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Economic Impact of Climate Change: Study in Nature Journal (2024)
GS-3 Mains
Global Economic Loss:
- 19% permanent average reduction in global incomes by 2050 due to climate change (compared to a world without climate change).
- Largest losses in lower-latitude countries (South Asia & Africa) despite low emissions and income.
Economic Damages:
- $38 trillion annually by 2049 (2005 international dollars) under a moderate emissions scenario.
- Range of economic damages: $19 trillion – $59 trillion.
- 6 times the cost of mitigation measures to limit warming below 2°C by 2050.
Study Methodology:
- Analyzed climate & income data from 1600 regions over 40 years.
- Predicted damages from changes in temperature & precipitation (including daily variability, total precipitation, wet days, extreme rainfall).
- Considered factors impacting: labor & agricultural productivity, human health, flood damages.
Key Findings:
- Average annual temperature increase is the biggest factor (13% income reduction).
- Other factors (temperature variability, precipitation) contribute 6% income reduction.
- Economic damages are already locked-in due to historical emissions.
- Decisions on future emissions will impact damages after 2049.
Income Reduction by Region:
- North America & Europe: 11% (median)
- South Asia & Africa: 22% (median)
- Poorest countries: 8.9% points greater than richest countries.
- Low emitters: 6.9% points greater than high emitters.
Mitigation vs. Damages:
- Mitigation cost by 2050: $6 trillion (based on IPCC models).
- Damages are significantly higher than mitigation costs.
- Net benefits of mitigation will emerge only after mid-century.
Underestimation of Climate Impacts:
- Climate models might underestimate future changes in temperature variability and extreme precipitation.
- True impacts from these variables could be even larger.
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