How does climate change affect the global economy? Study predicts average income may decrease by 19% in 2049

Chinanews.com, Beijing, April 18 (Reporter Sun Zifa) How does climate change affect the global economy? The internationally renowned academic journal Nature recently published a climate change research paper, saying that the corresponding economic losses caused by climate change predict that the average income of the global economy may decrease by 19% by 2049. The model further points to the potential consequences of unrestricted carbon emissions, as well as the uneven impact of these consequences on the global scale.

According to the paper, the loss of global income is one of the manifestations of the corresponding economic losses caused by climate change, and the prediction of economic losses due to climate change is important for adaptation planning of both public and private entities. However, research models are often constrained by the frightening and variable nature of long-term climate outcomes.

Projected changes in global income compared to an economy without climate change. By mid-century, the losses were six times higher than the cost needed to achieve the Paris Climate Agreement (Image via Maximilian Kotz). Springer Nature/Courtesy photo

In this study, corresponding author Leonie Wenz of the Potsdam Institute for Climate Impact Research in Germany and colleagues combined local temperature and precipitation data from more than 1,600 regions around the world with climate and income data over the past 40 years to simulate the potential impact of different climate scenarios on economic productivity.

Their modelling projections suggest that the global economy could lose 19% of its previous emissions revenues by 2049 compared to a baseline level without climate change impacts. These estimated losses will be more than six times the corresponding costs of limiting warming under the Paris Climate Agreement, suggesting the economic benefits of mitigating climate change in the second half of the 21st century.

Projected changes in global revenues relative to an economy without climate change under high and low emissions scenarios. Losses before 2049 are six times higher than the cost of achieving the Paris Climate Agreement under different scenarios, no different under the scenario (Image via Maximilian Kotz). Springer Nature/Courtesy photo

Most of these losses come from temperature changes, but the authors extrapolate that the estimated losses increase by 50% if additional climate variables are taken into account. In addition, the income losses of lowest-income and historically lowest-emitting countries are estimated to be 61% higher than those of high-income countries and 40% more than those of high-emitting countries, suggesting that further warming could exacerbate climate inequality.

The authors conclude that the data suggest that the global economy is likely to be severely affected by human-induced climate change, with the lowest income countries likely to be the ones with the greatest income losses. (ENDS)