The impacts of global warming in other countries pose more of a threat to UK business than changes to our domestic climate, according to research commissioned by Defra
Greater supply chain disruption, more volatile commodity prices and increasingly frequent damage to assets caused by the impact of climate change overseas are likely to cost the UK economy hundreds of millions of pounds by 2050, estimates the business services firm PwC.
In a new report commissioned by Defra to inform the UK’s national adaptation programme, due to be published shortly, analysts from PwC warn that the economic impact of a changing climate in the UK is likely to be far outweighed by the changes global warming inflicts on other countries.
PwC estimates that in the 2050s damage to organisations’ overseas assets, caused by temperature rises in line with a 2°C increase, will cost the UK economy £1 billion each year.
Meanwhile, reduced availability of imported goods and increased volatility in food prices, as a result of disrupted supply, are each forecast to cost £100 million annually.
The report also warns that it is likely that increased incidences of extreme weather will result in £1 billion of government funds being spent on humanitarian aid.
The international impacts of global warming will also provide the UK with financial opportunities, however, particularly in selling adaptation technologies and services to other countries, although these benefits will not compensate for the likely risks.
“The report’s findings are an unequivocal call to action for business and policymakers alike to examine how the UK can avoid the worst impacts of climate change globally, and demonstrate the business case for further and faster action to tackle rising emissions,” commented Richard Gledhill, partner, sustainability and climate change, at PwC.
“We can’t afford to think of ourselves as an island when it comes to risks in investment, supply chains and trading.”
In 2010, UK investment abroad totalled £9.9 trillion, while imported foodstuffs provided nearly half of all food consumed in the UK in 2011.
