Climate change’s economic bite will be $38 trillion a year by 2049, researchers predict

Climate change will reduce future global income by about 19% in the next 25 years compared with a fictional world that’s not warming, with the poorest areas and those least responsible for heating the atmosphere taking the biggest monetary hit, a new study says.

Climate change’s economic bite in how much people make is already locked in at about $38 trillion US a year by 2049, according to Wednesday’s study in the journal Nature by researchers at Germany’s Potsdam Institute for Climate Impact Research. By 2100, the financial cost could hit twice what previous studies estimate.

“Our analysis shows that climate change will cause massive economic damages within the next 25 years in almost all countries around the world, also in highly-developed ones such as Germany and the U.S., with a projected median income reduction of 11% each and France with 13%,” said study co-author Leonie Wenz, a climate scientist and economist.

The damages are compared with a baseline of no climate change and are then applied against overall expected global growth in gross domestic product, said study lead author Max Kotz, a climate scientist. So while it’s 19% globally less than it could have been with no climate change, in most places, income will still grow, just not as much because of warmer temperatures.

For the past dozen years, scientists and others have been focusing on extreme weather such as heat waves, floods, droughts and storms as the having the biggest climate impact. But when it comes to financial hit, the researchers found “the overall impacts are still mainly driven by average warming, overall temperature increases,” Kotz said. It harms crops and hinders labour production, he said.

“Those temperature increases drive the most damages in the future because they’re really the most unprecedented compared to what we’ve experienced historically,” Kotz said. Last year, a record-hot year, the global average temperature was 1.35 C warmer than preindustrial times.