Climate impacts are expected to reduce global GDP by almost a fifth by 2050 April 19, 2024

A new study shows that climate change will cause enormous economic damage over the next 25 years (Frederic J. BROWN)

By AFP - Agence France Presse

Climate impacts are expected to reduce global GDP by almost a fifth by 2050

Climate change caused by CO2 emissions already present in the atmosphere will reduce global GDP by 2050 by around 38 trillion dollars, or almost a fifth, regardless of how aggressively humanity reduces carbon pollution, researchers said on Wednesday.

However, reducing greenhouse gas emissions as quickly as possible remains crucial to avoid even more devastating economic impacts after the middle of the century, they reported in the journal Nature.

The study shows that the economic consequences of climate change could increase by tens of trillions of dollars a year by 2100 if the planet warms significantly more than two degrees Celsius above mid-19th century levels.

The Earth's average surface temperature has already risen by 1.2 degrees Celsius above this reference, enough to amplify heat waves, droughts, floods, and tropical storms, which have become more destructive due to rising seas.

The annual investment needed to limit global warming to below 2ºC - the fundamental goal of the 2015 Paris Agreement - is a small fraction of the damage that would be avoided, according to the researchers.

Staying below the 2°C threshold "could limit the average regional income loss to 20 percent, compared to 60 percent" in a high-emissions scenario, lead author Max Kotz, a complexity science expert at the Potsdam Institute for Climate Impact Research (PIK), told AFP.

Economists disagree on how much should be spent to prevent climate damage. Some call for massive investment now, while others argue that it would be more economical to wait until societies are richer and technology more advanced.

- Poor countries are most affected -

The new research avoids this debate, but its mouth-watering estimate of economic impacts helps make the case for ambitious short-term action, said the authors and other experts.

"Our calculations are very relevant" for such cost-benefit analyses, said co-author Leonie Wenz, also a PIK researcher.

They could also inform government strategies for adapting to climate impacts, risk assessments for companies, and UN-led negotiations on compensation for developing nations that have barely contributed to global warming, she told AFP.

Most tropical countries, many of them with economies that are already shrinking due to climate damage, will be hardest hit, according to the study.

"The countries least responsible for climate change are predicted to suffer an income loss 60 percent greater than that of the highest-income countries and 40 percent greater than that of the countries with the highest emissions," said PIK senior scientist Anders Levermann.

"They also have the fewest resources to adapt to the impacts."

Rich countries won't be spared either: Germany and the United States are predicted to see their incomes fall by 11% by 2050, and France by 13%.

The projections are based on four decades of economic and climate data from 1,600 regions, rather than country-level statistics, which makes it possible to include damage ignored by previous studies, such as extreme rainfall.

- A probable underestimation -

The researchers also analyzed temperature fluctuations within each year, rather than just averages, as well as the economic impact of extreme weather events beyond the year in which they occurred.

"By taking these additional climate variables into account, the damage is around 50% greater than if we only included changes in average annual temperatures," the basis of most previous estimates, said Wenz.

Wenz and his colleagues found that the unavoidable damage would reduce the GPD of the global economy by 17% in 2050, compared to a scenario with no additional climate impacts after 2020.

Even so, the new calculations may be conservative.

"They are likely to be an underestimate of the costs of the impacts of climate change," Bob Ward, director of policy at the Grantham Research Institute on Climate Change and the Environment in London, told AFP ahead of the study's publication.

Damage linked to rising sea levels, stronger tropical cyclones, the destabilization of ice sheets and the decline of major tropical forests are all excluded, he noted.

Climate economist Gernot Wagner, a professor at Columbia Business School in New York, who also did not take part in the study, said that the conclusion that "trillions in damages are all locked in doesn't mean that reducing carbon pollution doesn't pay off".

In fact, according to him, it shows that "the costs of taking action are a fraction of the costs of unmitigated climate change".

Global GDP in 2022 was just over 100 trillion dollars, according to the World Bank. The study projects that, in the absence of climate impacts after 2020, this figure would double by 2050.

Marlowe HOOD

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