Now, why is that important? Among other things, high SSTs mean that the ocean contains more energy, and this energy fuels the development of cyclones, or cyclogenesis. The researchers state clearly that SSTs above 28 degrees Celsius give rise to both heavy rainfall events and stronger cyclones.

We have experienced both regularly in the last 5-6 years. In May 2020, the Bay of Bengal was in the grip of a marine heatwave with SSTs of 32-34 degrees Celsius. This supercharged Cyclone Amphan from a Category 1 to a Category 5 storm in just 18 hours, creating one of the most destructive cyclones in memory. In 2021, during the onset of the monsoon, the Arabian Sea was overheated by 2-3 degrees Celsius. This led to a violent rain event in the Western Ghats in Maharashtra in mid-July, leading to massive floods, landslides and loss of lives.

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An overheated ocean also leads to intense heatwaves over surrounding land, as we saw earlier this year, with South and Southeast Asia in the grips of a prolonged and severe heatwave between April and June. And finally, an Indian Ocean caught in a permanent marine heatwave also causes intense acidification in the waters, squeezing out oxygen and vital food sources for marine life. Not only does this result in the death of coral reefs, but also dramatically lowers seafood resources for us.

Know Your Jargon

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Degrowth

Popularized by the economic anthropologist Jason Hickel in his bestselling book Less Is More: How Degrowth Will Save The World, “degrowth", despite its provocative moniker, is actually about imagining a different paradigm of growth and economic production than the one that currently is in vogue.

Hickel’s latest paper on the subject, which came out this year, makes a solid case for degrowth, and ties it to resource depletion. Published in the journal Science Direct, the paper, How Much Growth Is Required To Achieve Good Lives For All? A Needs Based Analysis analyses economic production through the prism of quality of life and human needs.

I’m simplifying Hickel’s thesis somewhat here, but what he proposes is to do away with what he analyses as wasteful production (e.g. luxury goods), and focusing instead on industrial production of those items that ensure that the basic needs of every human being is met. He says that if this is achieved, there will be a “substantial surplus" of resources that will be left over to invest in “additional consumption, public luxury, scientific advancement and social investments".

The main thrust of his thesis is that developing countries should not ape the economic model of rich countries, since the latter are highly inefficient in managing the relationship between aggregate production and social outcomes. Simply put, much of what they produce don’t serve any public good, while wasting ridiculous amounts of fossil-fuel energy in the process. This is exemplified by high levels of poverty and inequality even in wealthy nations like the US. And if every country tries to achieve the “US ideal", the earth’s resources will be thoroughly depleted, and runaway climate change will be our future.

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This needs-based approach to growth aims to substitute growing total production with growing specific outputs to meet specific goals. Focusing on human wellbeing and social progress rather than capital accumulation, Hickel argues with exhaustive facts and figures, will lead to a “more efficient approach to human development".

In support of his methodology, Hickel cites the original framing of GDP, by the economist who invented it, Simon Kuznets. In 1962, Kuznets wrote, “…goals for ‘more’ growth should specify more growth of what and for what. It is scarcely helpful to urge that the over-all growth rate be raised to x percent a year, without specifying the components of the product that should grow at increased rates…" Hickel’s paper is essential reading, especially in relation to India’s GDP story.

Prime Number

1,000,000,000,000,000,000,000

That number is 1 zettajoule (zJ), or 1021joules of energy. As a result of climate change, the global ocean has absorbed 360zJ of energy since 1955 (according to NASA measurements). To put it in perspective, that’s the energy equivalent of about 25 billion atomic bombs.

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Over-land temperatures have so far been spared a massive spike due to the fact that just about 1% of this heat is in the atmosphere, with the ocean absorbing 90% of the heat. In the Indian Ocean study discussed above, researchers found that it has been absorbing heat trapped by GHGs at the rate of 4.5zJ a decade. In a business-as-usual scenario, this is predicted to rise to 16-22zJ per decade in the future.

Book Of The Month

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The Climate Book

If you are looking for the perfect introduction to the climate crisis and how it can be averted, then look no further than The Climate Book. Published in 2022, it brings together the best and most prominent voices from the fields of climate science, economics, policy and activism. It is an exhaustive tome that covers every aspect of the climate crisis in concise, thought-provoking essays.

So, that’s it for this edition of Climate Change And You, dear reader. See you again in a fortnight, when Sayantan will be writing the newsletter.

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