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Climate change could depress global income by almost 20%, study shows

The effects of global warming are expected to depress global income by about $38 trillion every year through 2049.
Climate change could depress global income by almost 20%, study shows
Posted at 10:03 PM, Apr 17, 2024

A new report measuring the economic effects of climate change says we may expect global income to be 19% lower than it would be without global warming over the next 25 years.

The new research, published Wednesday in the journal Nature, analyzed 40 years of climate-driven effects on global GDP to project what continued climate change would mean for future economic growth. It found that compared to a theoretical future without these climate effects, "the world economy is committed to an income reduction of 19% within the next 26 years independent of future emission choices."

The effects of global warming are expected to depress global income by about $38 trillion every year through 2049. An average U.S. or German income could drop by 11%, for example, while a French income may drop by 13%.

This drop may not be obvious across the board, however, since the expected overall growth in global GDP is likely to still translate to individual income growth in many if not most cases.

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Researchers say the biggest economic threat is most likely to come not from the damage of individual extreme events like hurricanes or wildfires, but from the slow upward creep of average temperatures, which can have broad effects on labor output or crop yields.

"The overall impacts are still mainly driven by average warming, overall temperature increases," study lead author Max Kotz told The Associated Press. "Those temperature increases drive the most damages in the future because they're really the most unprecedented compared to what we've experienced historically."

Poorer countries will see greater declines in their average incomes than richer ones, the study shows. In general, latitudes near the equator will see the most severe impacts, while certain regions near the poles may see an average benefit.

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The projected damage is considered "committed," meaning it's based on historical emissions that cannot be reversed and on the plausible trajectories for the next 25 years of future emissions.

The projected economic damage is already higher than the estimated cost of a global mitigation effort that could keep worldwide warming below a 2-degrees-Celsius threshold. But the researchers say working to limit the damage still makes economic sense — especially in the latter half of the century, when the effects of climate change are projected to become much more apparent.

"Damage estimates diverge strongly across emission scenarios after 2049, conveying the clear benefits of mitigation from a purely economic point of view that have been emphasized in previous studies," the research team wrote.

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