Climate change, can potentially cause Indonesia’s GDP to drop IDR 112 Trillion

Jakarta – Minister Sri Mulyani warned the country would lose economic potential of up to 0.5% of Gross Domestic Product (GDP) or around IDR 112 trillion due to global climate change. The economic loss due to the climate crisis is expected to occur in 2023.

“The potential economic loss for Indonesia due to climate change is 0.63% to 45% of GDP in 2030, if this continues,” Sri Mulyani said at the HSBC Summit 2022, Tuesday (20/9).

She said that in the period 2010 to 2018, greenhouse gas emissions had increased by 4.3% per year. In addition, the current average global temperature has increased by 0.03 degrees Celsius which in turn has an effect on Indonesia. As a result, sea level in Indonesia rises on average 0.8-1.2 centimeters per year.

The latest UN report also reveals that the world is moving in the wrong direction when it comes to tackling climate. Not only parts of Java Island, many cities are sinking, said Mulyani, referring to a research published by a Swiss institution last year.

The research says that the world will lose more than 10% of its economy if the Paris agreement is not fulfilled in 2050. Mulyani said, gradually, inflationary pressures can arise due to disruption of national and international supply chains due to weather changes such as floods and storms. This situation has the potential to result in substantial financial losses. In fact, the Minister said it could lower the GDP level even further.

Meanwhile, UN Secretary-General António Guterres recently told USA Today, floods, droughts, heat waves, extreme storms and wildfires are going from bad to worse, breaking records with alarming frequency. “There is nothing natural about the new scale of these disasters. They are the price of humanity’s fossil fuel addiction,” he said.

The United Nations also warned that the last seven years were the hottest on record on Earth. It is possible that in the next five years, Earth’s citizens will record heat. In addition, it is possible, for at least one year in the next 5 years, the temporary annual average temperature will rise to 1.5 degrees Celsius higher than the 1850-1900 average. (Hartatik)

Banner photo: Minister of Finance Sri Mulyani
(Source: Ministry of Finance)

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