City wakes up to economic threat of global warming

In 1798 Thomas Malthus forecast that a huge increase in population would outpace food production by the mid-19th century, leading to a catastrophic famine. He was wrong. Malthus could yet be proved right, though not in the way he envisaged.

Today, scientists worry that global warming will lead to the sort of disaster Malthus predicted. If average temperatures keep rising, drought could devastate arable areas in developing countries where population growth is most pronounced, leading to widespread starvation. If the earth gets hotter, the polar ice caps will melt, causing sea levels to rise. The result will be floods that disrupt food production, and threaten life itself.


It may sound like a scene from a Hollywood disaster movie, but sober-headed City economists are beginning to publish reports that look at the implications of climate change as ‘extreme weather events’ become more commonplace.

A paper by Roger Brown, chief economic strategist at investment bank UBS, points out: ‘The recent acceleration of inflationary pressure reflects a rise in food prices caused by a weather-induced global reduction in supply.’ He says that ‘a cursory glance at different countries shows that there has been a pronounced acceleration in food price inflation since mid-2006. Agricultural production may not continue to increase as rapidly as it has in the past while, at the same time, population growth accelerates, putting staple food prices under pressure.’

Observer (UK)