A new study published in Nature by researchers at the Potsdam Institute for Climate Impact Research predicts that the world economy could see a 19% reduction by 2049 due to the impacts of climate change. The study takes into account the cost of loss productivity, mitigation efforts, and damages, and suggests that the global GDP could be reduced by as much as 29%. Climate activists are calling for more aggressive measures to prevent climate change and fund mitigation efforts in light of these findings.
Previous studies have estimated the annual cost of climate change to be between $1.7 trillion and $3.1 trillion by 2050, accounting for damage to infrastructure, property, agriculture, and human health. The new study takes a more aggressive approach by analyzing the impacts of temperature and precipitation on labour and agricultural productivity, as well as health and flood damages. South Asia and Africa are predicted to be most strongly affected, while Central Asia/Russia could see reduced impacts.
Using 40 years of data from 1600 regions, the researchers calculated that the world economy is committed to a 19% income reduction by 2049, with potential annual damages ranging from $19 trillion to $59 trillion. Despite these projections, the income levels are still expected to increase relative to today. The study provides a cautious estimate of the potential economic impacts of climate change, with a “middle-of-the-road” projection of $38 trillion in annual damages.
Some experts question the validity of the study, citing the resilient nature of humans and our ability to overcome economic challenges. Factors such as heatwaves, sea-level rise, tropical cyclones, tipping points, damages to the ecosystem, and human health were not considered in the calculations, which were based solely on temperature and precipitation increases. As an outlier study, the claim that climate change will reduce the global economy by 19% should be viewed with caution.
Despite skepticism from some experts, the study highlights the urgent need for action to address climate change and prevent severe economic consequences. With the cost of inaction potentially outweighing the cost of mitigation efforts, climate activists are advocating for more aggressive measures to reduce greenhouse gas emissions and invest in renewable energy. The findings of the study serve as a stark warning of the potential economic impacts of climate change and the importance of taking action to protect the planet and the global economy.
