Mnuchin and others scoffing at her should look at what McKinsey estimates is in store for the planet from inaction.
US treasury secretary Steven Mnuchin dismissed climate activist Greta Thunberg’s call at Davos for the world to divest from fossil fuel by joking “Who’s she?” and then suggesting that she should only be heard after she “goes and studies economics in college”. If Mnuchin and co. have not, so far, been able to acquaint themselves with the existing scientific research on climate change and its impact, including that involving sophisticated economic modelling, they would do well to pay heed to the McKinsey’s Climate risk and response: Physical hazards and socioeconomic impacts report, released recently. The report focuses on the impact the Representative Concentration Pathway (RCP) 8.5—the high-emission scenario, chosen keeping in the mind the possibility of a retreat from further decarbonisation— and predicts, for instance, that, by 2030, heat and humidity rise in India will put 160-200 million people in regions that will have a 5% annual probability of experiencing a heat wave exceeding the survivability threshold for a healthy human adult.
By 2050, the number of people living in areas that have non-zero chance of lethal heat waves would rise from zero today to between 700 million and 1.2 billion—that’s a galactic jump in vulnerability. The average share of annual outdoor working hours lost due to extreme heat and humidity in vulnerable regions—all developing or least developed economies—would rise to 20% by 2050, from 10% today. The McKinsey report specifically dwells on the extreme heat stress that the RCP 8.5 scenario means for India—while urban areas will be the first to experience the lethal heat waves, by 2030, the average number of lost daylight working hours could put nearly 2.5-4.5% of the GDP at risk. Given nearly 75% of India’s labour force is employed in heat-exposed work, unless India undertakes urgent reforms and skilling initiatives, it faces a future of rampant unemployment/under-employment. How badly the US is likely to suffer, as per the McKinsey projections, could perhaps help Mnuchin take Thunberg more seriously—it is expected to witness >10% fall in grain yields by 2050 compared to the 1998-2017 period. An analysis by the Cambridge Risk Studies Centre, cited in the McKinsey study, projects >$1 trillion in damage due to a tail risk hurricane in eastern US. If Mnuchin and leaders of the top-polluter economies remain sanguine, or worse, are derisive, when a Thunberg holds them to account, a climate apocalypse or a series of catastrophes that break the back of human civilisation doesn’t seem like hyperbole.
Mnuchin—his boss and infamous climate-denier, Donald Trump, will walk the US out of the Paris agreement if he wins the upcoming elections in the US—and others, like Brazil’s Jair Bolsonaro and Australia’s Scott Morrison, need to realise the world can no longer delay meaningful climate action. That said, climate mitigation will mean untold opportunities for corporates. Even as Microsoft founder Bill Gates writes of how funding for R&D on climate solution has risen by over $3 billion a year, given how little time the world has to act—the UN estimates we might be very close to the point of no return for a catastrophic warming future—that funding may not prove enough. While the Mission Innovation, launched in Paris in 2015 by 20 major energy economies to “accelerate public and private clean energy innovation”, aimed to double public clean energy R&D expenditure to encourage the private sector as well—this would have resulted in an additional $15 billion spending by 2021—there is little to show. Meanwhile, large MNCs, save a handful, seem lukewarm towards directing a chunk of their R&D expenditure to green technologies.