Melting Arctic could cost global economy over $2.4tn

The melting of ice in the Arctic could result in economic costs of between $2.4 trillion (£1.54tn) and $24 trillion by 2050, according to a major new study that predicts that the loss of "the planet's air conditioner" will accelerate the rate of global warming and lead to an increase in losses associated with heat waves, rising sea levels and other climate change effects.

The study, which was commissioned by the Pew Environment Group, was presented to G7 finance ministers gathering for a two-day meeting on Canada's Baffin Island late last week.

Reviewed by more than a dozen scientists and economists, the study found that average temperatures are rising faster in the Arctic than in any other region. It warned that the resulting loss of Arctic sea ice and the melting of frozen permafrost had the potential to accelerate global warming by reducing the amount of heat reflected by the ice and increasing emissions of methane.

Researchers then calculated how these warming effects equated to carbon emissions and used methodologies for assessing the social cost of carbon to work out the likely economic impact of climate change in the Arctic.

"Putting a dollar figure on the Arctic's climate services allows us to better understand both the region's immense importance and the enormous price we will pay if the ice is lost," said Dr Eban Goodstein, co-author of the report and an economist who directs the Bard Center for Environmental Policy at Bard College in New York. "At the mid-range of our estimates, the cumulative cost of the melting Arctic in the next 40 years is equivalent to the annual gross domestic products of Germany, Russia and the United Kingdom combined."

The report calculates that this year alone, the warming effects of Arctic melting could have an impact equivalent to emitting three billion metric tons of CO2. "That's equal to 40 per cent of all US industrial emissions this year or bringing on line more than 500 large coal-burning power plants," said Dr Eugenie Euskirchen, co-author of the report and a scientist from the University of Alaska at Fairbanks’ Institute of Arctic Biology.

Scott Highleyman, international Arctic director for the Pew Environment Group, called on G7 finance ministers to commission a full economic analysis of the "global climate services" provided by the Arctic.

The report comes as climate scientists continue to face the fallout from the so-called Climategate affair, with a new survey by the BBC showing that the number of people who accept that temperatures are rising primarily as a result of human activity has fallen since emails from the University of East Anglia purportedly showing scientists attempting to resist freedom of information requests were stolen.

The survey of 1,000 people found that a quarter did not believe in global warming - a rise of eight per cent since a similar poll last year. Meanwhile, a third of those who did accept that temperatures are rising felt the pace and scale of climate change was being exaggerated.

Yet despite an unseasonably cold winter in Europe and the US, scientists have found that climate change is impacting the Arctic faster than expected, with a separate study involving more than 370 scientists from 27 countries showing on Friday that sea ice is retreating at a more rapid rate than previous models had predicted.