Friday 24 October 2014

Irish economy vulnerable to effects of climate change – S&P

Published 16/05/2014 | 02:30

A girl holds up kerosine lamps as she makes her way through a flooded street in Dhaka, Bangladesh. Ireland is said to be vulnerable to climate change.

IRELAND is among the most vulnerable countries in Western Europe to the effects of climate change, according to rating agency Standard & Poors.

Climate change – including the potential for increasingly volatile and extreme weather – is set to be one of two global "mega trends" driving the credit-worthiness of states, the agency warns in a major new report.

The ageing world population is the other mega trend.

The report shows that poorer countries in Asia, Africa and the Caribbean are most at risk from climate change, but Ireland's reliance on agriculture makes the country particularly vulnerable compared with many other peers in Western Europe.

The likely effects of the looming pensions crisis are relatively clear, but the impact of climate change is "far hazier" and more challenging to predict, according to the report.

It is also impossible to say when the effects will start to be felt, according to the report.

However, the effects are likely to take a toll on economic growth and public finances, it warns.

By 2100 – less than 90 years from now – the cost could wipe between 2pc and 5pc off the overall size of the global economy.

Estimates for specific regions are for much more serious effects with the likes of coastal parts of Asia and the Carribean set to suffer particularly badly.

Government credit ratings could be affected, both because growth is likely to slow and because an increasing share of national budgets will be devoted to emergency relief and disaster recovery.

The report ranks 116 countries according to their vulnerability to climate change. The ranks of those most at risk are dominated by the world's poorest nations.

With flooding a major threat, low-lying, agriculture-dependent Vietnam, Bangladesh and Senegal face the worst fall-out of the 116 countries ranked.

Ireland is the 15th least vulnerable nation.

That is good by global standards but the table shows us at greater risk than France, Germany and the UK, as well as the US, because of the importance of agriculture to the economy here and because one in five people here lives within five metres of sea level.

Irish Independent

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