Economy Watch: World Bank Warns of Long-Term Economic Dislocation from Climate Change
- Nov 25, 2014
The World Bank released a report on the long-term impact of climate change on Monday, focusing on the affect on the “lives and livelihoods” of people in three parts of the world. “The consequences for development would be severe as crop yields decline, water resources shift, sea-levels rise, and the livelihoods of millions of people are put at risk,” the report notes. It was prepared for the organization by the Potsdam Institute for Climate Impact Research and Climate Analytics.
At this point, the report asserts, a rise in the average worldwide temperature by 1.5 degrees C. (2.7 degrees F.) above pre-industrial levels by the mid-21st century is unavoidable, and even “very ambitious mitigation action taken today” won’t change that. Currently, the world is 0.8 degrees C. warmer than pre-industrial levels.
The report also says that the risks of reduced crop yields and production losses for the regions studied—Latin America, the Middle East and Central Asia—increase significantly above 1.5 degrees C. to 2 degrees C. warming. It notes that declines in agricultural productivity will have impacts outside core producer regions, with strong repercussions on food security, and may negatively affect economic growth and development.
“These changes make it more difficult to reduce poverty and put in jeopardy the livelihoods of millions of people,” World Bank Group President Jim Yong Kim says. “They also have serious consequences for development budgets, and for institutions like the World Bank Group.”
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved down to +0.14 in October from +0.29 in September, according to the central bank on Monday. That’s still above-average growth for the economy, just not as much as a month ago.
Two of the four broad categories of indicators that make up the index made negative contributions to it in October. Production-related indicators came in at –0.01 for the month, while consumption and housing category was –0.12. On the other hand, employment related indicators came in at +0.16, and the sales, orders and inventories category was +0.11 in October. The four broad categories all together include a total of 85 separate economic indicators.
The index’s three-month moving average, CFNAI-MA3, declined to –0.01 in October from +0.12 in September. October’s CFNAI-MA3 suggests, according to the Chicago Fed, that growth in national economic activity was near its historical trend.
Wall Street had another modest up day on Monday, with the Dow Jones Industrial Average gaining 7.84 points, or 0.04 percent. The S&P 500 and the Nasdaq were up 0.29 percent and 0.89 percent, respectively.