MAGYAR NEMZETI BANK Institute (IFPRI), the pollution generates an annual cost increment of USD 30 billion for India. Ikea’s latest collection is meant to address this problem. Instead of burning it, farmers can take rice straw to collection points, which then continues as base material for Ikea furniture, as a result of which the degree of air pollution will improve on the whole.
decrease in ozone concentration entailed a 4.2 percent increase in the productivity of agricultural workers. In addition, higher temperature naturally also materially curbs energy efficiency, since protection against the extreme weather conditions consumes major resources. Just think about the penetration of the air conditioning equipment in the past decades.
Degradation of the environment and climate change have negative effect on global productivity via several channels. The issue has not been included in the key research areas of economists for a long time; however, the increasingly more frequent occurrence of extreme hot days and extreme rainy/rainless period seen recently has shifted the focus of analyses to this problem. Based on a conservative estimation by the ILO (2019), the rise in heat stress (a high ambient temperature that is The 2011 report8 of the UN’s Environmental Programme on difficult for the body to tolerate; usually a temperature over 35 the green economy examines the changes in economic, social degrees Celsius with high humidity) will reduce global working and environmental variables with the realisation of different hours by 2.2 percent by 2030, equivalent to the termination assumptions. The report’s baseline scenario projects a contiof 80 million jobs or the loss of USD 2,400 billion. nuation of the present trends, i.e. high energy consumption and greenhouse gas emissions, and the exhaustion of Naturally, agriculture is the sector most exposed to extreme environmental resources. According to the assumptions, no weather conditions. Significant fluctuations in the quantity technological change takes place, i.e. utilisation of the and changes in the pattern of precipitation, as well as the currently available, polluting technologies remains typical. In major increase in temperature significantly reduce crop this scenario, population growth continues, and the number yields. According to Deryugian and Hsiang (2014), the afore- of employees also rises, reaching 4.8 billion persons by 2050. mentioned factors in the USA reduced farmers’ daily income Real GDP may be roughly USD 151.3 trillion,9 while the GDP by USD 3 on average between 1969 and 2011. Moreover, per capita may rise to USD 17,000 by 2050. As a result of according to their forecast, in the absence of proper economic growth, the number of those living below the adjustment, this value will increase further in the future. poverty line declines further. Value added rises, albeit to a Wheat, rice, maize and soy account for two thirds of human different degree, in all three sectors (agriculture, industry, calorie intake, but the warmer average temperature may services). However, the growth path presented has a price, as reduce crop yields. If the global average temperature rises environmental degradation continues to accelerate, and the by 1 degree Celsius, the average crop of wheat will decrease production constraints of the economy ultimately become by 6 percent, while that of rice, maize and soy by 3.2 percent, effective, leading to a sharp decline in the long run. 7.4 percent and 3.1 percent, respectively.5 In the event of a higher temperature increase, crop yields will decline to an Population and GDP growth result in a further rise in global even larger degree, thereby jeopardising the supply of the energy demand (19,733, Mtoe, million tonnes of oil equivalent), increasing population with food. a large part of which (81 percent) is still provided by fossil fuels. In line with higher population and GDP, by 2050 total Graff Zivin and Neidell (2012) examined the productivity of water consumption increases by more than 70 percent agricultural workers working on a farm in the Central Valley compared to its 2011 level, which entails further acidifiin California. Measurement of the performance and the cation of waters. In line with increasing demand for food, wage setting of the workers are performed by an electronic areas of agricultural cultivation – croplands and grasslands – system; the system monitors their work by real time data increases, and partly due to this, the ratio of forest areas and the wage is settled on the basis of this. The authors decreases further (3.7 billion hectares in 2050), resulting in compared these data with the ozone concentration of the reduced carbon capture. Larger population and higher lower part of the atmosphere.6 They found that a 10 ppb7 income also entails an increase in waste production.
2.2 What can we expect if nothing changes?
5 Zhao et al. (2017) https://www.pnas.org/content/114/35/9326 6 Ozone is one of the components of smog, and apart from this it is a health hazard substance on its own as well. 7 Part per billion gas particle. 8 UNEP (2019). 9 Fixed USD 2010.
28
GROWTH REPORT • 2019
