Climate change can shrink a nation's GDP: Here's why that matters

What does the temperature of the ocean have to do with Honduras’s GDP?

If you can answer easily, stop reading. If not, you, like many others, might benefit from exploring the interconnections between climate change and sustainable development.

Though discussed with increasing frequency by the media, public and private sector, the complexities of climate change make it difficult to fully grasp. Discussion tends to focus on the impacts of global temperature rises in the distant future, but the reality, according to the newest publication of the Intergovernmental Panel on Climate Change, is that “climate change is already affecting every region on Earth, in multiple ways.”

But what does this really mean? How exactly is climate change affecting these regions? And what can be done about it? With less than a decade left to achieve the Sustainable Development Goals (SDGs), answering these questions is a matter of urgency.

Let’s take a look at Latin America. According to the “State of the Climate in Latin America and the Caribbean”, 2020 was among the three warmest years on record in Central America and the Caribbean, and the second warmest year on record in South America.

Where does this heat go? Approximately 90% of the excess energy that accumulates in the earth system is absorbed by the ocean, changing its temperature at the surface and various levels of depth. Sea surface temperature has been steadily increasing worldwide and, in the Caribbean, 2020 was the year with the highest positive anomalies on record. Such high temperatures likely contributed to the record-breaking Atlantic tropical cyclone season, with 30 named storms in 2020.

The impacts of such an active tropical cyclone season on development in the region cannot be overstated. Among the worst was the impact of hurricanes Eta and Iota, whose unprecedented overlapping paths affected more than 8 million people. Guatemala, Honduras and Nicaragua were among the worst-affected countries, compounding existing economic inequality, impacts from COVID-19 and conflict. In Honduras alone, damage from the storms amounted to $1.8 billion, leading to a reduction of approximately 0.8% in GDP growth.

Here we arrive at an answer to the initial question: The temperature of the ocean can have a significant impact on the GDP of an entire nation, as it is a key component of regulating hurricane activity.

However, the impacts of extreme events like hurricanes are not just monetary. Hurricanes Eta and Iota alone caused disruptions to livelihoods, loss of electricity and millions of hectares of crops, damage to infrastructure (including health facilities and schools), contamination of water sources, and an increase in displacement, notably attributed with a rise in violence against women and children. Together, these impacts hinder the achievement of SDGs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11 in the region.

The temperature of the ocean is just one indicator of how the climate is changing and the impacts that it can have on sustainable development. Part of what makes climate change so complex is that these climate indicators, or the component parts of the climate system, are interconnected and reinforcing.

For example, the temperature of the ocean is not just associated with increased storm activity; it also has a significant role in the health of marine species and ecosystems such as coral reefs, and the communities that depend on them (SDG 14). Additionally, as the ocean warms, not only does it expand, leading to sea level rise, it also perpetuates the melting of sea ice, revealing darker water, that in turn absorbs more heat, in a feedback loop. Finally, as water warms, its capacity to store carbon dioxide from the atmosphere is reduced, impacting the efficacy of any climate action taken by nations (SDG 13).

Thus, by connecting changes to the physical components of the climate with worsening extreme events and their impacts, it becomes clear that climate change is not a geographically or temporally distant phenomenon, but rather something that is already having a concrete and detrimental impact on sustainable development.

The first step to action is understanding. To facilitate a better understanding of climate change and encourage more drastic climate action, the World Meteorological Organization (WMO) is now producing regional “State of the Climate” reports that concretely measure and track the changes occurring to the climate regionally.

Using key climate indicators, peer-reviewed data, world-class climate experts and input from multiple United Nations agencies, the reports aim to enable readers across all disciplines to better comprehend the cause-and-effect relationships that govern the key components of the climate system, and how they are interconnected with wellbeing and broader sustainable development.

However, these reports alone are not enough. Innovative digital tools such as ArcGIS StoryMaps and the World Economic Forum’s Strategic Intelligence maps provide new ways to engage with climate data, learn about the science, and explore the connections to other global issues.

But the real solution lies with us. Only by engaging with complex climate information, sharing it with our networks and demanding improved policy will we see real change. Start exploring these tools yourself to see how improved climate literacy can lead to action.

Not only are the SDGs relying on it, we all are.

For more information, 'State of the Climate' reports for Latin America and the Caribbean, Asia, and Africa have recently published, as well as this brochure connecting climate indicators to sustainable development.