Climate change will cost global economy USD 38 trillion every year by 2050: Study
Countries near the equator, historically contributing less to emissions and with lower incomes, are expected to suffer the most economically; regions near poles may see benefits
The global economy is expected to lose about 19 per cent income in the next 25 years due to climate change, with countries least responsible for the problem and having minimum resources to adapt to impacts suffering the most, according to a new study.
The study by scientists at Germany’s Potsdam Institute for Climate Impact Research (PIK) published on Wednesday said South Asia and Africa will be strongly affected with a median income loss of around 22 per cent in 2050. Maximilian Kotz, a PIK scientist, said, “Our study finds that the global economy is committed to an average income loss of 19 per cent by 2049 due to past emissions. This corresponds to a 17 per cent reduction in global GDP.” The analysis shows 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, France, and the United States, said scientist Leonie Wenz, who led the study published in the journal Nature. The predicted loss is massive and already about six times more than what it would cost to reduce carbon emissions enough to keep the average temperature rise below 2 degrees Celsius, the researchers said. These economic damages are mostly due to rising average temperatures. However, when the researchers also considered other factors like rains and storms, the predicted economic damages increased by about 50 per cent and varied more from one region to another.
The researchers looked at detailed weather and economic data from over 1,600 regions globally, covering the last 40 years. While most regions in the world are expected to suffer economically due to climate change, they said regions near the poles might see some benefits due to less temperature variability. On the other
hand, the hardest-hit regions will likely be those closer to the equator, which have historically contributed less to global emissions and currently have lower incomes.
“We find damages almost everywhere, but countries in the tropics will suffer the most because they are already warmer. Further temperature increases will therefore be most harmful there,” said Anders Levermann, head of Research Department Complexity Science at the Potsdam Institute
and co-author of the study.
The countries least responsible for climate change are predicted to suffer income loss that is 60 per cent greater than the higher income countries and 40 per cent greater than higher emission countries. They are also the ones with the least resources to adapt to its impacts, he said. Global average temperatures have risen by more than 1.1 degrees Celsius since 1850, exacerbating climate impacts, with 2023 being the hottest on record.