Study: Climate Change to Cost World $38T Every Year

Improve the News Foundation -

Facts

  • According to a study by Germany's Potsdam Institute for Climate Impact Research, climate change will result in a 19% reduction in income globally over the next 25 years.1
  • The study, published in the journal Nature on Wednesday, forecasts the annual economic cost of climate change to the global economy to reach $38T by 2049.2
  • Damages from rising global temperatures are estimated to cause a median income reduction of at least 11% in highly-developed countries, while the world's poorest nations are expected to suffer income losses 61% larger than richer counterparts.3
  • The researchers based their study on temperature data from over 1.6K regions in the past four decades, and used the climate change impact assessment to estimate future damage.4
  • The study compared predicted economic damages from climate change to a baseline where no climate change exists, and contrasted both scenarios against overall expected global growth in gross domestic product.3
  • The study suggests that if the world limits warming to 2°C, per the 2015 Paris Climate Agreement, the reduction in global income will hover around 20%. However, higher emissions could cause an income reduction as high as 60%.5

Sources: 1Bloomberg, 2Forbes, 3ABC News, 4Reuters and 5Associated Press.

Narratives

  • Narrative A, as provided by IMF. While policies that address and work to combat climate change-causing carbon emissions will likely impact the global economy and may have very little yield in the short term, these policies are a crucial investment in our future. They will save billions of dollars in future damages and pay off in the long run. Any delay to these policies will only further hurt the global economy.
  • Narrative B, as provided by The Heritage Foundation. While a shift to clean energy is often touted as an essential part of addressing the carbon emissions that cause global warming, it's certainly not the only solution or best suited solution to protect our future economy. This costly industrial shift is not economically sustainable without expensive government subsidies and often leads to cutting more jobs than it creates. Economic policies shouldn't be driven by climate rhetoric.

Predictions