Economic damage from climate catastrophe 6x worse than thought
4 Min Read
A research paper reveals that the economic damage will be almost uniform around the world, starting with lower-income countries at a lower point in wealth, which should instigate wealthy countries like the US to reduce planet-heating emissions in their own economic interest.
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A farmer walks on a lake that has dried up due to drought outside Beed, India, Saturday, May 4, 2024. (AP)
Just a 1°C jump in global temperatures causes a 12% decline in the world’s GDP, new research warns, while many climate scientists are forecasting a 3°C increase will take place by the end of this century due to the continuous burning of fossil fuels.
A new working paper by researchers reveals that a 3°C temperature increase will bring “precipitous declines in output, capital and consumption that exceed 50% by 2100,” which is so severe that it is “comparable to the economic damage caused by fighting a war domestically and permanently”.
Adrien Bilal, an economist at Harvard who wrote the paper with Diego Känzig, an economist at Northwestern University, said, “There will still be some economic growth happening, but by the end of the century people may well be 50% poorer than they would’ve been if it wasn’t for climate change.”
He added, “I think everyone could imagine what they would do with an income that is twice as large as it is now. It would change people’s lives.”
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According to Bilal, purchasing power would already skyrocket to 37% higher than it is now without global heating seen over the past 50 years.
“Let’s be clear that the comparison to war is only in terms of consumption and GDP – all the suffering and death of war is the important thing and isn’t included in this analysis,” he said, adding, “The comparison may seem shocking, but in terms of pure GDP there is an analogy there. It’s a worrying thought.”
Better safe than stormy
Bilal believes that having a more “holistic” approach by examining it on a global scale, rather than on an individual country basis, demonstrates the interconnected nature of the impact of heatwaves, storms, floods, and more climate impacts that damage crop yields, diminish worker productivity and reduce capital investment.
Gernot Wagner, a climate economist at Columbia University who wasn’t involved in the work, stated, “They have taken a step back and linking local impacts with global temperatures,” noting that “If the results hold up, and I have no reason to believe they wouldn’t, they will make a massive difference in the overall climate damage estimates.”
The research paper revealed that the economic damage will be almost uniform around the world, albeit with lower-income countries starting at a lower point in wealth, which should instigate wealthy countries like the US to reduce planet-heating emissions in its own economic interest.
For example, climate change could cost Germany about one trillion euros by 2050, according to a government-commissioned study published last year.
The paper comes after the release of another research last month, which showed that average incomes will plunge by almost a fifth within the next 26 years, while rising temperatures, heavier rainfall, and more frequent extreme weather are expected to cause $38tn of destruction each year by mid-century.
While the influence of global warming on heavier rainfall is not consistently evident, warmer air can hold more moisture, potentially leading to more intense storms. However, the interplay of intricate climatic shifts can affect the availability of water for precipitation.
“Unmitigated climate change is a lot more costly than doing something about it, that is clear,” said Wagner.
